Issue One: The fiscal cliff
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Equity at issue
Regarding class warfare and our fiscal cliff: The real problem is tax avoidance; lost revenue from tax expenditures (deferrals and deductions), corporate tax avoidance and tax havens could pay off the entire deficit.
But the very rich refuse to pay. They have their own safety net in the House of Representatives. Yes, Donald Trump, revolution may be necessary.
Americans believe that the poorest 40 percent own about 10 percent of the wealth. People underestimate the level of inequality in our country, for the poorest 40 percent actually own less than 1 percent of the wealth.
Reagan and Bush tax cuts concentrated the wealth. Conservative estimates say the richest 1 percent have doubled their share of America's income in 30 years. From 1980 to 2006, the richest 1 percent actually tripled their share of after-tax income.
Entitlements like Social Security, a popular and well-run program, is funded by the payroll tax and has not contributed one nickel to the deficit, according to its trustees.
Now is the time for you to call or write your representatives in Washington to let them know you demand tax equity.
Make reform fair
As Congress proceeds to work out a compromise on increased revenue and "entitlement" reform, I think we all need to recognize the unfair implications of raising the Social Security age. While it's true that, in general, people are living longer, the distribution of increased longevity among social classes is far from equal. Basically, wealthier people and people doing "professional" work live longer than poorer people and people who do unskilled, manual work.
A 2007 Social Security Administration review of the average age of death showed that men with higher earnings (defined as being in the top half of earnings between ages 45-55, when top earnings are generally achieved) lived an average of 5.8 years longer than men in the lower half of earnings. It also showed that this differential in longevity based on comparative earnings was increasing: The differential was only 1.2 years for men born in 1912, compared to 5.8 years for men born in 1941.
Social Security is just one more law that favors the rich: The Social Security payroll tax of 12.4 percent is paid equally by all workers, but only up to an income of $106, 800. So workers who make less than $106,000 pay the tax on 100 percent of their income, while people who earn $250,000 are paying the tax on only 42.7 percent of their income. Millionaire earners pay the tax on only about 10 percent of their earnings. Yet these high earners are the ones who will obtain the greatest return on the taxes paid, since they will collect benefits for many more years on average than the lower 50 percent of earners.
First Published November 25, 2012 12:00 am