I can't emphasize how important it is to make sure everyone understands this final attempt to reestablish feudalism for what it is.
Quote of note:
In the past nearly three years of economic recovery, the distribution of economic growth has become more skewed than at any other time in modern memory. Currently, 47 percent of growth is flowing to corporate profits, by far the largest share than that in any of the other eight post-World War II recoveries. Fifteen percent goes to wages and salaries, the smallest share of economic growth in more than 50 years. To make matters worse, the share of compensation that is devoted to health and pension benefits is far larger during this recovery than in any other, representing a further squeeze on the wages and salaries of ordinary Americans. In 2004, take-home pay as a share of the economy dropped to its lowest level since 1929, when the government started keeping records. [P6: emphasis added]
All of this would make the drive for a wage tax laughable, if only it were a joke. And yet, when he says "ownership society," a wage tax is exactly what Mr. Bush is driving at.
Taxes for an Ownership Society
When President Bush talks about an "ownership society," hold on to your wallet. The slogan, like "compassionate conservative" before it, is sufficiently vague to mean many things to many people, and the few details that Mr. Bush has provided - encouraging more home ownership and offering new tax-sheltered savings plans - seem innocuous enough. But in tax terms, "ownership society" means only one thing: the further reduction, if not the elimination, of taxes on savings and investments, including taxes on dividends and on capital gains on stocks, bonds and real estate. That, in turn, means, by definition, a shift in the tax burden onto wages and salaries - or, put more simply, a wage tax.
The regressive results would be appalling. The richest 1 percent of Americans earn just about one-tenth of total wages and salaries, but almost half of all income from savings and investments - income that would be largely, perhaps entirely, untaxed in an "ownership society." In contrast, taxable wages and salaries make up almost all of the income of most Americans.
The Bush camp has been floating the idea that what the president is getting at is a consumption tax. But the administration is not talking about a true consumption tax, which would apply to spending regardless of where the money comes from - from your paycheck, cashing in your stocks and bonds, selling your house, or borrowing. It is, in effect, talking about a tax on wages.
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A Man's Home is His Castle
TrackBack from Cobb:
this idea that by lowering ta
this idea that by lowering taxes on investments, it somehow shifts the tax burden to wages is based on the false liberal idea of a static economy.
It just isnt true. It assumes that investments dont make up alarger share of middle class and retired peoples incomes. It does.
More people are invested in stocks today that at any point. But go ahead ignore that, it doesnt fit with the idea that only the rich are getting richer.
Ignore alll the info showing that the traditional definition of middle class has changed, and is now what use to be called rich. Ignore that. You have a class warfare argument to make.
i am blown away by how anybody, can honestly say it makes more sense for the govt to control your retirement than for you to control the assets. Just hard to fathom.
I love the attacks on the ownership society idea. How dare they assume people want to own and control their own assets, and pass them down to their children. How dare they!!
I love how you love to focvus on the top 1%. ignore the top 20%. ignore the large tax burden that they actually pay. Ignore all of that. Ignore the fact that a large majority of people pay no income taxes. that woudl undermine your argument, cant let facts do that!!
sorry. But you cannot convince me that every african american having their social security tax put into a private fund, and allowed to be controlled by them is a bad idea.
Hint. The idea is that by rewarding investments, more people will use them. More people who invest, then more people take advanteg of the tax breaks. Its called, no double taxation. You paid taxes once when you earned the money. if you take a risk and invest, and that investment returns favorably for you, you should be rewarded. Simple idea.
maybe the idea of every American being invested in stocks and bonds sounds liek a bad idea to liberals, who prefer that 535 rich people in washington control your money
I just dont get the mindset, that assumes only negative results from people having a say intheir own life. Wow.
you talk of sharing the wealth, well everybody owning stocks ois sharing the wealth. But you dont like the idea of rewarding that behavior, because right now a lot of rich people may benefit.
ignore that it will open up to a whole lot of middle and lower income people who will also benefit. Just like home ownership. Of course thos ewho own homes benefit most from the tax deductions, but the fact that those deductions motivate more people to own, and therefore spreads the tax relif to a larger section fo people, is ignored.
There is this thing called a long term view. Yeah, really. It means, that economies have ups and downs. If you take small bits and say, "this is bad" that is silly and short sighted.
Your personal biases are the
Your personal biases are the reason you don't understand the economics. But let's see if we can walk you through a bit of it.
Actually, the idea depends on the projection of static or increased spending. The money must come from somewhere and if it's not coming from taxing unearned income it will come from taxing earned income. Those are the only two kinds of income there are.
Then I won't try. Thanks for the warning.