On July 10, 2012, Dylan Matthews writes on Ezra Klein’s Wonkblog on The Washington Postasks what has actually changed in the tax code since Obama took office?
Obama’s latest proposal breaks off the Bush tax cuts expiry portion of his deficit reduction proposal. According to the TPC’s calculations, the latest proposal, as one would expect, doesn’t have any impact for those making under $250,000, but then again, letting all the cuts expire doesn’t have much of an effect either. The people this all really matters for are the richest of the rich:
Obama’s first term has been heavy on tax cuts, especially those — like the stimulus tax breaks, insurance tax credits, and payroll tax cut — targeted at lower and middle-income people. Of the almost $2 trillion in tax cuts passed during his tenure, only the $570 billion that went toward extending the Bush tax cuts and the AMT patch primarily benefited upper and upper-middle income families.
He looks to continue those lower-income breaks going forward, but with a new emphasis on both phasing out upper-income cuts (like the Bush cuts for those making over $250,000 a year) and imposing new taxes on high-income people, through measures like the itemized deduction cap, the closure of the carried interest loophole, and the Buffett rule. What’s more, the new taxes in the Affordable Care Act set to take effect in 2014, such as the excise tax on expensive plans and the Medicare payroll tax surcharge, primarily target high-income people, while the law’s tax cuts primarily target low-income people. So even if Congress takes no new action, the phase out of the Bush cuts and the implementation of the ACA look to set back rich taxpayers considerably.
While tax and investment stimulus incentives are excellent tools to strengthen economic growth, without the requirement that productive capital ownership is broadened simultaneously, the result will continue to further concentrate productive capital ownership among those who already own, and further create dependency on redistribution policies and programs to sustain purchasing power on the part of the 99 percent of the population who are dependent on their labor worker earnings or welfare to sustain their livelihood. By stimulating economic growth tied to broadened productive capital ownership the benefits are two-fold: one is that over time the 99 percenters will be enabled to acquire productive capital assets that are paid for out of the future earnings of the investments and gain greater access to job opportunities that a growth economy generates.
We will not solve our severe predicament by taxing our way out of the concentrated ownership of wealth that our system has perpetrated and redistributing those earnings through government expenditures. This is not to say that EVERY citizen should not pay their fair share of the tax burden.
If we continue with the past’s unworkable trickle-down economic policies, the government will have to continue to use the coercive power of taxation to redistribute income that is made by people who earn it and give it to those who need it. This results in ever deepening massive debt on local, state, and national government levels, which leads to the citizenry becoming parasites instead of enabling people to become productive in the way that products and services are actually produced.
There are actionable policies that will dramatically impact the market economy and strengthen the middle class in a positive and sustainable way, while expanding the base of private capital ownership and thus strengthening the way consumers make the money to purchase the products and services made possible by the new capital formation. The result will be to expand production and bring more wealth to the economy, which will provide not only growth in expanded ownership of productive capital but also in expanded employment opportunities as the economy revs up to meet expanded consumer demand. Furthermore, the more broadly real capital is acquired by individuals throughout our society with the earnings of capital, the more we will profitably employ unused capacity and promote economic growth. With greater earnings from capital worker investment, people will be able to support and pay for products resulting from “greener” technologies that today people cannot afford. Such policies are perfectly in tune with the natural incentive of business corporations to broaden ownership so that the market for their products will increase. Such policies will liberate the economy.
If we do not succeed at putting our nation on a path to prosperity, opportunity, and economic justice through significant broadened private, individual ownership of future productive capital economic growth, then prepare for our nation being thrown back into recession, if not depression.
The BIG ISSUE is not being presented or discussed!!
Both Obama and Romney should realize that the continual focus on full employment means, “full toil and waste for all forever.” They need to address the question of how are all individuals to be adequately productive when a tiny minority (productive capital owners) produce a major share and the vast majority (labor workers), a minor share of total products and services, and thus, how do we get from a world in which the most productive factor—physical capital—is owned by a handful of people, to a world where the same factor is owned by a majority—and ultimately 100 percent—of the consumers, while respecting all the constitutional rights of present capital owners?
The problem is that we simply do not have anyone presenting or discussing the central issue that I have been raising about how the system furthers concentrated ownership of productive capital economic growth, while leaving the vast majority of people essentially enslaved in labor tasks exponentially being destroyed or degraded by technological innovation and invention––the result of tectonic shifts in the technologies of production and the steady off-loading of American manufacturing and jobs. Where is the media and academia who have remained silent on this pressing issue? Where are those leaders that can be supported for serving the public interest, and where is the money to mount presidential, senatorial,and congressional campaigns that won’t behold them to special interests? This is problematic!
Sadly, after a half-century, we have no leaders with a growth strategy that could restore the economic productiveness of the American economy. The growth strategy I have presented is not new, but it has not yet registered in the minds of leaderless politicians and their advisors from the left to the right of the political spectrum and a population of people who have been mis-educated and mis-led by conventional economists from all the conventional schools of economics.
