I wish the editors of the Wall Street Journal would devote less energy to figuring out whether Trup or Obama has helped more ordinary working people:
Judging from last week’s debate, Democrats running for President see America as a Dickensian nightmare of inequality. It’s the best of times for millionaires and billionaires, and the worst of times for everybody else. Time to wake up from the Barack Obama economy, folks, and admit how many more Americans are prospering from the faster economic growth and tighter labor market after the policy changes of 2017.
Judging from last week’s debate, Democrats running for President see America as a Dickensian nightmare of inequality. It’s the best of times for millionaires and billionaires, and the worst of times for everybody else. Time to wake up from the Barack Obama economy, folks, and admit how many more Americans are prospering from the faster economic growth and tighter labor market after the policy changes of 2017.
[…]
Nearly one million more blacks and two million more Hispanics are employed than when Barack Obama left office, and minorities account for more than half of all new jobs created during the Trump Presidency. Unemployment among black women has hovered near 5% for the last six months, the lowest since 1972, and a mere 3.5% of high school graduates are unemployed.
But what about Senator Harris’s assertion that folks are stringing together jobs to make ends meet? About 5% of Americans hold more than one job, and this rate has held relatively constant since 2010. Yet there are now 1.3 million fewer Americans working part-time for economic reasons than at the end of the Obama Presidency.
and lot more energy to answering two questions:
- Do working people need help?
- If so, what’s the best way to help them?
I think it’s pretty obvious that ordinary working people do need help and what they need most are relief from regressive state and local taxes and less competition for jobs from workers from other countries, whether they remain in those countries or are brought into this one.
But I’m open to other solutions than those I’ve been prescribing. What are your answers to the questions above?
Just ran across this on Quillette proposing that the immigration debate is a class struggle disguised as a moral issue within the destination countries:
“Like elsewhere, in Israel, there is a sociological dimension to the ideological controversy over immigration. It is a struggle between liberal elites, which attempt to impose their will from above, and the rest of the citizenry, which relies on representative party politics. It is a class struggle of sorts, with a clear economic side: weaker citizens pay the price of a policy that economically benefits elites, and these elites, in turn, use high-minded rhetoric to promote it. This, indeed, is a major part of what lies behind the rise of populism in many parts of the West.”
https://quillette.com/2019/07/04/immigration-policy-and-the-rise-of-anti-democratic-liberalism-the-case-of-israel/
Immigrants don’t only take jobs, they change neighborhoods into no-go-zones, hard on those who can’t leave.
You should be aware that is very controversial, bitterly denied by those who support increased immigration.
Well, I can’t be fired, I’m unemployed, so I can say it.
People of different cultures, (skin color is only a marker), have different and strongly held beliefs about how people should behave.
I, for instance, am a Lutheran Protestant. The work and responsibility element of that culture is enforce by shame. You learn at the knee, not a word, but a hard look.
Native Americans reject that and reject capitalism, themselves shaming a family member who accumulates capital instead of sharing whatever they have.
African descendants of slaves lost their original culture, and so attempt the culture of their former masters. But any pursuit too menial rankles their pride and if they can’t have pride they’d rather steal or deal. (Or rap or dunk).
Arabs and Iranians who come here hate us, I can see it in their eyes. They’ll show for work, but slack as much as they can.
Asians, mainly viets, pass thru our neighborhood but become rich so fast they move before you know it, or them.
Who did I leave out? Hispanics? Too broad a term, they don’t even speak the same dialect or necessarily like each other. They’re dark and short and strong and tough as nails and work like beavers. Breed like rabbits. With good nutrition those kids will grow tall and straight and mark the census form “White Hispanic”. Most will never catch the Asians or the Cubans class-wise, but so help me God I’d rather have them than the million Muslims Germany got.
Now, as to the topic of your post, I think it might be worth a try to give working class American kids an education in Home-EC rich kids get at home. Tweak the curriculum, spend less than you earn, stay out of debt, track your expenditures, get a job, show up on time, smile at the customer, defer gratification, be aware of and avoid moral hazard, improve your skills, budget, who even attempts to teach this to working class youth?
1) Sure.
2) Working culture is fractured and it depends on where you live. Still, being motivated to improve, to move and to give up harmful behaviors would help those areas that are not doing well. The narcotic plague has been harmful in many ways.
I am leery about using taxes. Broadly, I think taxes should be used to pay for stuff and not so much to advance policy or social goals. That said, a number of states have set up regressive taxation where those in the bottom 50% of income pay taxes on just about every dollar they earn. The wealthy still pay the most since they earn the most, but they pay taxes on much smaller percentages of their earnings. (In Conservative World only income taxes matter so doubt this really changes.)
Besides the cultural changes we need to find some way to restore the link between worker productivity and wages so that they increase when productivity increases. We need to stop using our tax structure, like we are doing now, to encourage corporations to move good paying jobs out of the country. Let’s crack down on the companies that hire immigrants who come here, legally or illegally, because they can pay them so much less.
Steve
“In Conservative World only income taxes matter so doubt this really changes.â€
This is just a fly by, so I don’t have a link. But if you are motivated you can find the data. Sure, the incidence changes when you consider non-income taxes. But you don’t change the general conclusion about who pays. It’s where the money is. You shouldn’t punish success. Further, the rich will figure out away if they feel a sufficient justice. The only proposal I’ve seen that even makes a bit of sense to me is raising the caps on payroll taxes.
But as someone once said, when half the people plus one figure out they can vote themselves the treasury you are dead. Just look at the student loan debt debacle. Major in crap, on other people’s money……….and then vote to shirk your debt and throw it on others. Everyone except the very few truley unfortunate need to have skin in the game. And even some of them should make in kind contributions.
Injustice.
It’s closer than you might think, Guarneri. Here’s the CBO’s analysis of the present and projected breakdowns of federal tax revenues:
Presently, payroll taxes are about 6% of GDP while incomes taxes are about 8%. Put another way incomes taxes are about 50% of total federal revenues while payroll taxes are about 35% of federal revenues.
From the standpoint of economic efficiency a VAT should replace BOTH the federal income tax and payroll taxes. Some strategy like the Fair Tax in which taxes are prebated at differential rates based on income could make it less regressive. To raise enough revenue the VAT would need to be pretty high—probably something north of 25%.
I doubt that anyone but economists would support it.
“It’s where the money is.”
Correct. So the wealthy have rigged policy so that they make more money than ever, then tell us they are not going to pay taxes on that windfall because we are punishing their success at setting policy so they can become even wealthier. And in your mind this is justice?
Link goes to total taxes paid. The wealthy do pay more, as a percentage, but when you add in those state and local and payroll taxes the discrepancy isn’t as bad as claimed. (These numbers vary from source to source so you may find differences in the numbers, but you still see that when you add in taxes other than federal income things arent as progressive as claimed.)
https://itep.org/wp-content/uploads/taxday2017.pdf
Steve
Viewed overall taxes in the U. S. are mildly progressive as the table to which steve linked documents. Throughout Europe they are mostly regressive. The reason that France, Germany, and the UK have much more expansive social services than the U. S. isn’t just that they pay higher taxes. It’s that they get greater value for the money spent than we do. Europeans trust their governments more than we do because their governments are more trustworthy.
However, steve, there are no practical ways of rendering the effective tax rate more progressive without damaging the economy other than by something like the Fair Tax, basically a complete reorganization of federal funding. The evidence that higher nominal tax rates lead to higher effective rates is nonexistent.
As you might guess, I look at things differently. The smoking gun column in the first graphic shows percent of total taxes paid. I’ll round a bit; you choose your own method. It won’t change things
* 5% of the people pay 50% of the taxes. 50% of the people pay 10% of the taxes. Anecdotally, in a year I many times have paid in one year what a median earner pays in a lifetime. Why do we deamonize those who can? Do you think you can build a productive society by penalizing the $180k and up types while giving the lower half a relatively free ride? (And please, leave out the 1% talk. It’s for demagogues)
* the regressive non-income taxes are most surely dominated by sales taxes. What are you going to do about that? Issue cards? – show me your income card: a can of Coke is a buck for you, but 90 cents for you?
* if you eliminated taxes for the bottom 50% what do you think the next 5% would want. And boy would those bottom 50% have ideas for what you could spend on them. The politicians would line up to give the bottom 50, 55, then 60…….what they want. Look at public sector pensions.
* arguments for tweaking rates – “hey, just a little bit more†ignore propensities to spend and the empirical history of taxes. Remember, the income tax started as a system of just a little on just a few. What a crock.
* plain and simply, our system is primarily financed by the most economically successful, period. The arguments for soaking the rich are based upon envy, greed and political opportunism. They are not analytically based on economic efficiency, and they totally disregard the empirical fact that tax workarounds pop up when the burden becomes too great. We have a spending problem, not a taxing problem, and no proposal I’ve seen will change human nature and the havoc the tax system creates.
Now, about my most excellent soda pop tax. See, here’s how it works……..
“* 5% of the people pay 50% of the taxes”
And earn about 47% of the money. It seem like what you want is to have that 5% earn 50% of the money and pay 25% (or less) of the taxes. I am sure there are people demonizing those who make over $180k, but I think most people who discuss the topic realize that if most of our income is going to be concentrated among a few people, our taxes will also have to come from the same source.
“* if you eliminated taxes for the bottom 50% what do you think the next 5% would want. And boy would those bottom 50% have ideas for what you could spend on them. The politicians would line up to give the bottom 50, 55, then 60…….what they want. Look at public sector pensions.”
This could have happened at any time since 1776, but it hasn’t. What makes you think it will happen now? Instead, what has really happened, and not just fearful conjecture on your part, is that we are maximizing inequality with our wealth and income concentrated in the hands of few people. Somehow our economy is supposed to grow and remain as dynamic as it has in the past when far fewer people now have the means to innovate and start new businesses.
Steve
What I “want†is a limit on how much (a %) of anyone’s income is taken by the state, and for a budget to be just that, not an unlimited spending authority financed by deamonizing people to gain support to increase their taxes.
All you have told me is your tax philosophy is akin to the notion that you rob banks because that’s where the money is. There is no notion of equity, economic efficiency or spending restraint.
In point of fact, in the so called modern era of taxation, depending on bracket, tax rates have increased 6-10x. It’s been an almost inexorable rise. And contra your assertion, the entire crop of current Democrat candidates are appealing to voters to increase rates on high incomes to give others free stuff. It’s happening right now.
Lastly, who is “we?†Income inequality derives from the (ever increasing) return to skills, work and risk taking. The basic Democrat message is dependency on the state. Income inequality derives from destroying the wage structure at the low end through immigration. But if you criticize that policy you get labeled a racist by Democrats. Income inequality derives from this slavish devotion to globalism and a notion of free trade where there is in fact no free trade, destroying well paying manufacturing jobs. Criticize that and Democrats suddenly are lopsided advocates for consumers and cheaper polo shirts and TVs, and the critics are Neanderthals.