The Economy

Let's quit calling the rich "affluent" or merely "wealthy," for one thing. Obama is going to HAVE to reverse tax policies favoring the few at the expense of everybody else. Our country can't survive much longer without a reversal. I would go much further than Obama, who is afraid of alienating his rich donors and Wall Street.

But his proposed budget is a step in the right direction. Robert Reich for one likes what he is seeing with Obama.

It's about time a presidential budget uneqivocally redistributed income from the very rich to the middle class and poor. The incomes of the top 1 percent have soared for thirty years while median wages have slowed or declined in real terms. As economists Thomas Piketty and Emanuel Saez have shown, in the 1970s the top-earning 1 percent of Americans took home 8 percent of total income; as recently as 1980 they took home 9 percent. After that, total income became more and more concentrated at the top. By 2007, the top 1 percent took home over 22 percent. Meanwhile, even as their incomes dramatically increased, the total federal tax rates paid by the top 1 percent dropped. According to the Congressional Budget Office, the top 1 percent paid a total federal tax rate of 37 percent three decades ago; now it's paying 31 percent.

Fairness is at stake but so is the economy as a whole. This Mini Depression is partly the result of a widening gap between what Americans can afford to buy and what Americans when fully employed can produce. And that gap is in no small measure due to the widening gap in incomes, since the rich don't devote nearly as large a portion of their incomes to buying things than middle and lower-income people. The rich, after all, already have most of what they want.

Obama will have to go much further, though, to get this country back where it should be. But at least he recognizes the overconcentration of wealth in this country as THE problem.

Mountain Sage has the links to the proposed 2010 budget, if people are interested in actually reading it.

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This piece agrees with me about Obama needing to reverse the destructive tax policy which has benefitted the tiny numbers of financial elite to the detriment of everybody else.

And Congress better not EVER repeal the estate tax. It is un-American. We do NOT want or need a hereditary aristocracy in this country.