The Problem -vs- Myths

The Problem:

• For 30 years, all gains have gone to the top 1%.  In the 60s & 70s, the top 1% got 9 – 10 % of total income but by 2007, the top 1% saw the share rise to 23.5%.  The 400 richest Americans have more wealth than the entire bottom half of all earners.
• The American middle class no longer has the purchasing power to drive the recovery from a recession.
• Political power is now totally from the top with unlimited campaign expenditures on the part of very few wealthy individuals driving much of today’s state and federal politics.
• Corporations and the wealthy are paying lower taxes, get more “welfare” in the form of government largess and tax breaks, and are controlled by fewer regulations.
• Lower tax rates have resulted in less revenue for government necessities so cuts in government have resulted in more unemployment and lower demand for goods and services on the part of both government and former government workers.
• Politics have gotten nastier, meaner, and far less civil.

Myths:

• The rich are job creators... It is the wealthy CEOs who are most responsible for layoffs and firings.  While CEO compensation has gone from 40 times the average employee to 400 time the average employee, corporate layoffs have resulted in jobs being eliminated or outsourced.  While the CEOs have enjoyed income growth, they have not invested that additional income in job creation but in wealth creation which does not result in additional jobs.
• Only the average worker pays for failure.  Wealthy CEOs are “penalized” by being given golden parachutes or outlandish severance if they are terminated for poor job performance.  Many of these severance packages exceeds the income of over 50 employees earning $50,000 per year.
• The government is too large... The real question should not be the size of government or the number of government employees, but who actually is benefiting from government.  When 50% of government expenditures are directed to a single industry, like defense, there is insufficient government revenue to fill all the rest of the needs.  When the only recipient of bailouts from private sector failures in the finance industry (Wall Street and Banks) the rest of the citizens in need of assistance are left hanging.
• Taxes are too high...Up to 1981, the top marginal tax rate never fell below 70% and for a time was as high as 91% yet no one considered Eisenhower to be a socialist. Today, people like Mitt Romney are paying less than 15% on incomes in excess of $20 million dollars and when the majority of citizens feel a higher rate is not uncalled for, the proponents of a 39.6% top marginal tax rate are considered socialists and accused of fomenting class warfare.
• Eliminating tax deductions will impact the poor...Most charities that receive large contributions have no relationship with the poor.  The poor do not utilize the services of symphony orchestras, visit art museums, or attend the private colleges and universities that receive the large charitable endowments.