Sequester People like Me, Not Struggling Americans

In my travels, I find myself noticing the relative gap between rich and poor in various societies. The measure of a healthy society is indicated, in part, by the income gap between the top and the bottom quintile (20 percent of society). All my life, I’ve considered a very wide gap to be the mark of less successful, banana republic-type societies. But in the last generation, the USA has become like a banana republic itself in its creation of a tiny economic elite and a vast swath of its population mired in structural poverty.

Sure, I am one of the elites — a hardworking business owner who creates jobs. And I see the way the status quo (which protects the obscene wealth of the top one percent) is demoralizing and demeaning our society. That’s why I’m a member of a group of wealthy people advocating for more progressive taxation so that we can build a society with a healthier balance.

I know the notion of “job creators” like me (I employ over a hundred people directly, and many more indirectly) advocating for higher taxes on the wealthy infuriates many Americans — especially those who have dropped out of what was once a healthy middle class. Part of our Cold War/Red Scare heritage is that we can’t even address class issues as problems. But I think doing so is patriotic.

Before you get really mad, watch this little video that explains the situation in a way any honest person who cares about our country can get their brain around. If you like it, share it. Then let me know what you think. Thanks.

If you can’t see the video below, watch it on YouTube.

 

Comments

24 Replies to “Sequester People like Me, Not Struggling Americans”

  1. I’ve seen this type of video before. I even saw the first half if this actual video recently. I just watched it all, and what shocked me was when it said the bottom 80% of Americans only have 7% of the wealth. I’m middle class; probably upper middle class (my husband and I got to go to Italy last year, and while looking over a canal in Venice, I teared up thinking how many people don’t get to go to Italy until they are retired, and most people never do). And I think I have plenty. I’m not rich. I don’t get to travel as much as I’d like. I can’t really afford a Prius (or rather, I have to choose – Prius or Switzerland?). But I have plenty. I feel guilty about my “wealth” when I see people in other countries who don’t even have access to clean drinking water. I wonder if I should donate more. And yet – that top 10%… If THEY donated more, they could really make a difference. NO ONE needs to earn more than a $1 million/yr. NO ONE needs a 10 bedroom house. I wouldn’t even know what to do with all that money. Wealthy people should be able to keep enough of their money so that there is incentive for working hard. But to solve big problems, we need big cash. In the 40’s, 50’s, and 60’s, the top tax rates were at least 70%. Now it’s 35%. Something’s gotta change. What I REALLY don’t understand is the poor people who are suffering, who vote Republican. The Republican’s want to keep it this way – want to keep this grossly uneaqual distribution of wealth. The Republicans want to take away things that will help the poor pull themselves up into a higher income – things like low-interest college loans, educational programs, job training programs, low-cost or free child care so that parents can find a job or go back to school. It just makes no sense.

  2. I totally agree with the logical and compassionate comments. Thank you for stepping out of the “safe” box. I have traveled in enough countries where the disparity between rich and poor is great, that it makes me fear for the trends in the US. without a strong middle class and a road to achieve it, we too could all end up living in fear with bars on our home windows and people desperate to do what it takes to survive.
    I hope the support you receive is overwhelming.

  3. Rick,

    I have been on two of your tours and have loved them. Thank you for your hard work, not being selfish with your money, and not being afraid to say what you think about life.

  4. I hate to complain because we are very lucky. We fall in the upper middle class. But we have picked profession that should really pay a lot more than they do compared to some professions that make millions and you really are not sure what they do to deserve that kind of income. What I really think is wrong, we are in the 25% bracket and have no kids left at home and have stayed in our home so we pay very little interest. Which should be the responsible thing for middle age middle class people to do. We paid enough taxes in 2012 to pay someone a whole years wage. And if some of that money could stay in our pocket we would employee regular hard workers to do upgrades to our house or buy another car since my husband drive a 2001 with almost 200,000 miles. I don’t really see how the very wealthy stimulate the economy when they send jobs overseas and they don’t shop at target. I don’t think that Neiman Marcus or small exclusive shops really help our economy or buying one rediculously priced car.

  5. Rather than vilify republicans who in some states are ideologically inbred, we have to acknowledge that we cannot continue to increase our debt. We need to see a thorough analysis of who is milking the system. Corporate welfare and military/industrial/financial lobbies and insider trading are anathema yes. But what about mortgage interest rate tax breaks which do nothing for renters? What about those who get on SSI (social security disability) at the drop of a hat? Food stamps have become endemic. In Texas, many don’t even apply for Medicaid because it’s more convenient and less paperwork to visit the ER. Easy to get government student loans encourage colleges to incessantly increase tuitions. We have gone from a 15 page tax code back in the early 20th century to 17,000 pages involving special tax breaks for every segment of our society. We all want what we want and the attitude seems to be that the system is abusing me, therefore I am entitled to abuse the system.

  6. CB, the successful are part of the SOLUTION, partially. They pay taxes, and that helps. But if a company CEO earns millions of dollars a year, then there is less money for that company to pay its average workers.

    Judy – you don’t pay 25%. You pay 25% after a bunch of deductions (even if you don’t itemize, there is the personal and standard deduction). And even if you did pay 25%, that’s not that much. In the 1940s through 1960s, the highest tax brackets were over 70%. You’re right – you have nothing to complain about. It was your choice to pick a profession that doesn’t pay as much as others. Presumably, the profession you picked brings you other fulfillment, and you enjoy it – otherwise you would have picked the high-paying profession. With regards to mortgage interest, I think that deduction should be abolished. As you point out, why should people be rewarded for buying excessively expensive houses? This deduction benefits the very wealthy far more than it benefits the middle class.

  7. While I think Rick’s heart is in the right place, there are a few problems with the logic. Here are a few points to consider:

    The reason for the increase in inequality is that our government is actively working to funnel resources to their favored cronies. Bankers, corporate welfare recipients, and the military industrial complex are benefitting and everyone else is losing. If you employ your own lobbyists, you benefit. If you don’t employ your own lobbyists, you lose.

    People like Rick are wealthy, high-income, successful, and lucky, yes. But they are not part of the problem. In fact, they are largely “tax donkeys” who provide a lot of the funding that flows to the crony bankers, etc.

    The current tax code is actually quite progressive. Don’t focus on marginal tax rates, those are actually misleading. Yes, 40 years ago marginal tax rates were higher. But there were many more deductions, etc. allowed. Today, the bottom 50% of Americans by income level pay zero federal income taxes. That’s right, one out of every two people pays NO income tax. More than 70% of all federal taxes are paid by the top 10% of income earners. That’s extremely progressive already.

    Should we really give the government even yet still MORE tax dollars? The federal government already represents about 40% of the economy. One thing that would help reduce poverty would be for the private sector to have more money to drive economic growth, rather than for the government to continue taxing and spending. The annual federal budget is already TWICE as large as it was under Clinton, and it wasn’t small then! And very little of that budget goes to the poor. The government’s biggest priorities in terms of dollars appear to be banks and bomb manufacturers, not struggling families.

    Finally, it is important to realize that “the sequester” is just a marketing campaign by government to scare people into wanting to spend more money on government. According to Wikipedia, the sequester represents NO cuts in government spending. According to the government itself (Congressional Budget Office): “Sequestration reduces the rate of increase in federal spending. It does not cut a penny of actual (nominal) spending.” When the White House says that vital programs will be cut, that is not due to the sequester, because there are no actual cuts in the sequester. It is due to propaganda, or in some cases, very cynical decisions by the White House to fully fund bankers and wars while cutting vital programs for needy people to try to make the point that any cuts at all in ever-increasing government spending will have devastating effects on real people.

    I absolutely agree that the U.S. is starting to look like a banana republic. But it’s because the ultra-rich now essentially OWN Congress. I applaud Rick for wanting to decrease inequality. But unfortunately, his solution of having people like him pay even more in taxes to a corrupt government would not help–it would actually hurt. Just look at the Federal Budget and you can easily see who benefits from Federal spending and in what percentages. The beneficiaries of Rick’s extra generosity would not be the poor, it would be the banks, corporations, and defense contractors with the best political connections and the best lobbyists.

    The solution is to slash government spending. It should be easy–federal spending has doubled in the last 12 years. Rather than sending even more money to Congress for them to spend on wars and bank bailouts, we should slash government crony spending and force them to prioritize help for the poor instead of help for the rich elite bankers, corporations, and defense contractors who lobby the government so effectively for special favors.

  8. First off Cathy don’t tell me how much I pay in taxes! I did not say I pay 25%, I said I fall in the 25% bracket and that I KNOW forsure. I think it is rediculous that upper and middle class pay as much in taxes to pay a whole wage. That is not the answer to this problem. I don’t know what it is that make people hate the middle class. All we do is work our butts off to supply all you people with your needs! And I did not say that we are not fullfilled, we did pick our careers and have been blessed to never have been umemployed. Be thankfull that you have Firefighter, police, teachers and nurses. Not everyone can pick up the pieces of this messy world we live in.

  9. Being successful doesn’t make you a problem. Perhaps a little less take home pay for the CEO etc…, with which they could still live an amazing lifestyle, and a little better pay for the average worker is in order. Thank-you Rick for your style of patriotism; it is mine too.

  10. I really liked the comments of Mr. Steve’s … I was unfortunately, not surprised by some of the vitriole of very very fortunate people thinking they are supporting people far less blessed than they …. actually most of us are supporting the most wealthy … and have bought that argument hook, line and sinker ….

    Thank you Mr. Steves … it is about time that people pay taxes as they should and not take advantage of all forms of tax breaks … I pay almost 20 % except for the last year (medical expenses mostly dentist … thank GD I can afford that) … that is far more than Mitt pays and probably has ever paid.

    Thank you again for this forum.

  11. I think Frijol completely won this discussion. In contrast to what Cathy Ryan thinks, there are plenty of middle and lower class Republicans (myself included) who think it obscene the amount of money paid to “the rich” (by the way, why do CEO’s get all the criticism? What about the pro sports guys making millions to play a game? What about the actress who gets $20 million to make a movie, even if it bombs at the box office?). The difference is that those Republicans are smart enough to realize what Frijol said, that any extra tax money the government collects will not go to benefit the poor or to reduce the deficit; rather, the government will find new ways to spend it, most likely on the bankers, corporations and defense contractors who keep getting them elected. And “them” refers to Republicans AND Democrats. Both parties’ politicians get fat off the same damned trough.

  12. It’s balance and objectivity that most of us strive for in discussions like these. Unfortunately, most of us also feel threatened when we perceive push back on anything we believe to be true.
    The sequester is cutting federal budgets 5% in some cases but about 9% for defense. This is quite manageable based on my experience with the military and non-military agencies. However there are no cuts to beneficiaries’ Medicare or Social Security and their offshoots like SSI and Medicaid except indirectly by cutting 2% in Medicare payments to hospitals etc. And, as Willy Sutton told, the judge when asked why he robbed banks, “that’s where the money is.” Of course we can slash government even more but we must realize we then squeeze people who suffer because Yellowstone NP opening is delayed, for example. Parenthetically, I too abhor the outrageous benefits of our richest but the middle class is where the real money is and we can expect our taxes to also rise. It’s sheer economics.

  13. I second that FRIJOL won this discussion hands down. Great post, Frijol. Couldn’t have said it better myself.

  14. And, Cathy, who are YOU to decide that 25% is not a lot of taxation for someone like Judy? That’s the problem as I see it with progressive liberals like you. You’d rather have everybody’s income be equalized (your notion of fairness) by a confiscatory government, instead of creating equal OPPORTUNITIES for people. Government can be greedy and biased just as much as your hated corporations and bankers.

  15. The Gov’t has a spending problem. I was taught, “it’s not what you make, it’s what you spend”. If taxes are increased, the gov’t will spend every penny and then some. Do we really need to spend $384,949 to research the sexual habits of Ducks? We need people in Congress with common sense…Rick are you up for the job?

  16. Rick running for elective office would be very effective in WA or OR. He is a prototypical Elizabeth Warren, Michael Bloomberg type candidate. But I don’t know how effective he would be on the national stage because he has an agenda that doesn’t correlate with enough voters. I’m glad he traveled in the U.S. recently so he has some sense about what is going on in the other 48 states.

  17. This country does not have a revenue problem. Has anyone noticed that the bailout money has been paid back almost in full? We have a spending problem….and the one with the pen in his hand can’t seem to stop writing checks. STOP THE MADNESS!!!

  18. Thanks, Rick for shining a light on the problem of wealth distribution. To anyone who would like to learn more, I highly recommend Hedrick Smith’s recent book “Who Stole The American Dream?”. Smith clearly explains how and why the middle class has made no real income gains since the mid-70’s, while upper income earners have done very well. This sort of phenomenon does not happen by accident, but instead, by deliberate changes in tax laws and other governmental policies which have facilitated a large transfer of wealth from the working/middle class to the wealthy class.

  19. We are now retired and are in the bottom of the middle class. My fear is that my children will never have as good a life as we have had. We never made a lot of money, but we budgeted every penny, lived below our means so we could travel every year. Our country has lost the ability to see that you cannot spend more than you take in. This administration takes so much from us and spends it foolishly. I’m sure other administrations have as well, but we are more aware of it now that our country is so indebted to China. We have never had this type of debt before and we’ve acquired it in the past several years. Yet Washington insists on taxing us more and sending it abroad. We can no longer afford to support the entire world.

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