American Patriots Know That Federal Income Taxes on Middle-Income Americans Near Historic Lows

American Patriots Know That Federal Income Taxes on Middle-Income Americans Near Historic Lows

Federal taxes on middle-income Americans are near historic lows, our updated report explains, and that’s true whether you’re talking about federal income taxes or all federal taxes.

When it comes to income taxes, a family of four in the exact middle of the income spectrum will pay only 5.3 percent of its 2013 income in federal income taxes next year, according to a new analysis by the Urban-Brookings Tax Policy Center.

Average income tax rates for these typical families have been lower during the Bush and Obama Administrations than at any time since the 1950s (see graph).  Taxes were particularly low from 2008 to 2010 because of the Recovery Rebate Credit and the Making Work Pay Tax Credit, which have since expired.

When it comes to overall federal taxes, households in the middle fifth of the income spectrum paid an average of 11.1 percent of their income in taxes in 2009, the latest year for which data are available, according to the Congressional Budget Office (CBO).  This is the lowest on record in data that go back to 1979.
When CBO publishes data for more recent years (such as 2013), overall federal average tax rates on this middle group will likely be higher — though still low historically — because they will reflect the expiration of Making Work Pay and other temporary tax cuts, including the payroll tax cut that expired at the end of last year.

The expiration of the payroll tax cut is the biggest tax change for most people in 2013.  As this table shows, the tax cut helped workers in a wide range of income groups, and its expiration is a key contributor to the slowdown in economic growth that CBO forecasts for 2013.

Yet those wacky conservatives keep claiming that we have to keep large tax cuts for wealthy corporations and billionaires to stimulate economic growth, or have new tax cuts. There is no relationship between low taxes for those skimming huge profits off the backs of American workers. Why are cons lying about taxes. They want to starve thew government safety net - Medicare, Social Security, workmen's comp, unemployment insurance  - pretty much anything that does not fire a missile. The reason we safety net is because history shows us that markets are often good and create wealth, but they are not perfect - as any adult who was around in 2007 will know. The U.S. and it's imperfect markets have a long history. Patriots learn from history, conservatives either rewrite it or pretend it didn't happen.

If Anti-American Conservatives James Pethokoukis and Ann Coulter Used Their Math at NASA All Missions Would Crash and Burn

If Anti-American Conservatives James Pethokoukis and Ann Coulter Used Their Math at NASA All Missions Would Crash and Burn

I was late to the excellent MarketWatch story debunking the notion that President Obama’s been on a spending binge; I spent most of Tuesday traveling. But after my “Hardball” segment on it Wednesday, Ann Coulter tweeted: “Joan Walsh says that Marketwatch chart is ‘unbelievable’! Why yes it is, in the sense of being untrue.” That’s when I saw that there was shrill but lame GOP pushback on Rex Nutting’s excellent story, from both Coulter and the American Enterprise Institute’s James Pethokoukis. I don’t normally reply to Coulter’s right-wing delusions — I haven’t written a column about her in five years – but since I think Nutting’s findings are a crucial corrective to GOP lying, I wasted my Wednesday night trying to understand the GOP attempt to discredit him. You’re welcome.

Coulter admits she relies on Pethokoukis, so let’s go directly to the source. To recap, Nutting crunched Office of Management and Budget and Congressional Budget Office numbers to find that under Obama, spending has risen at an annualized rate of 1.4 percent, less than any president since Dwight Eisenhower. It jumped 8.1 percent in the last three years of the George W. Bush presidency, and in fiscal year 2009, for which Bush approved the budget, it jumped 17.9 percent. But Bush isn’t the most profligate Republican: Ronald Reagan increased spending an average of 8.7 percent in his first term.

Pethokoukis quarrels with Nutting’s assigning Bush’s budget to Bush, because “Obama chose not to reverse that elevated level of spending; thus he, along with congressional Democrats, are responsible for it.” Exactly how one president undoes the spending approved by another president under a different Congress goes unexplained. The AEI pundit also argues that we should look at federal spending as a percent of GDP, and he notes that’s gone up under Obama, attempting to prove that Nutting is mistaken – but that’s a useless metric during a recession, which by definition shrinks GDP.

Coulter goes even further (of course). “It turns out Rex Nutting, author of the phony Marketwatch chart, attributes all spending during Obama’s entire first year, up to Oct. 1, to President Bush.” (The italics are in the original; they’re where the good writing is supposed to be.) She continues: “That means, for example, the $825 billion stimulus bill, proposed, lobbied for, signed and spent by Obama, goes in … Bush’s column.”

Shockingly, Coulter is … wrong. First of all, only about $120 billion of the stimulus was spent in fiscal year 2009 – and Nutting counted it in Obama’s column.

 Why do conservatives lie so often and so blatantly without the slightest regard for values like integrity. because they cannot win arguments if they have to stick to the facts. Bush 43 started his presidency with a federal surplus. he ran up the largest spending spree in US history. Conservative Republicans who ran all three branches of government for 6 of those years made no attempt to pay for their spending. Then they crashed the economy (conservatives and Wall Street  crashed the economy, not Freddie Mac or Fannie May).

Anti-American web site The Weekly Standard, Cherry-Picks BLS Data To Attack Obama's Economic Record

Typical American Worker Would Need 244 Years To Match CEO’s Annual Salary

How The Conservative Supreme Court Decided That Anyone Arrested For Anything Can be Sexually Humiliated

How The Conservative Supreme Court Decided That Anyone Arrested For Anything Can be Sexually Humiliated

In a five-four ruling this week, the supreme court decided that anyone can be strip-searched upon arrest for any offense, however minor, at any time. This horror show ruling joins two recent horror show laws: the NDAA, which lets anyone be arrested forever at any time, and HR 347, the "trespass bill", which gives you a 10-year sentence for protesting anywhere near someone with secret service protection.
...Is American strip-searching benign? The man who had brought the initial suit, Albert Florence, described having been told to "turn around. Squat and cough. Spread your cheeks." He said he felt humiliated: "It made me feel like less of a man."

In surreal reasoning, justice Anthony Kennedy explained that this ruling is necessary because the 9/11 bomber could have been stopped for speeding. How would strip searching him have prevented the attack? Did justice Kennedy imagine that plans to blow up the twin towers had been concealed in a body cavity? In still more bizarre non-logic, his and the other justices' decision rests on concerns about weapons and contraband in prison systems. But people under arrest – that is, who are not yet convicted – haven't been introduced into a prison population.

Our surveillance state shown considerable determination to intrude on citizens sexually. There's the sexual abuse of prisoners at Bagram – der Spiegel reports that "former inmates report incidents of … various forms of sexual humiliation. In some cases, an interrogator would place his penis along the face of the detainee while he was being questioned. Other inmates were raped with sticks or threatened with anal sex". There was the stripping of Bradley Manning is solitary confinement. And there's the policy set up after the story of the "underwear bomber" to grope US travelers genitally or else force them to go through a machine – made by a company, Rapiscan, owned by terror profiteer and former DHA czar Michael Chertoff – with images so vivid that it has been called the "pornoscanner".

Believe me: you don't want the state having the power to strip your clothes off. History shows that the use of forced nudity by a state that is descending into fascism is powerfully effective in controlling and subduing populations.

The political use of forced nudity by anti-democratic regimes is long established. Forcing people to undress is the first step in breaking down their sense of individuality and dignity and reinforcing their powerlessness. Enslaved women were sold naked on the blocks in the American south, and adolescent male slaves served young white ladies at table in the south, while they themselves were naked: their invisible humiliation was a trope for their emasculation. Jewish prisoners herded into concentration camps were stripped of clothing and photographed naked, as iconic images of that Holocaust reiterated.

One of the most terrifying moments for me when I visited Guantanamo prison in 2009 was seeing the way the architecture of the building positioned glass-fronted shower cubicles facing intentionally right into the central atrium – where young female guards stood watch over the forced nakedness of Muslim prisoners, who had no way to conceal themselves. Laws and rulings such as this are clearly designed to bring the conditions of Guantanamo, and abusive detention, home.

I have watched male police and TSA members standing by side by side salaciously observing women as they have been "patted down" in airports. I have experienced the weirdly phrased, sexually perverse intrusiveness of the state during an airport "pat-down", which is always phrased in the words of a steamy paperback ("do you have any sensitive areas? … I will use the back of my hands under your breasts …"). One of my Facebook commentators suggested, I think plausibly, that more women are about to be found liable for arrest for petty reasons (scarily enough, the TSA is advertising for more female officers).

I interviewed the equivalent of TSA workers in Britain and found that the genital groping that is obligatory in the US is illegal in Britain. I believe that the genital groping policy in America, too, is designed to psychologically habituate US citizens to a condition in which they are demeaned and sexually intruded upon by the state – at any moment.

The most terrifying phrase of all in the decision is justice Kennedy's striking use of the term "detainees" for "United States citizens under arrest". Some members of Occupy who were arrested in Los Angeles also reported having been referred to by police as such. Justice Kennedy's new use of what looks like a deliberate activation of that phrase is illuminating.

Ten years of association have given "detainee" the synonymous meaning in America as those to whom no rights apply – especially in prison. It has been long in use in America, habituating us to link it with a condition in which random Muslims far away may be stripped by the American state of any rights. Now the term – with its associations of "those to whom anything may be done" – is being deployed systematically in the direction of … any old American citizen.

Where are we headed? Why? These recent laws criminalizing protest, and giving local police – who, recall, are now infused with DHS money, military hardware and personnel – powers to terrify and traumatise people who have not gone through due process or trial, are being set up to work in concert with a see-all-all-the-time surveillance state. A facility is being set up in Utah by the NSA to monitor everything all the time: James Bamford wrote in Wired magazine that the new facility in Bluffdale, Utah, is being built, where the NSA will look at billions of emails, texts and phone calls. Similar legislation is being pushed forward in the UK.

With that Big Brother eye in place, working alongside these strip-search laws, – between the all-seeing data-mining technology and the terrifying police powers to sexually abuse and humiliate you at will – no one will need a formal coup to have a cowed and compliant citizenry. If you say anything controversial online or on the phone, will you face arrest and sexual humiliation?

Remember, you don't need to have done anything wrong to be arrested in America any longer. You can be arrested for walking your dog without a leash. The man who was forced to spread his buttocks was stopped for a driving infraction.

Conservatives dreamed for years of an America run like a permanent police state. It seems that every year we take another step in that direction. Conservatives are the people who talk a lot about freedom and hide their radical Anti-American agenda behind the flag and patriotism.

If Romney is elected president and more conservatives are voted into Congress the USA can count on the an an accelerated increase in turning America into Guantanamo-lite.

Conservative Trashes Middle-Class and Blue Collar Workers - Paul Ryan (R-WI) Dreams of Making America Into 17th Century France

Conservative Trashes Middle-Class and Blue Collar Workers - Paul Ryan (R-WI) Dreams of Making America Into 17th Century France

Even as House Budget Committee Chairman Paul Ryan’s budget would impose trillions of dollars in spending cuts, 62 percent of which would come from low-income programs,[1] it would enact new tax cuts that would provide huge windfalls to households at the top of the income scale.  New analysis by the Urban-Brookings Tax Policy Center (TPC) finds that people earning more than $1 million a year would receive $265,000 apiece in new tax cuts, on average, on top of the $129,000 they would receive from the Ryan budget’s extension of President Bush’s tax cuts.[2] 

The new tax cuts at the top would dwarf those for middle-and lower-income families.  After-tax incomes would rise by 12.5 percent among millionaires, but just 1.9 percent for middle-income households (see Figure 1 and footnote 6).

Chairman Ryan claims that his budget would fully offset the cost of his proposed tax cuts by closing tax expenditures (tax credits, deductions, and other preferences) for high-income households.  But his budget contains no specific proposals to do so, and meeting this goal would be all but impossible, given that the Ryan budget rules out reducing the tax expenditure most heavily tilted to high-income households:  the preferential rates for capital gains and dividends.[3]

By combining large budget cuts that disproportionately harm lower-income Americans with large tax cuts that disproportionately help those at the top of the income scale, the Ryan budget would significantly worsen inequality and increase poverty and hardship (and reduce opportunity as well, through deep cuts in programs such as Pell Grants to help low-income students afford college).
Plan Would Cut Top Rate to Lowest Level Since Hoover Administration

The Ryan budget includes a number of specific tax cuts, on top of making the Bush tax cuts permanent.  All of its new tax cuts are both expensive and tilted toward high-income households.  It would cut the top individual tax rate to 25 percent, the lowest level since the Hoover Administration more than 80 years ago.  It would cut the corporate rate to 25 percent and eliminate both the Alternative Minimum Tax and the Affordable Care Act’s increase in the Medicare tax for high-income people.

A new TPC analysis finds that people with incomes above $1 million would receive a $265,000 average annual tax cut just from the new Ryan proposals (i.e., not counting what they would also receive from extension of the Bush tax cuts).  Middle-income taxpayers — those with incomes between $50,000 and $75,000 — would receive $1,045, on average.[4]

How did Paul Ryan get elected to Congress? How did someone who hates Americans that work for a living - teachers, carpenters, nurses, store clerks, waitresses, tire changers, taxi drivers, road maintenance crews etc. - get so much power and influence over the lives of people who do actual work. Unlike Ryan's millionaire friends whose wealth comes from the work of others. Ryan, like the rest of the conservative movement is out to protect the unearned wealth of society's leeches at the expense of working Americans.

Pennsylvania Conservatives Prop Up Big Business With Crony Corporate Welfare and Give Average Citizens The Shaft

Pennsylvania Conservatives Prop Up Big Business With Crony Corporate Welfare and Give Average Citizens The Shaft

Pennsylvania, where the Declaration of Independence and U.S. Constitution were signed and where the U.S. coal, oil and nuclear industries began, has adopted what may be the most anti-democratic, anti-environmental law in the country, giving gas companies the right to drill anywhere, overturn local zoning laws, seize private property and muzzle physicians from disclosing specific health impacts from drilling fluids on patients.
The draconian new law, known as Act 13, revises the state’s oil and gas statutes, to allow oil companies to drill for natural gas using the controversial process known as hydraulic fracturing or fracking, where large volumes of water and toxic chemicals are pumped into vertical wells with lateral bores to shatter the rock and release the hydrocarbons. The law strips rights from communities and individuals while imposing new statewide drilling rules.

“It’s absolutely crushing of local self-government,” said Ben Price, project director for the Community Environmental Legal Defense Fund, which has helped a handful of local communities—including the city of Pittsburgh—adopt community rights ordinances that elevate the rights of nature and people to block the drilling. “The state has surrendered over 2,000 municipalities to the industry. It’s a complete capitulation of the rights of the people and their right to self-government. They are handing it over to the industry to let them govern us. It is the corporate state. That is how we look at it.”

“Now I know what it feels like to live in Nigeria,” said recently retired Pittsburgh City Council President Doug Shields. “You’re basically a resource colony for multi-national corporations to take your natural resources, take them back to wherever they are at, add value to them, and then sell them back to you.”

Needless to say, Pennsylvania’s top political leadership—Republican Gov. Tom Corbett and Republican-controlled legislature—see Act 13 as a pro-business, clean-energy bill creating jobs, revenue and improving environmental laws surrounding drilling. That the 174-page bill was essentially rammed through the legislature over objections from local officials, environmentalists and a handful of legislators who said it not only turned “300 years of local zoning upside down,” but exposed the state to liability from wells, was irrelevant.

Every day conservatives have a choice between what is best for America and what puts more money in their pockets. They always pick greed over morality. Every day conservatives deprive future generations of freedom, energy and good health. Conservatives call this evil process freedom and patriotism.. Conservatism is in no way about what is good for the nation, it is about the accumulation of money and power, conservatism is the Anti-American freedom and responsibility movement, the movement of drooling hypocrites.

Conservative Economics is Trickle on The American People Economics

Conservative Economics is Trickle on The American People Economics - “Trickled On” Economics

One thing about an election year, particularly this one, is that it reveals the fallacy that humanity has somehow emerged from “mere animal conditions.”  We may have comfortable homes, climate-control, exo-skeletons (known as automobiles) to allow us to move about rapidly and move objects many times our own weight, etc.  But beavers, ants, and foxes have these things.  One thing that humans have the capacity for, if they strive to use it, is being able to see life from another’s viewpoint – we have the capacity for compassion.  If anything would allow us to rise from a “mere animal condition,” it is this compassion.  But under the capitalist model, currently the dominant paradigm in the world, the priority is put on expropriating land and labor in order for a small group to accumulate wealth they did not produce.  In our deluded national narrative, these people are said to be “job creators.”  In fact, their access to wealth and power has allowed them to create a sort of neo-feudal system that can be aptly called, “Trickled-On Economics.”

In this dominant paradigm headed by Big Capital, compassion is highly discouraged.  There is a tendency among the politicians, managers, and overseers of capitalist institutions to live like there is no tomorrow and pretend like there was no yesterday.  After all, the working class – those who actually produce wealth – can be depended upon for a source of insurance in the event the gaming schemes of Big Capital fail.  This attitude of borrow now (“leverage” if you are rich), worry later, unlike the wealth itself, has trickled down, or should I say “trickled on” the general public.

The so-called “debt crisis” currently providing rationale for cutting social programs was created by capitalists manipulating the housing and financial markets for short-term profit, a scheme that crashed the global economy.  While they were doing that, working class people struggled with a steady decline in income resulting from off-shoring American manufacturing, union sell-outs, and outright union-busting.  To make up for this decline, they were handed credit cards, deregulated during the Reagan years, and usurious lending became the order of the day.  In addition, instead of providing education for its citizens as some social welfare states of western and northern Europe have done, the student loan industry was created, with student loan giant Sallie Mae becoming a for-profit corporation by 1995.  As if this was not enough (it never is), for-profit health care, starring Big Pharma, has become ensconced in Congress, K-Street, and Wall Street.  Also, moving in from the desert is a dust devil known as the for-profit prison system.  Examples of profiteering from others’ misfortune, or indeed manufacturing misfortune for profit, (note: I do not even broach the war profiteering game in this essay), has no limit in the capitalist paradigm.

With the declining share of wealth enjoyed by the working class, it was logically reasoned that higher education was a way out of mind-numbing, dead-end jobs and into a better life.   Both federally-insured and private loans for education skyrocketed.  For some, this better life came to pass, for others it became a trap and in some cases a death-trap.  Student loans do not have bankruptcy protection, and the collection agency can seize your home, your social security, your disability income – pretty much anything they want to seize.  There are numerous horror stories out there, including many suicides.  Indeed, as Alan Collinge has written in his book The Student Loan Scam, defaulted loans are more lucrative than those not in default because assets can be seized.

Credit card debt, which now ranks behind student loans in consumer debt as of the summer of 2010, is the result of falling wages and job loss.  By 2012, there were well over a half billion credit cards in use in the U.S. alone.  That is double the total population of the country.  Bankruptcies were down in 2011; with a mere 1.37 million filings in the U.S. (it was 1.55 in 2010).  Many bankruptcies were brought about by medical bills contracted in a system that preys on the sick.

A compassionate set of policies that would address these issues would not include taking billions of dollars in tax revenue from the working class and handing it over to Wall Street bankers to cover their failed schemes and scams as has been done more than once since 2008.  In this paradigm of the Bean-counter, we can hand $700 billion at a pop over to criminals in suits, but we cannot help struggling college graduates or families stranded without gainful employment.

It is not hard to see that the issue is systemic.  Capitalism has no built-in moral code other than maximizing profits.  Whatever morality exists is brought to the table by individuals, but the system itself does not reward compassion; indeed, ruthlessness and cruelty are central features of the game.  Capital has been engaged in a long-term struggle to deprive people of access to the resources they need to build a good life for themselves.  It creates an environment that allows a small group or even one person to live extremely well on the backs of those whose access to resources they control.  Once people become separated from the resources that they need to live, they must re-acquire them on terms favorable to the capitalist.  In some cases, the result is modern-day slavery.  The separation of people from the resource base is a central theme in the human history of the world and at the heart of our systemic problem today.

This system has led to the abuse of the non-human resources, as well.  Humans and their resources are, ultimately, not separate at all.  Labor is the interaction of humans with the non-human world and the results are often very beautiful, profound, poignant, moving, powerful, and on and on – in a word: art.  Forcing human beings to interact with resources on terms favorable to the Capitalist is hardly emerging from “mere animal conditions.”  It results in environmental degradation of both human and non-human.  Degrading and dangerous sweatshops, mines, oil rigs, etc., have increased because of deregulation and defunding of safety oversight.  Environmental oversight has been rolled back, defunded, or ignored.  These underscore the systemic nature of the dual expropriation of labor and resources for the sake of the wealth accumulation of a very few.

From mountain-top mining to clear-cutting rainforests, the systemic unsustainable use of resources creates an oppositional relationship between humans and their environment.  “Man vs. Nature” is a conflict drilled into our heads from an early age, but it is this term “Versus” that needs to be questioned and studied.  A political economic system in which compassion features predominately would institutionalize such introspection.  We have examples from our past.  Agriculture, for instance, traditionally employed the concept of “husbandry.”  Farms were once places where abundance was possible for all species involved and sustaining this human and non-human natural order was the priority. Under capitalism, agriculture has industrialized and cold, hard numbers dominate decision-making processes.

Under a more humane system, labor would be an extension of the production of nature; indeed, human labor is an expression of nature.  But its usurpation by a few is like the felling of the forests, the leveling of mountains, the making of war, or the building of sweatshops: we trade our humanity – our compassion – for the sake of accumulation by an ambitious and even sociopathic few.  If we are serious about emerging from a “mere animal condition,” we need to “think outside the box,” and box is the capitalist paradigm.


Doug Harvey is a historian and musician teaching, writing, and performing in the Kansas City area.

Doug means well, but he underestimates  -so all, but so much of the American public's appetite for abuse. Changing from the crony vulture capitalism we have now to a humanistic capitalism is immediately demonized as creeping communism. Until more of the public gets tired of being trickled on we are doomed to repeat these economic collapses -large and small forever - like rats on a treadmill.

How to Restore the Middle Class Let everyone earn dividends from our common wealth-- the commons

 

How to Restore the Middle ClassLet everyone earn dividends from our common wealth-- the commons

A cushion of reliable income is a wonderful thing. It can help pay for basic necessities. It can be saved for rainy days or used to pursue happiness on sunny days. It can encourage people to take entrepreneurial risks, care for friends, or volunteer for community service.

Conversely, the absence of reliable income is a terrible thing. It heightens anxiety and fear. It diminishes our ability to cope with crises and transitions. It traps many families on the knife’s edge of poverty, and makes it harder for poor people to rise.

There’s been much discussion of late about how to save America’s declining middle class. The answer politicians of both parties give is always the same: jobs, jobs, jobs. The parties differ on how the jobs will be created — Republicans say the market will do it if we cut taxes and regulation. Democrats say government can help by investing in infra¬structure and education. Either way, it still comes down to jobs with decent wages and benefits.

It’s understandable that politicians say this: it was America’s experience in the past. In the years following World War II, we built a solid middle class on the foundation of high-paying, mostly unionized jobs in the manufacturing sector. But those days are history. Today, automation and computers have eliminated millions of jobs, and private-sector unions have been crushed. On top of that, in a globalized economy where capital can hire the cheapest labor anywhere, it’s no longer credible to believe that America’s middle class can prosper from labor income alone.

So why don’t we pay everyone some non-labor income — you know, the kind of money that flows disproportionally to the rich? I’m not talking about redistribution here, I’m talking about paying dividends to equity owners in good old capitalist fashion. Except that the equity owners in question aren’t owners of private wealth, they’re owners of common wealth. Which is to say, all of us.

One state—Alaska—already does this. The Alaska Permanent Fund uses revenue from state oil leases to invest in stocks, bonds and similar assets, and from those investments pays equal dividends to every resident. Since 1980, these dividends have ranged from $1,000 to $2,000 per year per person, including children (meaning that they’ve reached up to $8,000 per year for households of four). It’s therefore no accident that, compared to other states, Alaska has the third highest median income and the second highest income equality.

Alaska’s model can be extended to any state or nation, whether or not they have oil. Imagine an American Permanent Fund that pays dividends to all Americans, one person, one share. A major source of revenue could be clean air, nature’s gift to us all. Polluters have been freely dumping ever-increasing amounts of gunk into our air, contributing to ill-health, acid rain and climate change. But what if we required polluters to bid for and pay for permits to pollute our air, and decreased the number of permits every year? Pollution would decrease, and as it did, pollution prices would rise. Less pollution would yield more revenue. Over time, trillions of dollars would be available for dividends.

There’s been much discussion of late about how to save America’s declining middle class. So why don’t we pay everyone some non-labor income? I’m talking about paying dividends to equity owners in good old capitalist fashion. Except that the equity owners in question aren’t owners of private wealth, they’re owners of common wealth. Which is to say, all of us.

And that’s not the only common resource an American Permanent Fund could tap. Consider the substantial contribution society makes to publicly traded stock values. When a company like Facebook or Google goes public, its value rises dramatically. The extra value derives from the vastly enlarged market of investors who can trust a public company’s financial statements (filed quarterly with the Securities and Exchange Commission) and buy or sell its shares with the click of a mouse. Experts call this a ‘liquidity premium,’ and it’s generated not by the company but by society.

This socially created wealth now flows mostly to a small number of Americans. But if we wanted to, we could spread it around. We could do that by charging corporations for the extra liquidity that society provides. Let’s say we required public companies to deposit 1 percent of their shares in the American Permanent Fund for ten years, up to a total of 10 percent. This would be a modest price not just for public liquidity but for other privileges (limited liability, perpetual life, constitutional protections) we currently grant to corporations for free. In due time, the American Permanent Fund would have a diversified portfolio worth trillions of dollars. As the stock market rose and fell, so would everyone’s dividends. A rising tide would truly lift all boats.

There are other potential revenue sources for common wealth dividends. For example, we give free airwaves to media companies and nearly perpetual (and nearly global) copyright protection to entertainment and software companies. These free gifts are worth big bucks. If their recipients were required to pay us for them, we’d all be a little richer.

Banks are another large recipient of our collective largesse. I’m not talking about bail-out funds; I’m talking about the hugely valuable right we give banks to create money out of nothing. Banks do this (with our generous permission) by lending roughly seven times the money customers deposit (this is called ‘fractional reserve banking’); they then charge interest on these magically minted dollars. This gift to banks is justified on the grounds that it injects needed cash into the economy, but a comparable boost could be achieved by giving people new government-issued dollars — for example, by wiring money to their bank accounts — and limiting bank lending to money actually on deposit. Fresh money would then trickle up through households rather than down through banks.

Regardless of its revenue sources, the mechanics of an American Permanent Fund would be simple. Every U.S. resident with a valid Social Security number would be eligible to open a Shared Wealth Account at a bank or brokerage firm; dividends would then be wired to their accounts monthly. There’d be no means test — and no shame — attached to these earnings, as there are to welfare. Nor would there be any hint of class warfare — Bill Gates would get his dividends along with everyone else. And since the revenue would come from common wealth, there’d be no need to raise taxes or cut government spending. All we’d have to do is charge for private use of common wealth and feed the resulting revenue into an electronic distribution system.

How large should dividends be? The amounts paid would vary from year to year just as corporate dividends do. But the system should be designed so that dividends supplement rather than replace labor income. One good guide is Warren Buffet’s rule for bequeathing money to children: give them “enough to do anything, but not enough to do nothing.” We could also bear in mind that the higher the dividends, the stronger the middle class and the smaller the gap between the richest 1 percent and everyone else.

The United States isn’t broke, as some Republican say; we’re a very wealthy and productive country. The problem is that our wealth and productivity gains flow disproportionately to the rich in the form of dividends, capital gains, rent and interest. If we want to remain a middle class nation, that needs to change. Jobs alone won’t suffice. We need to complement wages with non-labor income from the wealth we all own. That would truly make us an ownership society.
This work is licensed under a Creative Commons License

Peter Barnes—an entrepreneur who co- founded Working Assets and a solar energy company—is co-founder of On the Commons.

America for the Elite -Wall Street ‘Likely To Set Records’ For Political Spending

Wall Street ‘Likely To Set Records’ For Political Spending

With Wall Street profits and bonuses falling and big banks cutting jobs right and left, it seems that the financial services sector would be scaling back its free-spending ways.

But, according to a Center for Responsive Politics analysis, they likely to set records in 2012 on political spending — the bulk of which is aimed at defeating President Barack Obama and electing Republicans opposed to the Dodd-Frank financial regulations enacted to address the sector’s 2008 meltdown.

It seems Wall Street has had its feelings hurt by the Obama administration’s increasingly vocal support for policies that benefit the other 99 percent, and as a result, the financial industry is giving heavily to Republicans and, in particular, former Massachusetts Gov. Mitt Romney (R). Politico reports:

    Despite a large overall fundraising advantage, Obama has raised just $5.1 million from the finance, insurance and real estate sectors so far this cycle compared with $12.4 million for Mitt Romney’s campaign, according to Sheila Krumholz, executive director of [the Center for Responsive Politics]. [...]

    Securities and investment firms are the top industry donors to the Republican Party so far this cycle, having given $12.4 million. The industry has given $10.3 million to the Democratic Party, second to $12.7 million from lawyers and law firms.

    The gap for Romney, a former private-equity executive and founder of Bain Capital, is even larger when his super PAC — Restore our Future — is included. Restore our Future, which can raise unlimited sums from individuals and organizations, had hauled in $30.1 million by the end of last year.

Wall Street has made no secret of its desire for Republican candidate who will return to the unregulated anything-goes policies of the Bush years. The banks spent millions lobbying against passage and implementation of Dodd-Frank and helped Republicans oppose the nomination of a director of the Consumer Financial Protection Bureau. It’s comes as little surprise then that Romney, who announced his opposition to Dodd-Frank early in his campaign, has emerged as Wall Street’s favorite candidate.

Wars based on lies and hogwash. A busted broken economy, the legacy of conservatism. Let's go back and do all that again and again.