The "nickel and dime" politics of the GOP

Do Americans want to preserve tax entitlements for privileged Americans or start a rebirth of a dynamic middle class?

Do we want the affluent to pay lower tax rates than middle calls Americans in capital gains and deferred interest?

Can we continue to tolerate CEOs making 400 times what he average worker makes? Do we need to make income tax and Social Security FICA tax  more progressive?

What about Estate Tax? Bush suspended and when restored, the estates of 50,000 millionaires were exempted.

Then there is corporate tax. At one time corporations provided 30 per cent of federal revenues, but it is now 6 per cent because of offshore tax breaks in Ireland and the Netherlands.

Many Americans fail to realize that the tax burden has been ever shifted to the middle calls by the "nickel and dime" politics of the GOP over three decades. Taxes have been shifted away form c-corporations and the affluent.

This has weakened the middle class. As one business owner put it, the tax refund at the end of the year is nice, but it won't help if you don't have customers.

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Patriotic Millionaires want their taxes raised

From the newsy transcript"

Some Democrats have argued for higher taxes on the rich.

But the Republican controlled house voted to extend the Bush Tax Cuts in a compromise last year -- arguing that tax increases on the wealthy would kill jobs. Here’s House Speaker John Boehner earlier this month...

“Over half of the people who would be taxed under those plan are in fact more business people. And as a result, you are going to basically increase taxes on the very people that we’re hoping are going to reinvest in our economy and create jobs.”

But the so-called “Patriotic Millionaires” disagree with Mr. Boehner’s reasoning. Former AOL executive and millionaire Charlie Fink spoke with CBS.

“Journalist : How do you respond to the criticism of those who say that raising taxes on the job-creators, the wealthy, kills job.

Charlie Fink : That’s simply a lie. People who create jobs create jobs because of demand on their products and services, not because of taxes.”


Unfortunately after the 2008 elections, the Democrats could have made the tax structure fairer, but they didn't. They could have raised the capital gains tax and restored the Estate Tax, but they didn't. 


The government spent a lot of money to restart the economy, but the Obama administration didn't increase revenues to pay for the spending. 

Unless the Democrats can retake the house and hold onto the Senate, the tax structure is likely to favor the affluent after the 2012 elections. 

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Does cutting taxes increase government revenues?

The Republicans would like you to drink this tax cut Kool-Aide which is the basis of supply side economics, but cutting taxes it is not a government revenue panacea.


America strarted to unravel when Ronald Reagan and other Republicans started coddling the rich by cutting income tax, capital gains tax, corporate income tax and the estate tax. 


The Media Matters research on this topic is impressive. 


Rightardia encourages you to read the entire article because the GOP tries to push their one trick pony, Tax Cuts, in every election. 


Here are some of the Media Matters quotes. 


Bush CEA Chair Greg Mankiw: Claim That Broad-Based Income Tax Cuts Increase Revenue Is Not "Credible:" Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves--and were never intended to. Harvard professor Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues. [Time, 12/6/07]


Former Bush Economist: "[N]o Dispute Among Economists" That Bush Tax Cuts Reduced Revenue. The Washington Post reported on October 17, 2006: "Federal revenue is lower today than it would have been without the tax cuts. There's really no dispute among economists about that," said Alan D. Viard, a former Bush White House economist now at the nonpartisan American Enterprise Institute. "It's logically possible" that a tax cut could spur sufficient economic growth to pay for itself, Viard said. "But there's no evidence that these tax cuts would come anywhere close to that." [The Washington Post,10/17/06]


Krugman: After Reagan's 1981 Tax Cuts, "Revenues Are Permanently Reduced Relative To What They Would Otherwise Have Been." Nobel Prize-winning economist Paul Krugman wrote on July 15, 2010, that "the revenue track under Reagan looks a lot like the track under Bush: a drop in revenues, then a resumption of growth, but no return to the previous trend." He added, "This is exactly what you would expect to see if supply-side economics were just plain wrong: revenues are permanently reduced relative to what they would otherwise have been." [The New York Times, 7/15/10]


Clinton Economist: Reagan Tax Cuts And Bush Tax Cuts "Contributed To Record US Budget Deficits." Harvard economist and former Clinton economic adviser Jeffrey Frankel wrote in September 2008 that cuts in federal income tax rates "reduces revenue ... this was the outcome of the two big experiments of recent decades: the Reagan tax cuts of 1981-83 and the Bush tax cuts of 2001-03, both of which contributed to record US budget deficits."


The Orange County Register reports: 

"While Republican lawmakers appear unified against tax hikes and many Tea Party activists want existing rates rolled back, statistics consistently show that federal taxes are at a historic low.

For the past two years, a family of four with the median income has paid less in federal income taxes than any time since at least 1955, according to the Tax Policy Center. All federal, state and local taxes combined are a lower percentage of per capita income than any time since the 1960s, according to the Tax Foundation. The highest income tax bracket is its lowest since 1992. At 35 percent, it's well below the 50-percent mark of much of the 1980s and the 70-percent bracket of the 1970s."

There are two ways to reduce the national debt and the deficit. The first way is to reduce government spending.

The big thee are defense that is paid for with income tax revenues and the other two, Medicare and Social security are funded by the FICA payroll tax.

The other solution is to raise taxes and certainly the FICA payroll tax needs to be reformed to pay for Social Security and Medicare. Most of the out of control spending in past presidential administrations has been on the GOP side. The GW Bush administration has a particularly bad record when it comes to an increasing the deficit and decreasing tax revenues with unecessary tax cuts that primarily benefited the affluent.  

After Bush was inaugurated, he said this at one of the inauguration balls: 

“This is an impressive crowd: the Have's and Have-more's. Some people call you the elites. I call you my base.”

He wasn't kidding!

source: 

http://articles.ocregister.com/2011-04-14/news/29426357_1_tax-burden-tax-cuts-tax-policy-center

http://mediamatters.org/research/201106170009

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Latimes.com: Theodore Roosevelt and the estate tax compromise

By Tim Rutten, LA Times December 18, 2010

Of the several objectionable provisions included in the tax compromise that congressional Republicans extorted from the Obama administration, none is more noxious than the one that all but guts the estate tax.

. . .Estate tax cuts, by contrast, create a whole new windfall for those who already enjoy privileges and security undreamed of by the vast majority of Americans.

The provision is the work of Arizona's John Kyl, the Senate's second-ranking Republican and a longtime advocate of abolishing the estate tax. To most eyes, the former estate levy didn't look like much of a burden; it allowed couples to leave their heirs$7 million tax free and taxed any additional inheritance at 45%.

Kyl's plan, . . .increases the exemption to $10 million for couples and reduces the tax rate on the rest to just 35%. The average windfall for the approximately 6,600 wealthy taxpayers annually affected by the estate duty will top $1.5 million.

Abolishing the estate tax has been a goal of some conservative Republicans since the 1940s. . .

(I)ts modern champion was a president the GOP used to regard as among the greatest the party has produced — Theodore Roosevelt. Like many thoughtful Americans of his era, he believed the disproportionate accumulation of wealth in the hands of a few would make a mockery of our meritocracy and, ultimately, of our democracy.

In 1910, he summed up those feelings:

We grudge no man a fortune in civil life if it is honorably obtained and well used," Roosevelt said. "It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community.... 

. . . Therefore, I believe in a graduated income tax on big fortunes, and … a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.

 . . . Roosevelt's appraisal of the first Gilded Age is sadly resonant. "The man of great wealth owes a particular obligation to the state," he said, "because he derives special advantages from the mere existence of government."

Today Karl rove would call Roosevelt an advocate of class warfare. The US has become a plutocracy due to the tax policies of Ronald Reagan and the two Bush presidents.

When Bill Clinton was president, He did little to reverse the trend and the plight of the middle calls became worse. Instead of restoring the income tax tax tables to match the tax rates of the Carter administration, Clinton only went half way.

Obama will continue most of the errant Bush tax policies during his presidency. Rightardia agrees with the LA Times that "none is more noxious" than the Obama compromise on the Estate tax. that was instituted in 1915.

source: http://www.latimes.com/news/opinion/commentary/la-oe-1218-rutten-20101218,0,3912591.column

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Neway.com: Estate Tax Provision Strains Support for Tax Deal

Multisource political news, world news, and entertainment news analysis by Newsy.com

December 13, 2010 (2:39)

Ahead of a cloture vote in the Senate, Democrats are railing against an estate tax provision negotiated between the president and Republicans.

Rightardia thinks President Obama was a wimp to raise the threshold for the Estate tax to $5 million. This new threshold will only affect the top .1 per cent of American families.

For many years the threshold for the Estate tax was $250,000, but the GOP raised the threshold to $1 million in 2002. Then President Bush suspended the tax altogether.

The Estate Tax was instituted in 1915. it prevents the US from becoming a plutocracy, an oligarchy of the wealthy.

The restoration of this tax had little discussion in the House and Senate and Rightardia has no idea why Obama would make concessions on a clear legislative matter.

How does Obama think the US is going to pay down the deficit if he keep giving tax gifts to the most affluent Americans, the same people who prospered under GOP supply side economics?

Does Obama understand how offensive his tax compromises are to progressives? 

Sources: MSNBC American Public MediaFox News  CBS

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Stephan Colbert: Return of the Estate Tax

The Colbert Report	Mon - Thurs 11:30pm / 10:30c
Return of the Estate Tax
www.colbertnation.com
Colbert Report Full Episodes 2010 Election March to Keep Fear Alive

The estate tax punishes the innocent, God-fearing people willing to kill Nana for the extra cash. Before the estate tax returns, Stephen will hand-deliver a recordable Christmas card and embroidered pillow to his rich great-uncle. (03:47)

The estate Tax was instituted in 1915 and was in effect until President Bush suspended it. The tax primarily affects the top 5,000 American families, who have $ one million estates or larger. It is one way to prevent the strengthening of the wealthy oligarchy we already have in the US.

We wonder if Rep. Steve King is just uniformed about this tax or just a right ring shill? Is anyone surprised Michele Bachmann and he are friends?

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Gallup: Public prirotites for the last session of the 211th Congress

Rightardia found the Estate Tax as the number one issue curious. First, there has been little discussion of this tax. Second, the tax primarily effects the top 5,000 American families.

Until GWB suspended the Death Tax, it had been continuously in effect since 1915. Because of the federal exemptions, this tax dos not affect the average middle class American family.

graphic coutesy of Wikipedia

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China Daily: China considers an inheritiance tax

By Yang Zhiyong Updated: 2010-09-14 08:02

Chen Guangbiao is among the few philanthropists in China to pledge his entire fortune to charity after his death. But most of the rich Chinese have till now kept away from the charity campaign of Bill Gates and Warren Buffett, which will culminate at the end of this month.

The indifferent attitude of rich Chinese toward charity has intensified the debate on whether the government should impose inheritance tax to facilitate a more equitable distribution of income.

Inheritance tax is necessary to promote social equality in the long run, but the existing taxation system has not played the role it should have in narrowing the wealth gap in society.

China is in the middle of a socio-economic transition, and there are many reasons for the serious inequality in income distribution at the primary level. Although taxation can help adjust income distribution to some extent, it would be childish to assume that it alone could facilitate social justice. What people seem to despise is not the wealth amassed by the rich but the illegal means through which some nouveaux riche have accumulated it.

Since rational income redistribution is essential for maintaining social stability in China, the government has to have a clear objective and method of income distribution reform. It should not take it for granted that people with higher income would provide the funds to offset the low income of the poor.

In market economy, any subsidy that higher-income people offer to the poor should be treated as reparation for market inefficiencies. The government should use the tax collected from the rich to help the lower-income group meet its needs and improve their life. The government can probably choose different objectives of social justice for imposing tax on the rich at different stages of social development.

But would such an arrangement still motivate people to make that extra effort to earn more on their own and improve their livelihood? If society simply finances the poor with the money obtained from the rich, people could be discouraged from making money on their own, and eventually the entire economy will lose the growth momentum.

In such a case, society will be found lacking in resources for redistribution. That is to say, an improper redistribution policy can deteriorate income distribution further.

No compromise on the Bush tax cuts

A growing cadre of Democrats  are fearful of wounding conservative Democrats in a tough election year. These "Blue Dog" Democrats are advocating a plan that would permanently extend tax cuts benefiting the middle class while renewing breaks for the wealthy through 2011.  This is according to senior Democratic aides said.

Rightardia is inclined to believe that the Democrats are afraid of scaring off some affluent donors and corporations who contribute to Blue Dog Democrats.

We agree with Mario Piperni.com. this is not a compromise, this is a sell out of Democratic middle class principles. The tax cuts should have been rescinded two years ago. The wealthy have been coddled enough. 

The Democrats know that the Bush tax cuts were responsible for nearly half of the deficit they inherited. These tax cuts will continue to increase to an unsupportable level if they are not quashed.


A growing number of studies from highly respected institutions and economists have concluded that the negative effect on long-term growth of the increased deficits that the tax cuts are generating.

The tax cuts likely to cancel out — and quite possibly to outweigh — any positive effects on long-term growth from reductions in marginal tax rates and other tax incentives in the 2001 and 2003 tax-cut packages.

Stated simply, the tax cuts are more likely to reduce long-term growth than to increase it.

source: http://www.cbpp.org/cms/index.cfm?fa=view&id=966

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China Daily: Legislature proposes narrowing the gap in wealth

(Xinhua) Updated: 2010-08-24 22:36

BEIJING - China's top legislature, the National People's Congress (NPC), has proposed a reform in income distribution be launched as soon as possible, aiming to increase residents' income and narrow the gap in wealth.

Officials of the Financial and Economic Affairs Committee of the NPC said they have completed a research report on distribution of national income and made the proposals to be included in the 12th Five-Year Plan (2011-2015).

The legislature did not release further details on the proposed reforms in income distribution.

The NPC, for the first time in history, completed 15 research reports on 14 major subjects from March to July to provide proposals for the formulation of the critical development plans for the next five years, after top legislator Wu Bangguo called for the research at the annual legislative session.

According to a World Bank report, the Gini Coefficient for China, a main gauge of income disparity surged to 0.47 in 2009, exceeding the "security line" of 0.4, pointing to the unequal distribution of income which could arouse social unrest.

This figure was 0.21 to 0.27 three decades ago. In the primary distribution of national income, the proportion that goes to wages and salaries, the major source for China's mid- and low-income families, has been declining, according to Yi Xianrong, a researcher at the Chinese Academy of Social Sciences.

The proportion of the total income that Chinese citizens receive from the distribution of national income fell sharply to 57.9 percent in 2007, compared with 68 percent 20 years ago, according to the People's Bank of China.

The Gini coefficient is a measure of statistical dispersion developed by the Italian statistician Corrado Gini and published in his 1912 paper "Variability and Mutability" (Italian: Variabilità e mutabilità).

The Gini coefficient is a measure of the inequality of a distribution, a value of 0 expressing total equality and a value of 1 maximal inequality. It has found application in the study of inequalities in disciplines as diverse as economics, health science, ecology, chemistry and engineering.

It is commonly used as a measure of inequality of income or wealth. Worldwide, Gini coefficients for income range from approximately 0.23 (Sweden) to 0.70 (Namibia) although not every country has been assessed.

US income Gini indices over time

Gini indices for the United States at various times, according to the US Census Bureau:

• 1929: 45.0 (estimated)
• 1947: 37.6 (estimated)
• 1967: 39.7 (first year reported)
• 1968: 38.6 (lowest index reported)
• 1970: 39.4
• 1980: 40.3
• 1990: 42.8
• 2000: 46.2
• 2005: 46.9
• 2006: 47.0 (highest index reported)
• 2007: 46.3
• 2008: 46.69

The simplest way to control the distribution of income in a country is with a progressive income tax in which the higher income levels pay a higher tax rate. In the US the Republican party with the cooperation of Blue Dog Democrats has worked tirelessly to flatten the progressive income tax. The US Gini index is now higher than it was before the Great Depression. 

In the US, an Estate Tax that Republicans referred as a "Death Tax.' although the Estate Tax only effects the top 5000 American families with estates worth more than $1 million, GWB suspended this tax. The suspension will expire in December 2010.


In the short term the GOP tax policies benefit the 'have mores." In the long run, these same tax policies create social instability such as that which occurred during the Great Depression.

source: http://en.wikipedia.org/wiki/Gini_coefficient

http://mapscroll.blogspot.com/2009/04/is-us-becoming-third-world-country.html

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This Time, We Can't Leave the Middle Class Behind

TUE, AUGUST 11, 9:16 AM EST

Rightardia comment: This situation didn't happen by magic. The Republicans have been on a deregulation kick for the past 30 years that enriched the affluent at the expense of the public infrastructure. Many CEOs in large corporations now make in one day what the average employee makes in a year. The health care battle that is going on is an attempt to reverse this trend.

If you look at the top one per cent chart, you can see the inequality in income started in the 1980s when Ronald Reagan became president. Reagan used the Trojan horse, supply side economics, to rewrite the income tax code so it favored the rich. In the US the GINI coefficient is now above 0.40 that is the threshold that indicates income inequality. Reagan's tax cuts actually fractured the middle class. One third became affluent and the other two third either treded water or declined.

Income tax and the estate tax are the two progressive taxes in the US.  These are the taxes the GOP always tries to cut. You never hear Republicans saying much about sales tax, municipal tax, tariffs, or excise tax because they are regressive. The so called fair taxes or flat taxes that the GOP also talks about are simply synonyms for regressive taxes.

Bush followed in the footsteps of Reagan and also fiddled with the tax codes cutting both the income tax tables for top earning Americans and also cutting the capital gains tax. Bush even suspended the other progressive tax: the Estate tax. Bush also bragged during one of his inauguration balls that his base was the 'have mores.'

There are three words that explain the decline of the middle class in the US. They are "the Republican Party.'

Posted by Jared Bernstein

Even before we got to the White House, the President, the Vice President, and the economic team were crafting policies designed to offset the deepest recession since the Great Depression. Back in mid-December of last year, I remember a meeting in Chicago, with the snow swirling outside, as we began to plan the Recovery Act, the financial stabilization plan, and housing relief, all in the context of a budget that would bring down the trillion-plus dollar deficit we were about to inherit as quickly as possible.

I also remember the Vice President talking about the difficulties facing the middle class, struggles that predated the recession. With the campaign fresh in their minds, he and the President recalled that even in supposedly good times, when the economy was expanding and unemployment was low, the families they met on the trail were having far too much trouble making ends meet.

Saving for college, paying for health care, keeping up with the mortgage payments … just making their basic budgets balance out at the end of the month seemed awfully hard in an economy that was supposedly solid.

Of course, that solid economy was fading fast; the recession was a year old, unemployment was rising, and helping people get back to work had become our top priority. But the longer-term, structural challenges that have been facing the middle class since long before the recession began were never far from the President’s mind, which is why, shortly thereafter, he asked the VP to chair the Middle Class Task Force.

Today, in August of 2009, we’re faced with yet another set of realities. After falling at a rate of about 6% from the last quarter of 2008 through the first quarter of this year, a rate of decline we hadn’t seen in half a century, the economy contracted at a 1% rate in the second quarter of 2009.

Yes, our economy is still ailing, but six months ago, economists worried the recession would descend into depression; now they’re asking when recession will become recovery.

Here in the White House, however, recovery means something very specific, and it’s different than what economists generally mean when they talk about it. According to the panel that decides when recessions officially begin and end, you don’t need job growth or falling unemployment to declare that a recovery is underway. In fact, in the last two recoveries, it took 15 and 19 months, respectively, before the unemployment rate peaked.

That definition doesn’t work for us. No jobs, no recovery.

But—and this is the real subject of this post—job growth isn’t enough either. Remember, unemployment fell to below 5% at the end of the last expansion, but middle-income families ended up worse off, in real dollar terms, than they were before that expansion began. The productivity of our economy increased by 19% from 2000 to 2007, but the real median income of working-age households fell $2,000. The share of Americans living in poverty was actually higher in 2007 than it was in 2000.

How could this happen? In fact, the arithmetic is disarmingly simple. If the economy’s growing, but middle-class and low-income families are falling behind, then the growth must be accruing to the top of the scale. And that’s exactly what happened.

Some of the best data on income inequality are collected by two economists: Emmanuel Saez and Thomas Piketty. Their data go back almost to the beginning of the last century, allowing us to make some pretty amazing observations, like the one shown in the figure below.

Income concentration, measured as the share of income going to the top 1% of households, was higher in 2007 (23.5%) than in any year on record going back to 1913, with one ominous exception: 1928, the height of the speculative, bubbly "roaring 20s" and the year before the stock market crashed and the Great Depression began.

For middle-class families to be part of the next recovery, this trend must reverse.

Yes, we want to see a GDP recovery take hold as soon as possible, and once we start seeing robust, consistent job growth we’ll know we’re solidly on track. But even then, we won’t be done: not until the prosperity we’re generating reaches everyone who’s contributing to it, not until all the bakers get their fair slice of the pie—not just the owners of the bakery or the investors in the bakery, but the men and women who are actually doing the work.

Here’s what the President said about this way back in February 2007, when he announced his candidacy:

"… let's be the generation that ensures our nation's workers are sharing in our prosperity. Let's protect the hard-earned benefits their companies have promised. Let's make it possible for hardworking Americans to save for retirement. And let's allow our unions and their organizers to lift up this country's middle class again.

"Let's be the generation that ends poverty in America. Every single person willing to work should be able to get job training that leads to a job, and earn a living wage that can pay the bills, and afford child care so their kids have a safe place to go when they work. Let's do this."
Though he may not have realized at the time, the President-to-be was really describing the work of the Middle Class Task Force. Vice President Biden, the Task Force staff, and our members at all the cabinet agencies will do everything we can to make sure that the next recovery stacks up very differently than the bars in the graph above. The middle class won’t get left behind again.


Jared Bernstein is Chief Economist to Vice President Biden, and Executive Director of the Middle Class Task Force

http://www.whitehouse.gov/blog/

        http://en.wikipedia.org/wiki/Gini_coefficient

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Rightardia Editorial on taxes: the Right is conning you

The New York Post is suggesting the Democratic health care prescription will be a poison pill in New York.

A terrifying 57 percent tax looms for biz, top earners,” by Charles Hurt, et. al: “The top [income tax] rate in New York City … would be 58.68 percent, the Washington-based Tax Foundation said in a report yesterday.

During and immediately World War 2, the tax table for top earners was 90 per cent. The government financed the war and the handled the Great Depression with the income tax. Since then the top taxes have been chiseled away for the wealthiest Americans. In fact tax tables dropped for top income earners to about 33 per cent during the Bush administration.

But wait, there's more! Bush cut capital gains take to 15 per cent that was round 28 per cent when Clinton was president. Most billionaires and millionaires make their money with capital gains, not through their salary.

The rich were big beneficiaries of the deficit politics of the GOP during the Reagan and George W. Bush administrations. In fact, the Reagan tax cuts fractured the Middle Class. About one third became affluent and the other two-third either tred water or declined. Many of the problems we have today started with the tax table experiments of Reagan Republicans.

If we want a society that allows people to make unlimited incomes such as the big corporate CEOs who make 300 times the income of the average corporate worker, these same people should be prepared to pay some big taxes.

The GOP would like you to believe that most taxes in the US are progressive. A progressive tax with a rate that increases proportionately with taxable income. A Republican. Theodore Roosevelt, brought the progressive tax system to the US.

A flat tax is in fact the prefered GOP tax approach because such taxes are regressive. Most US taxes are regressive: sales tax, real estate tax, licenses, tariffs, Social Security and Medicare payroll taxes are all regressive. Two well known taxes that are progressive are Income Tax and the Estate Tax. of course, Bush suspended the Estate Tax while he was in office and cut the income tax rates for top American earners. It is clear that any tax in the US that is progressive is a right wing target. The tax cuts had a negative effect (see figure 1).

The US Congress is smart to raise taxes on the most affluent Americans to pay for health care. Affluent Americans were the biggest beneficiaries of GOP Supply Side economics. The wheel needs to turn and middle class needs to be built back up. Bridges, roads and levees need to be repaired. Obama needs to do exactly what FDR did by spreading the wealth around.

We know from the Bush years that supply side economics is a conservative pipe dream that doesn't create jobs or improve the economy. All 'tickle down did was created a large deficit and national debt and retard job creation (see figure 2).

source: http://www.politico.com/playbook/

http://www.cbpp.org/cms/index.cfm?fa=view&id=1811

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The Good Ol' Days or the best of times

The best of times

Yes, I remember them well being a Baby Boomer.  After World War 2 there was a tremendous building boom in the US because returning vets used their VA benefits to buy homes. My parents brought their first home in a Huber Community in southern Ohio that sprawled for four or five square miles.

Many also used their veteran's benefits to go to college. College enrollment also boomed.

During this era the Income Tax rate on the most affluent Americans was 90 per cent. FDR used income Tax and the Estate tax to pay for the war and help returning vets restart their lives. At this time only one in 30 Americans was considered wealthy.

Neighborhood schools were embraced by parents and it was considered patriotic to support tax changes to increase schools millages.  I can never  recall a tax amendment that benefited the school system that was defeated.

At that time the power company, the water utility and trash pickup were public and were very low cost.

If you worked for a fair to meddling corporation, you could look forward to a company pension and medical care when you retired. It was the best of times.

The worst of times 

Americans have been sometimes called sheeple because they really are unaware of how much things have really changed.

At this time there is a building collapse that  was caused by decades of Republican deregulation and the Bush Ownership Society. The repeal of the Glass-Steagal Act (1933) and an SEC rule change in 2004 that allowed banks to reduce reserves were the two main culprits.

Colleges are under assault by conservatives for being liberal and many neighborhood schools are being closed due tax shortfalls. Teachers are also being laid off. In Florida there is a supreme irony: Republicans wanted bonuses for the best teachers. These teachers, who make more than the average teachers, are the ones who are being laid off.

Many of these tax problems cause by over zealous Republicans who made tax cuts that would not fully fund government activities. The deficit doubled under the Bush presidency. Bush used the Republican Trojan horse, Supply Side economics. to cut taxes for the most affluent Americans and he was also the only president stated a a war without raising taxes.

After eight years the US deficit was doubled. Bush also suspended the Estate Tax. The income tax rate for top earning Americans in 2009 is now 35 per cent. That is a 55 per cent drop since the Eisenhower era. But wait there's more: Bush dropped the capital gains tax to 15 per cent. Millionaires and billionaires make most of their money with capital gains so the most fortunate Americans actually have a lower tax rate than the average American.

The income tax rate for top earning Americans in 2009 is now 35 per cent. That is a 55 per cent drop since the Eisenhower era. But wait there's more: Bush dropped the capital gains tax to 15 per cent. Millionaires and billionaires make most of their money with capital gains so the most fortunate Americans actually have a lower tax rate than the average American.

Most of the utilities have been privatized and some of these power companies request rate hikes whenever oil prices rise. Oddly, the don't request rates drops when the price of crude drops.

Very few Americans get private pensions anymore because corporations cast them out before they hit retirement age. The Supreme Court has stated that corporations do not have to provide private medical care once a retiree is eligible for Medicare.

The Individual Retirement Account (IRA) is also an interesting phenomena. Congress established the IRAs as a savings program not as a retirement program. Many corporations now only offer the IRA as their 'pension program.' Many corporate IRAs have hidden fees that the IRA fund manger doesn't have to disclose.  Many Americans who became unemployed recently discovered their IRAs had been looted by Mini-Madoffs.

If a corporation doesn't offer matching funds or other financial incentives, their IRA program is valueless.You may be better off settitng up an IRA with a bank.

There you have it. Since the New Deal, many American have lost their homes, the neighborhood school has been weakened or closed, college costs have accelerated,  your utilities now take a bigger bite from you paycheck because of privatization, and most Americans will never see a corporate pension or corporate medical benefits.  Still confused about public health?

This is the legacy of the Republican party and some conservative Democrats who should have known better.

It is the worst of times!

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