President Obama has proposed raising taxes on the wealthiest Americans by targeting the money that is passed down through inheritance. Naturally, Republicans are not happy about the idea and will undoubtedly block the proposal at every turn, despite the fact that President Obama’s plan is touted as beneficial to the middle class, a group that both Democrats and Republicans claim to be champions in every political ad. The GOP will drag their feet and loudly state that by raising taxes on the rich, this will somehow disrupt the magical trickle-down that they’ve promised us would be coming any day now, for the past few decades.
There’s a problem with that talking point though, and the tired old promises that giving more money to the wealthiest people would stimulate the economy are about to be challenged once again. Here’s the thing: the rich are already rich, and now they’re about to get even richer, according to troubling report by Oxfam:
The world’s richest 1% will soon amass wealth that represents more than the entirety of that owned by the rest of the people on our planet, a new report released Monday by the British anti-poverty charity Oxfam claims.
The study, published ahead of this week’s annual meeting of the World Economic Forum in Davos, Switzerland, suggests that by 2016 the gap between the world’s rich and poor will widen to the extent that those at the top of the income pile will control over 50% of total global wealth. That percentage is up from 48% in 2014.
In 2014, the 80 richest people had a collective wealth of $1.9 trillion — a rise of $600 billion, or 50% in four years, according to the report, Wealth: Having It All and Wanting More. (Source)
At what point does this concentration of wealth become unsustainable? At what point will this whole economic house of cards come tumbling down? Certainly if trickle-down economics worked, wouldn’t we all be rich by now, or at least better off than we were before the Great Recession? When will people wake up to the fact that continuing to give more tax breaks and incentives to corporations who have no intent of hiring more workers (or giving their workers raises) is nothing more than undeserved corporate welfare?
Even Mitt Romney who is considering yet another run for the White House in 2016 is aware of the growing dissatisfaction with an economy that is only benefiting the very wealthiest of Americans. The “new Romney” makeover he’s trying out includes being an anti-poverty and anti-inequality candidate, which is already going over like a fart in church with the Republican Party. While this may be political suicide within the GOP, at least Mitt Romney understands that people are frustrated and just barely getting by.
This is an economy with low unemployment but the problem is that the jobs that were lost during the Great Recession never came back. They were replaced with lower wage jobs, some of which are only part-time instead of full-time. The economy recovered, but only for the wealthiest of Americans and maybe, just maybe, Republican voters are starting to see that – if only they could get past the knee-jerk reaction to anything proposed by President Obama. In fact, more Republicans support raising taxes, as long as you mention Ronald Reagan:
When asked whether they support raising the tax rate on personal income above $1 million annually, 36 percent of Republicans supported the plan and 47 percent of Republicans were opposed. The rest were undecided.
But when asked whether they supported raising the personal income tax on those earning $1 million a year to 50 percent, “the same rate taxed under President Reagan,” Republicans shifted their support, with 53 percent supporting and 33 opposing.
Overall, 54 percent of those polled support raising the tax rate on millionaires, 31 percent are opposed and 12 percent were neutral or undecided. Democrats supported the idea by a 72 percent to 16 percent margin, with the remainder undecided or neutral. (Source)
Despite the constant accusations of Marxism and welfare handouts by many conservatives, many liberals don’t have a problem with the wealthy having money. There’s certainly folks like Bill Gates who worked hard or invested wisely and earned billions of dollars – nobody’s disputing that. Yet, the fact remains that when there’s less money for 99% of people to spend, it’s bad for the economy overall. Raising taxes on the rich back to Reagan-era levels shouldn’t be a partisan issue, it’s just good economic sense.
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