October 23rd, 2009 :: Permalink
Aloha Hltaxpayer ~
Been an active week and mahalo for your time ... we were unable to complete our discussion on "Loose cannons on the mayoral deck," you ended:
"What does this mean?" [I had written - The 'fair' share is established when we balance the budget.]
And you responded, "People you consider rich should pay all of the money they earn to the Government until the budget is balanced?"
In my earlier post, I had suggested our most rich sacrifice and pick up 30-40% of the shortfall. Why these figures?
From the latest available (2006) IRS data, America's most wealthy, the richest 1%, have seen a INCREASE in their income tax burden to about 40%. This is what frustrates you ... but is your frustration PONO (justice)?
Although the wealthiest 1% are paying more of the total tax burden, the average tax rate of this group has fallen from about 35% in 1986 to about 22%. Warren Buffet, the world's second richest man and top American business leader, told Congress he paid 16.5% last year while his middle class workers paid 25%.
And, here's where PONO has been lost, while the tax burden on the richest 1% has increased to 40%, the richest 1% have INCREASED their total share of ALL wealth - meaning they have become more rich even when faced with increased taxation! This tells us their tax rate is too low.
In 1986 the richest 1% held about 12% of all income in America; by 2006 they had nearly doubled this amount to about 22%. DOUBLED!
As American companies outsourced millions of middle class jobs to foreign countries, worker pay flatlined. Adjusting for inflation, worker pay has increased ONLY 1% since 1970 (worker productivity in this time INCREASED by 60%). Where did this profit go?
Tied to this, average executive compensation for the top 100 CEOs in 1970 was about $1.3 million; by 1999 it was close to $40 million PER YEAR and the average salary of workers was around $35,000.
These are additional reasons why our middle class is collapsing. The middle class provides stability to our nation and democracy. We currently have a "demand" problem - and consumers make up 70% of our economic growth model.
We must put more money in the hands of public and private workers and to do this our richest 1% must sacrifice more for our country. This is PONO.