Conservatives Want Less Inequality
Conservatives are starting to worry about income inequality. For real.
Well, at least some are:
The conservative IMF (International Monetary Fund) has warned:
Put simply, a severely skewed income distribution harms the pace and sustainability of growth over the longer term. It leads to an economy of exclusion, and a wasteland of discarded potential.
Or this, from a Wall Street Journal article (no liberal rag):
Stagnant incomes have restrained the American consumer for years, creating a vicious circle that has left businesses waiting for stronger spending before they rev up hiring and investment.
Goldman Sachs CEO and Chair, Lloyd Blankfein, worries that income inequality is destabilizing the economy and “responsible for the divisions in the country.”
Bill Gross, founder of the investment firm PIMCO, continues the theme:
Eventually (income inequality) will be destabilizing.
And libertarian, Alan Greenspan, calls income inequality the most dangerous trend in America.
President Obama wants to do something about this problem. In his State of the Union address Tuesday night he proposed:
- A $500 credit for middle-class families where both spouses work
- Increased paid leave for workers
- Expanded child care tax credit
- Free community college for students who maintain a strong GPA
But how to pay for this?
- Eliminate a trust fund loophole
- Raise the tax rate on investment income
- Levy fees on the few financial companies with assets over $50 billion
These policies could help reverse years of redistributing income from the middle-class to the rich via things like:
- A low, 15% tax rate on capital gains investment income (money that “makes itself” while you sit on your butt)
- Legal tax shelters
- “Right to work (for less)” laws trumping laws that support high union wages
- A low minimum wage
The current redistribution of wealth from the middle to the top leaves plenty of middle-class folks paying higher tax rates than the rich. Meanwhile, managers and owners pocket corporate profits, instead of sharing with the workers who helped create them.
And: We’ve got these laws because political campaigns depend on rich contributors. So politicians pass laws that make their funders happy.
Meanwhile, the middle-class is shrinking. And that’s not good for America.
When people don’t have money to spend they cut spending, which cuts sales, which cuts payrolls. Which means even fewer people have money to spend, and so on.
As The Wall Street Journal put it:
As incomes have stagnated over the past half decade… families (are forced) to cut back spending on everything from clothing to restaurants.
That’s why the middle-class are the real job creators.
These days, populism is being spouted on the left and right, alike. In some cases it’s all talk. Look to see what politicians are actually doing, and not just what they’re saying.
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Posted on January 23, 2015, in politics/class inequality and tagged 1%, economy, inequality, money in politics, politics, President Obama, redistribution of wealth, State of the Union address. Bookmark the permalink. 17 Comments.