It has increasingly been noted that America is becoming a plutocracy. America has become one of the most unequal nations in the history of the world when it comes to wealth distribution. Thomas Piketty in Capital in the Twenty-First Century. Piketty finds that economic inequality has increased dramatically in recent decades, and will get even worse as the rate of return on capital from investments largely owned by the wealthy exceeds the overall growth rate of the economy. Nobel-winning economist Joseph Stiglitz, Chief Economist at the Roosevelt Institute points out that “much of the income of the top arises from rent seeking (wealth appropriation) – and thus impedes growth and efficiency.”
America is more or less an oligarchy by design and there is nothing surreptitious about it. Under current US law, the federal government will deliver an estimated $1.34 trillion in subsidies to investors over the next 10 years in the form of reduced tax rates for capital gains and dividends. Sixty-eight percent of that money will go to the top 1 percent.
Under inheritance law there is what is called “step-up in basis,” which subsidizes inherited wealth. By taking a step-up in basis, heirs selling inherited assets only have to pay taxes on the capital gain that took place since they received the asset – gains that accrued during the previous owner’s lifetime are never subject to income taxes. This tax break will cost about $644 billion over 10 years, with 21 percent of that subsidy going to the top 1 percent. For the wealthiest families, the benefits are staggering: 55 percent of the wealth in estates worth over $100 million is in the form of unrealized capital gains, meaning that these families will never pay income taxes on the majority of their earnings since the heirs will benefit from step-up in basis.
Confidence in the global economy is steadily improving, as shown in the financial markets’ bullish behaviour and confident comments from companies and policymakers over the past few weeks. The average growth of the global economy from 1988 to 2007, the 20 years before the crisis, was 3.6 per cent, according to the International Monetary Fund World Economic Outlook database. The IMF latest forecast for 2014 is exactly the same — 3.6pc.
Some 20 million American workers who would like a full-time job still can’t get one.2 Labor force participation is at its lowest level since 1978, when women were entering the labor force en masse. If the labor force participation rate were at its average level from 1990-2007, the unemployment rate would be around 11.6 percent. The weaknesses in the labor market are reflected in low wages and stagnating incomes. That helps explain why 95 percent of the increase in incomes in the three years after the recovery officially began went to the upper 1 percent. For most Americans, there has been no recovery. Median income in the U.S. is at the level that it was (adjusted for inflation) in 1989,11 and that of full-time male workers is back to the level of 1972. Median incomes (adjusted for inflation) of men over 25 with only a high school education decreased some 17.1 percent from 1999 to 2012.
America is more or less an oligarchy by design and there is nothing surreptitious about it. Under current US law, the federal government will deliver an estimated $1.34 trillion in subsidies to investors over the next 10 years in the form of reduced tax rates for capital gains and dividends. Sixty-eight percent of that money will go to the top 1 percent.
Under inheritance law there is what is called “step-up in basis,” which subsidizes inherited wealth. By taking a step-up in basis, heirs selling inherited assets only have to pay taxes on the capital gain that took place since they received the asset – gains that accrued during the previous owner’s lifetime are never subject to income taxes. This tax break will cost about $644 billion over 10 years, with 21 percent of that subsidy going to the top 1 percent. For the wealthiest families, the benefits are staggering: 55 percent of the wealth in estates worth over $100 million is in the form of unrealized capital gains, meaning that these families will never pay income taxes on the majority of their earnings since the heirs will benefit from step-up in basis.
Confidence in the global economy is steadily improving, as shown in the financial markets’ bullish behaviour and confident comments from companies and policymakers over the past few weeks. The average growth of the global economy from 1988 to 2007, the 20 years before the crisis, was 3.6 per cent, according to the International Monetary Fund World Economic Outlook database. The IMF latest forecast for 2014 is exactly the same — 3.6pc.
Some 20 million American workers who would like a full-time job still can’t get one.2 Labor force participation is at its lowest level since 1978, when women were entering the labor force en masse. If the labor force participation rate were at its average level from 1990-2007, the unemployment rate would be around 11.6 percent. The weaknesses in the labor market are reflected in low wages and stagnating incomes. That helps explain why 95 percent of the increase in incomes in the three years after the recovery officially began went to the upper 1 percent. For most Americans, there has been no recovery. Median income in the U.S. is at the level that it was (adjusted for inflation) in 1989,11 and that of full-time male workers is back to the level of 1972. Median incomes (adjusted for inflation) of men over 25 with only a high school education decreased some 17.1 percent from 1999 to 2012.
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