Saturday, November 24, 2012

The Modern Gilded Age

Mark Twain coined the phrase for an 1873 novel. Since then it has been used to described a time in American history where individuals with unimaginable wealth coexisted with masses of unimaginable poverty. It was a time when Andrew Carnegie and John D. Rockefeller were billionaires (when a billion dollars was a lot of money) and a small handful of men held the majority of the nation's wealth. Just like today.

Today the Concentration of Wealth Is Huge
Just 400 Americans are worth more than $1.5 trillion and they are making
nearly $200 billion a year. Just one percent of the country own over 1/3 of the nation's wealth while the bottom half of the nation owns a mere one percent of the wealth. America is one of the least equal countries on earth.

Billionaires Are Not 'Job Creators'
Most of the super wealthy are, like Mitt Romney, idle rich. They do not innovate, they do not use their money to create businesses and jobs. Ninty-seven percent stuff their wealth in the rich guy equivalent of the sock drawer - bonds and property.

Hedge Fund Gamblers
There are a few riverboat gamblers among the very wealthy. But they only play if the game is rigged in their favor. Derivatives markets make $1.2 quadrillion(!) in trades per year, a tax of only 0.1% on these transactions would balance the federal budget. Their profits are taxed as capital gains, at a far lower rate than earned income. There is no practical nor moral reason that unearned income (dividends and capital gains) are not taxed at the same rate as earned income (salaries).

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