Friday, November 1, 2019

GLOBAL YOUTH MOVE TOWARDS SOCIALISM AS WALL STREET LOOTS AND PLUNDERS WITH IMPUNITY

Richest 400 Americans paid lower taxes than everyone else in 2018

According to an analysis by noted economists Emmanuel Saez and Gabriel Zucman, previewed this week by New York Times columnist David Leonhardt, the wealthiest American households paid a lower tax rate last year than every other income group for the first time in the country’s history.
Saez and Zucman, both professors at the University of California Berkeley, detail the phenomenon of declining taxes for the richest Americans in their soon-to-be released book, The Triumph of Injustice .
The pair compiled a historical database composed of the tax payments of households in various income percentiles spanning all the way back to 1913, when the federal income tax was first implemented. Their research uncovered that in the 2018 fiscal year the wealthiest 400 Americans paid a lower tax rate—accounting for federal, state, and local taxes—than anyone else.
The overall tax rate paid by the richest .01 percent was only 23 percent last year, while the bottom half of the population paid 24.2 percent. This contrasts starkly with the overall tax rates on the wealthy of 70 percent in 1950 and 47 percent in 1980.
The taxes on the wealthy have been in precipitous decline since the latter half of the 20th century as successive presidential administrations enacted tax cuts for the rich, suggesting that they would result in economic prosperity for all. Taxes that mostly affect the wealthy, such as the estate tax and corporate tax, have been drastically cut and lawyers have been hard at work on the beliefs of their wealthy patrons planning out the best schemes for tax avoidance, seeking to drive tax rates as close to zero as possible. The impetus for the historical tipping point was the Trump Administration’s 2017 tax reform, which was a windfall for the super-rich.
Supported by both the Republican and Democratic Parties, the two parties of Wall Street, Trump’s tax cuts were specifically designed to transfer massive amounts of wealth from the working class to the ruling elite.
The corporate tax rate was permanently slashed from 35 percent to 21 percent, potentially increasing corporate revenues by more than $6 trillion in the next decade. The bill also reduced the individual federal income tax rate for the wealthy and included a number of other provisions to further ease their tax burden.
The story is different for many middle- and working-class Americans. According to multiple analyses of the 2017 tax reform, 83 percent of the tax benefits will go to the top 1 percent by 2027, while 53 percent of the population, or those making less than $75,000 annually, will pay higher taxes. At the same time, the reform will sharply increase budget deficits and the national debt, granting the pretense for the further destruction of domestic social programs.
Furthermore, a majority of Americans are paying higher payroll taxes, which cover Medicare and Social Security. The tax increased from 2 percent just after World War II, to 6 percent in 1960, to 15.3 percent in 1990, where it stands today. It has risen to become the largest tax that 62 percent of American households pay.
The result of the multitude of changes to the US tax system over the last three-quarters of a century is one that has become less progressive over time. The 2017 tax reform effectively set up the foundation for a regressive tax policy where the wealthy pay lower tax rates than the poor.
The implementation of a regressive tax structure has played a major role in engineering the redistribution of wealth from the bottom to the top that has brought social inequality in America to its highest level since the 1920s.
According to Leonhardt’s preliminary Times review of The Triumph of Injustice, Saez and Zucman offer a solution to the current unjust tax system in which the overall tax rate on the top 1 percent of income earners would rise to 60 percent. The pair claim that the tax increase would bring in approximately $750 billion in taxes. Their tax code also includes a wealth tax and a minimum global corporate tax of 25 percent, requiring corporations to pay taxes on profits made in the United States, even if their headquarters are overseas.
In an interview with Leonhardt, Zucman states that history shows that the US has raised tax rates on the wealthy before so therefore it should be possible to do so now.
However, the last half century of counterrevolution waged against the working class makes the parasitic nature of the ruling elite absolutely clear, and underscores the well-known fact that the US is ruled by an oligarchy that controls the political system. Neither the Democrats nor the Republicans, who both represent this oligarchy and bear responsibility for the tax system, will make any effort to implement Saez and Zucman’s modest proposal.

California became a Democratic stronghold not because Californians became socialists, but because millions of socialists moved there.  Immigration turned California blue, 
and immigration is ultimately to blame for California's high poverty level.


Economists: America’s Elite Pay Lower Tax Rate Than All Other Americans

Getty Images
  8 Oct 201918
2:46

The wealthiest Americans are paying a lower tax rate than all other Americans, groundbreaking analysis from a pair of economists reveals.

For the first time on record, the wealthiest 400 Americans in 2018 paid a lower tax rate than all of the income groups in the United States, research highlighted by the New York Times from University of California, Berkeley, economists Emmanuel Saez and Gabriel Zucman finds.
The analysis concludes that the country’s top economic elite are paying lower federal, state, and local tax rates than the nation’s working and middle class. Overall, these top 400 wealthy Americans paid just a 23 percent tax rate, which the Times‘ op-ed columnist David Leonhardt notes is a combined tax payment of “less than one-quarter of their total income.”
This 23 percent tax rate for the rich means their rate has been slashed by 47 percentage points since 1950 when their tax rate was 70 percent.
(Screenshot via the New York Times)
The analysis finds that the 23 percent tax rate for the wealthiest Americans is less than every other income group in the U.S. — including those earning working and middle-class incomes, as a Times graphic shows.
Leonhardt writes:
For middle-class and poor families, the picture is different. Federal income taxes have also declined modestly for these families, but they haven’t benefited much if at all from the decline in the corporate tax or estate taxAnd they now pay more in payroll taxes (which finance Medicare and Social Security) than in the past. Over all, their taxes have remained fairly flat. [Emphasis added]
The report comes as Americans increasingly see a growing divide between the rich and working class, as the Pew Research Center has found.
Sen. Josh Hawley (R-MO), the leading economic nationalist in the Senate, has warned against the Left-Right coalition’s consensus on open trade, open markets, and open borders, a plan that he has called an economy that works solely for the elite.
“The same consensus says that we need to pursue and embrace economic globalization and economic integration at all costs — open markets, open borders, open trade, open everything no matter whether it’s actually good for American national security or for American workers or for American families or for American principles … this is the elite consensus that has governed our politics for too long and what it has produced is a politics of elite ambition,” Hawley said in an August speech in the Senate.
That increasing worry of rapid income inequality is only further justified by economic research showing a rise in servant-class jobs, strong economic recovery for elite zip codes but not for working-class regions, and skyrocketing wage growth for the billionaire class at 15 times the rate of other Americans.
John Binder is a reporter for Breitbart News. Follow him on Twitter at @JxhnBinder.





Census Says U.S. Income Inequality Grew ‘Significantly’ in 2018

(Bloomberg) -- Income inequality in America widened “significantly” last year, according to a U.S. Census Bureau report published Thursday.
A measure of inequality known as the Gini index rose to 0.485 from 0.482 in 2017, according to the bureau’s survey of household finances. The measure compares incomes at the top and bottom of the distribution, and a score of 0 is perfect equality.
The 2018 reading is the first to incorporate
the impact of President Donald Trump’s end-
2017 tax bill, which was reckoned by many
economists to be skewed in favor of the
wealthy.
But the distribution of income and wealth in the U.S. has been worsening for decades, making America the most unequal country in the developed world. The trend, which has persisted through recessions and recoveries, and under administrations of both parties, has put inequality at the center of U.S. politics.
Leading candidates for the 2020 Democratic presidential nomination, including senators Elizabeth Warren and Bernie Sanders, are promising to rectify the tilt toward the rich with measures such as taxes on wealth or financial transactions.
Just five states -- California, Connecticut, Florida, Louisiana and New York, plus the District of Columbia and Puerto Rico -- had Gini indexes higher than the national level, while the reading was lower in 36 states.
The global youth radicalization and the fight for socialism

Across the world, in countries as culturally distinct as Ecuador, Lebanon, France, Germany, the US, Iraq, Chile and Haiti, a new generation of working class youth is making its powerful entrance onto the battlefield of the global class struggle.
Citing the international scope of recent mass demonstrations, the Guardian's Simon Tisdall recently wrote: “Each country’s protests differ in detail, but recent upheavals do appear to share one key factor: youth ... This global phenomenon of unfulfilled youthful aspirations is producing political time bombs. Each month in India, one million people turn 18 and can register to vote. In the Middle East and North Africa, an estimated 27 million youngsters will enter the workforce in the next five years.”
The political awakening of the most educated, urbanized and technologically interconnected generation in history is of critical strategic significance for the entire working class.
College students at Wayne State University in Detroit, Michigan
Born beginning in the 1990s, today's youth share experiences that refute all the claims that the dissolution of the Soviet Union marked the “end of history” and that young people would grow up in a world marked by the triumph of liberal democracy and the absence of class struggle and war.
Young people are demonstrating by the millions because the capitalist status quo has become intolerable. They are demonstrating not over questions of race, gender or personal identity, but over how society’s resources are allocated. They are rejecting sectarian divisions and risking their lives against state repression because they confront the same unresolved historical questions that were posed in the 20th century: imperialist war, fascist reaction, financial crises and massive social inequality. Above all of this hangs the specter of a climate catastrophe.
Young people under 30 now comprise over half the world’s population and over 65 percent of the population in the world’s fastest growing regions—Sub-Saharan Africa, the Middle East and South and South East Asia.
The process of youth radicalization is not relegated to the developing world. Technological transformations epitomized by cell phones and social media are harmonizing the political outlook of working class youth across the globe.
In the US, a poll by the anti-communist Victims of Communism Memorial Foundation this week reported that 70 percent of young people aged 23 to 38 said they would likely support a socialist candidate for office. Polls across Europe show growing support among young people for social revolution. This summer, millions participated across North America and Europe in demonstrations against environmental disaster.
The ruling class views the radicalizing young generation of workers as an existential threat to the capitalist system. The capitalist class employs an army of experts and analysts to defend the system against the fact that “young adults in the 20-29 age cohort are particularly susceptible to radicalization,” in the words of one 2013 think tank strategy document.
Another think tank study from 2018 titled, “Economic Development and Sociopolitical Destabilization,” similarly warns:
“The impetuous growth of the young population requires the creation of enormous numbers of new jobs, which is a serious economic problem, while the youth unemployment growth can have a particularly strong destabilizing effect, creating an ‘army’ of potential participants for various political upheavals, including civil wars, revolutions, and state breakdowns.”
But the financial aristocracy is hoarding the world’s wealth and makes no provisions for sufficient jobs, free education, health care or housing. The same 2018 study continues: “Young people make up the majority of rural-urban migrants, so the ‘youth bulge’ and intensive urbanization factors act together, producing a particularly strong destabilizing effect” on the working class as a whole. “Not only does the most radically inclined part of the population increase in numbers, but it also becomes concentrated in major cities/political centers.”
US imperialism is carefully preparing to suppress the growing radicalization of the working class.
A section of the 2018 US Army Future Studies Group titled, “Governance Challenges in The World of 2030 to 2050: Young, Unemployed, Urban and Angry,” argues that “demographic characteristics, the growth of inequality, the influence of megacities and the possibility of renewed, or at least increased, resources competition” means there is a “real possibility of further state failures” in the near future.
The social power and ingenuity of the world’s youth and students are a great source of strength for the working class in the coming revolutionary struggle for power. The youth are a barometer. After decades of the suppression of the class struggle, the radicalization of the youth is a clear sign that a broad movement of the working class is developing on an international scale.
The critical question is the development of a revolutionary leadership and the imparting of a political and historical perspective to these emerging struggles. Young people must base their revolutionary activity on the crucial revolutionary and counterrevolutionary historical experiences of the working class in the 20th century and the first two decades of the 21st.

Fed guarantees more money for Wall Street as attacks on workers intensify

The US Federal Reserve cut its base interest rate by 0.25 percentage points at its meeting yesterday, the third such cut since July, but gave an indication that this may be the last reduction for the year.
Financial markets, which have been pushing for lower rates—there was a 95 percent expectation of a cut yesterday—took the indications of a hold for the rest of the year in stride. This was because at his press conference, Fed Chairman Jerome Powell virtually ruled out any rate rises for the foreseeable future.
The S&P 500 index closed at its second record high for the week. The index rose 0.3 percent to top its previous record. The index has risen by 22 percent this year, with a major factor being what Powell called a “substantial” shift in Fed monetary policy.
El presidente de la Reserva Federal, Jerome Powell, habla durante una conferencia de prensa en Washington, el miércoles 30 de octubre de 2019. La Reserva Federal redujo las tasas por tercera vez este año. (Foto AP / Susan Walsh)
He told a press conference that the Fed had entered the year expecting to lift interest rates, but then shifted to a “patient” stance before initiating rate cuts in July. Despite the expectation that a further cut in December is unlikely, the markets celebrated the clear indication that the flow of cheap money will continue.
“The Federal Reserve just put a big stake in the ground on the future rate path,” one financial analyst told the Wall Street Journal. “Markets believe that, irrespective of easing trade issues, there is a gigantic pause on future rate increases.”
The Fed’s latest decision underscores the essential class content of economic policy in the US—unlimited amounts of ultra-cheap money for the financial oligarchs on Wall Street to continue their speculative operations, coupled with austerity, wage cuts, speedup and layoffs for workers.
The Fed decision came only days after the sellout of the GM autoworkers’ strike, in which the company, working hand in glove with the United Auto Workers union bureaucracy, secured the expansion of temporary workers, who can be hired and fired at will, and the extension of the so-called “gig economy” into the heart of basic industry.
These are not merely parallel phenomena. They have a causal relationship. The stock market is boosted by the supply of cheap money, but ultimately the returns to the financial elites rest on the extraction of ever increasing amounts of surplus value from the working class. Thus the greater the inflation of financial markets through an influx of money, the more brutal and far-reaching must be the attacks on workers to lift the level of exploitation.
The Fed initially sought to justify its latest round of cuts by maintaining that the rate reductions were an “insurance policy” against the risks to the economy posed by trade tensions, particularly the US-China conflict, and the threat of a no-deal Brexit.
In his press conference, Powell said those risks had eased somewhat in the recent period, before making clear that the policy of providing cheap money would nevertheless continue indefinitely.
Raising interest rates, he said, was “really about inflation,” and there would need to be a “persistent move up” before the Fed would consider raising rates. Inflation expectations were important and the Fed needed to conduct monetary policy to lift those expectations, he continued. He then indicated that the Fed planned to go even further and spoke of the need to think about new policies to make the inflation target of 2 percent more credible.
Given that inflation remains persistently below the 2 percent target and shows no sign of moving up, this amounted to a guarantee to the financial markets of a continuing “accommodative” policy.
There were other remarks that showed that the Fed’s monetary policy had nothing whatsoever to do with providing a boost to the real economy, but was aimed entirely at meeting the demands of Wall Street.
The latest decision came just hours after the release of the latest data on US gross domestic product. The report showed that GDP rose by at annual rate of just 1.9 percent in the third quarter, amid a fall in business investment, compared to a 2 percent increase in the second quarter.
Most significant was a fall in non-residential fixed investment—a measure of what businesses spend on new buildings and equipment. It dropped at an annual rate of 3 percent, its biggest fall in nearly four years. In the words of one business economist, cited in the Financial Times, the “numbers were awful, and a bit worse than we expected.”
The low-growth trajectory of the US economy blows apart the lie of the Trump administration that its massive tax cuts of nearly two years ago, which handed out billions of dollars to corporations and the ultra-wealthy, would provide an economic boost.
The reality is that the personal income tax rate for ordinary workers is now higher than that for the upper echelons. But the tax cuts for corporations and the rich have been used not to finance investment, but rather for parasitical financial operations, including share buybacks and mergers and acquisitions.
During his press conference, Powell abandoned the pretence that the Fed’s monetary policies had any significant impact on investment in the real economy. In response to a question as to whether the Fed was “pushing on a string” in regard to the effect of its measures on the overall economy, Powell replied that interest rates were not the “main driver” for business investment decisions. In other words, they are entirely directed to the financial markets.
There are clear signs of another financial crisis should interest rates rise, or even if there were an indication that they could rise.
These risks were pointed to in a report delivered last month by Fed Governor Lael Brainard to a House of Representatives finance committee. She said business borrowing had risen more rapidly than GDP, and was near its historical peak.
She noted that whereas previously it was mostly high-earning firms with low leverage that took on additional debt, analysis indicated that “firms with high leverage, high interest expense ratios, and low earnings and cash holdings have been increasing their debt loads the most.”
At his Wednesday press conference, Powell responded to a question about a recent IMF report on the build-up of risky corporate debt by acknowledging that corporate leverage was historically high and the Fed was paying “quite a lot of attention” to it. Such phrases inevitably prompt comparisons to the statements issued by the Fed about the sub-prime mortgage market in the run-up to the financial crisis of 2008.
Powell was also asked about the extraordinary Fed interventions into overnight financial markets following the spike in so-called “repo” rates in September. The Fed has announced it will buy $60 billion of short-term Treasury bills each month until at least the second quarter of next year, and has indicated it will lend the repo market at least $120 billion on a daily basis.
Powell could offer no explanation for the repo turbulence, but said investigations had revealed that banks were holding money above their required reserves, but had not put the surplus into the market despite there being a profitable opportunity to do so. The fact that major banks failed to engage in what were regarded as normal operations in the past suggests an attempt to manipulate markets to ensure an additional inflow of cheap money from the Fed.
Powell has insisted that the Fed’s measures are not a return to “quantitative easing” and are purely technical in nature. But the measures are being widely regarded as QE in another guise.
The outcome of the latest Fed decision is clear: a guarantee to Wall Street that the central bank will meet its demands for the supply of cheap money to finance speculation, intensifying attacks on the working class to feed the all-consuming parasitism of the financial oligarchy, and ever greater risks of another financial crisis.

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