Almost all of the growth in top American earners has come from just three economic sectors:
- professional services,
- finance and insurance, and
- health care,
groups that tend to benefit from regulatory barriers that shelter them from competition.
The groups that have contributed the most people to the 1 percent since 1980 are:
- physicians;
- executives,
- managers,
- sales supervisors, and
- analysts working in the financial sectors; and
- professional and legal service industry executives,
- managers,
- lawyers,
- consultants and
- sales representatives.
.. The United States also stands out in terms of how much money its elite professionals earn relative to the median worker. Workers at the 90th percentile of the income distribution for professionals make 3.5 times the earnings of the typical (median) worker in all occupations in the United States. Only Mexico and Israel, which have very high inequality, compensate professionals so disproportionately.
.. Problems cited by these analysts include subsidies for the financial sector’s risk-taking; overprotection of software and pharmaceutical patents; the escalation of land-use controls that drive up rents in desirable metropolitan areas; favoritism toward market incumbents via state occupational licensing regulations (for example, associations representing lawyers, doctors and dentists that block efforts allowing paraprofessionals to provide routine services at a lower price without their supervision).
Steve Mnuchin: We’re not cutting taxes for rich people. Bernie Sanders: Yes, you are.
The richest 1 percent — households making at least $732,800 — would get an average tax cut of $129,030, the analysis finds. For the typical one-percenter (who earns much more than $732,800), that means 8.5 percent more income after taxes. The richest 0.1 percent, earning at least $3.4 million a year, would get $722,510 back on average, for a 10.2 percent average boost in after-tax income.
By contrast, the middle class (households earning $48,600 to $86,100 a year) would get $660 back, a 1.2 percent income boost. The poorest fifth of Americans, earning $25,000 or less, would only get $60, a 0.5 percent increase.
.. But the next guest on the “This Week” was Vermont Sen. Bernie Sanders, who delivered a stinging rebuttal:
Everything he [Mnuchin] said is dead wrong … They are repealing the Estate Tax. The Estate tax only applies to the top two tenths of one percent — millionaires and billionaires, like the Walton family of Wal Mart, like the Koch Brothers, like the Trump family. $269 billion in tax breaks for the top two tenths of one percent over the next ten years. And this is not a tax break for the rich? Well, I don’t know what a tax break for the rich is.
The Trump Fog Machine
The Trump Fog Machine erased all his Tweets supporting the other guy in Alabama. No need for that. We do it for him, by following the fresh distractions. Trump is not Teflon. Things do stick to him. But he survives by saying or doing something so outrageous, so regularly, that we forget the last atrocity, and turn on one another.
.. So, this week his cabinet official charged with taking away health care from the poor and cutting the budget for cancer research is using our money to fly private planes at his pleasure. The multimillionaire treasury secretary wanted the same perk for his honeymoon.
.. He’s already tweeted the word “loser” 234 times, “incompetent” 92 times and “pathetic” 72 times. Call them projection tweets, showing the man for what he truly is.
.. He’s already lied about whether his tax plan will benefit the rich and his own family. It will, by eliminating the estate tax, and ensuring that the top 1 percent will get nearly 50 percent of the windfall.
The False Promises in President Trump’s Tax Plan
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The president’s claim also defies history. Wages have long stagnated, despite tax cuts in the 1980s and 2000s, while profits, shareholder returns and executive pay have soared. Profits, whether lifted by favorable economic conditions, by tax cuts or by both, have not translated into employee raises and have instead been used for other purposes.
One is to buy back stock, which lifts share prices and, by extension, executive compensation.
.. Following a huge one-off corporate tax cut in 2004, big piles of corporate cash were also used to pay dividends to shareholders, settle legal issues and finance severance packages for layoffs.
.. Mr. Trump has proposed cutting the top corporate rate from 35 percent to 15 percent, a point he emphasized on Wednesday despite warnings from his economic advisers that a cut that sizable would cause the deficit to explode... he analysis showed that the proposed Trump tax cuts would lift after-tax income for the
- top 1 percent of taxpayers by at least 11.5 percent (or an average annual tax cut of $175,000), compared with a barely perceptible
- 1.3 percent for taxpayers in the middle (or $760 in average tax savings).
.. The question is how House Republicans will deal with those potential deficits. Many of them have built their reputations as fiscal hawks.