MB360: U.S. income, 'fiscal cliff,' and the Little Guy

These U.S. income stats are important for us Average Joe's to keep in mind during the so-called "fiscal cliff" negotiations that may have been resolved by Congress early this morning.  

To recap: the Republicans have been ready to impose higher income taxes on all Americans in order to exempt households earning between $250,000 and $449,000 -- that's already the top 1-2 percent of income earners -- from paying a 39.6 percent marginal tax rate instead of the current 35 percent.  (For the record, the One Percent includes anybody making more than $350 K a year). 

Meanwhile, the median U.S. wage per person is about $27 K. Sixty-six percent of individual Americans earn less than $42 K a year; and 68 percent of households earn less than $75 K a year.  If the "middle class" means the middle of the U.S. income distribution, then these are the very people we should care about, not the Two Percent!

Think about that: Republicans have been adamant to scrap any deal on taxes and spending -- to the detriment of the middle and working class! -- that raises income taxes on the top Two Percent of all Americans. They show their true colors. The GOP is not the party of the Little Guy, but rather of the selfish elitists.

UPDATE:  Said President Obama at 11:21 EST today, after the GOP-led House voted to pass a 'fiscal cliff bill:'

"I will sign a law that raises taxes on the wealthiest 2% of Americans while preventing a middle class tax hike that could have sent the economy back into recession and obviously had a severe impact on families all across America."

Except we know he's fudging a bit, since this bill saves mostly the One Percent, those making over $350 K a year, keeping the Bush tax cuts in place for anybody making under $400 K a year.

Let's hope our President sticks to his guns and won't let the insane Republicans in the House use the debt ceiling as negotiating leverage when this kick-the-can bill expires two months from now....

How much do Americans earn? What is the average US income and other income figures. Fiscal cliff talks only useful in context of incomes.

By mybudget360 | December 31, 2012

URL: http://www.mybudget360.com/how-much-do-americans-earn-what-is-the-average-us-income/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+mybudget360%2FQePx+%28My+Budget+360%29

Starbucks' surplus of hypocrisy on deficits

Starbucks CEO Howard Schultz is asking Americans to gather (at Starbucks, of course, over coffee) to petition national politicians to "Fix the Debt" and "find common ground" on the fiscal cliff.  More:

Schultz told CNN earlier this month that he believed the failure to reach a deal has created uncertainty among consumers and businesses and risks hurting the economy. "This single issue has a seismic effect on the rest of the world," he said.

Now, we all know that debt comes from two things: too much public spending and/or too little tax revenue.  And the fact that Starbucks is a notorious tax dodger means that it increases government deficits around the world. What a self-serving hypocrite! 

Boycott Starbucks!

UPDATE (01.01.2013): Thank goodness Paul Krugman was having none of Howard Schultz's inspid insistence on "bipartisanship" to solve the "fiscal cliff" dilemma, pointing out that all the concessions have been one-sided -- from Democrats. 

Any parent with children knows what happens when you give in to their irrational demands and tantrums: the tantrums never stop, and you continually lose ground in an attempt to be "reasonable."  Today's Congressional GOP is like an unruly, spoiled child who doesn't know what's best for itself, much less the country.

Starbucks makes political push on fiscal cliff

By Poppy Harlow and Rich Barbieri

December 26, 2012 | CNN

URL: http://money.cnn.com/2012/12/26/news/companies/starbucks-fiscal-cliff/index.html?hpt=hp_t2

Nader: Avoid 'fiscal cliff' by taxing stock trades

Ralph Nader isn't nearly the first guy to suggest a financial transactions tax.  I can't really see a downside to it.  Like he said, you buy anything else in life and there's sales tax on it. Yet you can buy $100 million in stocks and there's none. Why? Because uber-rich capitalists, not wage earners, write our tax laws.

Ralph Nader on a simple way to avoid the fiscal cliff: Tax stock trades

By Ralph Nader

November 30, 2012 | Washington Post

URL: http://wapo.st/TrLJXt

Dems must fight any 'grand bargain' (aka austerity)

As Bill Black notes, it can only be Obama's "vanity" making him promise a "grand bargain" on spending and tax cuts if he is re-elected.  In fact, we are now in a classic period of debt-deflation, the only answer to which is more public spending.

Sadly, it sounds like Obama has swallowed the Republican Kool-Aid that we're facing a fiscal "crisis," and that something must be done now to dismantle or privatize Social Security, Medicare, SNAP and a host of federal agencies, or else somebody's grandchildren will have to pay higher taxes.  

(In fact, the CBO estimates that the Budget Control Act that the Right so desperately wanted will turn about 4.4 percent projected GDP growth in 2013 into a recession in 1H 2013 with measly 0.5 percent GDP growth for the year. Much like what is happening in Europe: see below).  

In other words, Obama seems to have embraced austerity, even though the U.S., which partially embraced fiscal stimulus, has been growing consistently since July 2009 (albeit slowly), and partly because of the stimulus and not despite it.  By contrast, the EU is sadly realizing that austerity has been self-defeating: in the EU, debt-to-GDP ratios are growing; GDP is shrinking; and unemployment is growing.

If you still don't understand how that could be so, read this:

Why is [the EU's] fiscal consolidation so much more damaging now? Under normal circumstances a tightening in fiscal policy would also lead to a relaxation in monetary policy. However, with interest rates already at exceptionally low levels, this is unlikely or infeasible. Moreover, during a downturn, when unemployment is high and job security low, a greater percentage of households and firms are likely to find themselves liquidity constrained. Finally, with all countries consolidating simultaneously, output in each country is reduced not just by fiscal consolidation domestically, but by that in other countries, because of trade. In the EU, such spillover effects are likely to be large.

[...] The result of coordinated fiscal consolidation is a rise in the debt-GDP ratio of approximately five percentage points.  

P.S. - This makes 2001 posts to my blog, all-time, not counting the shit I deleted. So cue Strauss's Sunrise!:  "Buuum-buuum-buuuuuuuuuuum BUM-BUM! Boom-boom boom-boom boom-boom boom-boom boom-boom boom-boom boom!"