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At some point, taxes are necessary. And marginal tax rates are quite low, leading to historic concentration of wealth at the top. Yes, the wealthiest have benefited almost exclusively. Then again, everybody needs multiple homes and aircraft. Hello concern for fellow man!
To cite tax revs as a % of budget--I don't get that argument as puts too much emphasis on the denominator...and doesn't answer at all the question about the great increase in the deficit due to two unfunded wars and the recent tax cuts.
I'm sorry if you don't understand the significance of taxes and expenses as a percentage of GDP. You can't just look at dollars for the precise reason that you mentioned yourself - so much is dependent on the health and size of the economy.
To try to blame the deficit on "wars" is a nice try, but it doesn't hold up to scrutiny. The fact is that Federal Spending has ballooned from 18% of GDP to about 23% of GDP. Yes, military spending is up. It averaged 3.54% of GDP under Clinton, 3.81% of GDP under Bush, and so far 4.68% under Obama. Even if defense spending were the same under Obama as under Clinton, it would barely dent the deficit, since government spending would still be 22%.
You do raise an interesting question, though, Monroe. Why has the reduction of taxes increased the wealth concentration? Is it just because the 1950-60s tax code, with tax rates as high as 90% so severely handicapped the wealthy that they were doomed to fall behind? Perhaps. Yet, if you look at the who is making the money, you find that many that were in the top 25% of earners have dropped out of that group, and many that weren't have moved into it. The decrease in marginal rates hasn't stratified wealth.
My explanation is very different than yours. The problem is that we have applied one solution to high income people - increasing the percentage of wealth that they can retain from earning more to the wealthy, but we haven't applied that at all to those in lower income groups. In fact, we've gone the other way. We've turned welfare into a roach-motel, trapping the poor at the bottom. We provide so much benefit that if they earn additional money, their spendable income actually goes down! So, how are these people supposed to get ahead - if they work more, they have less to spend.
No doubt you doubt that this can be true. Please examine
this graph. It shows the welfare benefits available to a single mother at various different income levels. With no income at all, she has spendable income of $45,000 once you add in negative income tax, cash payments, food stamps, housing subsidies, energy assistance, childcare benefits, and medicaid. At first the effective "tax rate" is low. If she earns $9000, her spendable income rises to $53,000. Yet, after that, the effective "tax rate" is horrible. If she raises her income from $9,000 to $60,000, her spendable income actually drops to $50,000. Above that, she can starts getting to keep some of the money she makes. It may be even worse, once you consider charity. With no income, she may also get other benefits from charity, while it is doubtful she would receive any with $65,000 in income.
Effectively the system traps people with low income. They have no incentive to leave the system. They have no realistic hope of going from <$10,000 income to >$70,000, so why try? There is nothing to be gained from the effort.
I read somewhere that there are something like 200 separate programs to benefit the poor. They each are independent, and they don't work together. The net effect is the bizarre chart above. If allowing them to keep some of the proceeds of their work caused the rich to work harder, why is it hard to believe that allowing the poor to keep some of the proceeds of their work would motivate them to work harder, too, in which case you'd see the bottom 25% accumulating more wealth.