Tag: income gap

House Democrats push for progressive tax reform

For far too long, the tepid Democratic leadership on Capitol Hill has lacked any real comprehensive plan to overhaul the federal tax code to increase taxes on the wealthy and provide real tax relief to middle-class Americans.

As if someone turned a light on, U.S. House Minority Leader Nancy Pelosi of California and U.S. Representative Chris Van Hollen of Maryland unveiled a progressive tax reform plan yesterday. This plan would repeal tax breaks that benefit the wealthy and institute a new fee on stock trades in order to provide tax relief for middle-class Americans:

Senior Democrats, dissatisfied with the party’s tepid prescriptions for combating income inequality, are drafting an “action plan” that calls for a massive transfer of wealth from the super-rich and Wall Street traders to the heart of the middle class.

The centerpiece of the proposal, set to be unveiled Monday by Rep. Chris Van Hollen (D-Md.), is a “paycheck bonus credit” that would shave $2,000 a year off the tax bills of couples earning less than $200,000. Other provisions would nearly triple the tax credit for child care and reward people who save at least $500 a year.

The windfall — about $1.2 trillion over a decade — would come directly from the pockets of Wall Street “high rollers” through a new fee on financial transactions, and from the top 1 percent of earners, who would lose billions of dollars in lucrative tax breaks.

Unfortunately, since Republicans control both houses of Congress, this is going absolutely nowhere for at least the next two years. However, for Democrats to simply advocate such a bold plan is a big step forward towards combating the rampant problem of income inequality in this country and restoring the American middle class.

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Wealth inequality isn’t just an American problem…it’s also a Canadian problem

As many of you already know, wealth inequality is a serious problem here in the United States. In America, the wealthiest 1% of the country’s population own more wealth than the poorest 90% of Americans.

However, wealth inequality is also a serious problem north of the border.

The Broadbent Institute, a Canadian progressive think tank based in Ottawa, Ontario, produced this YouTube video highlighting the serious wealth inequality problem in Canada:

While, according to the Broadbent Institute’s survey, most Canadians realize that there will always be people that are wealthier than others, they believe that the wealthiest 20% of Canadians should have roughly three times as much wealth as the poorest 20% of Canadians do. They also believe that the middle 60% of Canadians should have roughly 60% of the total wealth in the country.

According to the Broadbent Institute’s data, most Canadians also think that wealth distribution is more unequal than what the believe is ideal. They think that the wealthiest 20% has ten times as much wealth as the poorest 20%. They also believe that the wealthiest 20% holds a majority (no exact number provided; judging by the pie chart provided in the video at the 1:19 mark, approximately 55%) of the country’s wealth.

However, wealth distribution is even more unequal than most Canadians think it is. The poorest 20% of Canadians own less than 1% of the country’s total wealth, in fact, the bottom 10% actually has more debt than assets. Additionally, the poorest 50% of Canadians own only 6% of the country’s total wealth. On the other hand, the top 1% of Canadians own 20% of the country’s total wealth, and the wealthiest 20% own nearly 70% of the country’s total wealth. Furthermore, the top 10% of Canadians hold 60% of the country’s total financial assets (which includes financial instruments like stocks and bonds), and the average Canadian CEO makes a staggering 206 times as much money as their average employee.

One of the reasons that income inequality has become a major problem in Canada in recent decades is, as cited by the Broadbent Institute, the declining amount of government spending on social services, such as health care, housing, transportation, and education. Additionally, recent polling by the Broadbent Institute shows that, 80% of Canadians support raising personal income taxes on those in the highest Canadian income tax bracket (all three of Canada’s largest political parties oppose this) and 75% of Canadians support raising the corporate income tax rate in Canada (the New Democratic Party of Canada supports a corporate tax increase at the federal level in Canada).

Just like here in America, wealth inequality is a major problem in Canada. Additionally, just like the major political parties in America, the major political parties in Canada are asleep at the wheel when it comes to the wealth inequality problem.