Wealth inequality has been the downfall of many societies for time immemorial. Lasses-faire economic realities create non-linear accelerated disparities in income growth. The 1% wealth accumulation versus the 99% of American Citizens is an economic fact as of July 2014. Any denier of wealth inequality in the US is, most likely, also a denier of scientific inquiry as a whole. This blog post is making the assumption, therefore, that wealth inequality is unfair and a fiscal problem to be solved.
Unfortunately, The US Political System has been poisoned by the corruption of wealth. It has been painted as a non-issue; rarely brought up by any but the Bernie Sanders or Elizabeth Warren’s of the world. The game is rigged by the power, wealth elite. Those with money have made barriers to entry harder. They have ensured through fiscal tax policy that they can accumulate wealth at rates higher than the average (powerless) citizen. 1 Vote matters not in this game. A Conservative #SCOTUS has ensured that Money is considered Speech in this nation. There are no limits or transparency in today’s political contribution system. Vested interests won the day in the 2000’s and we are seeing the result of what they declared to do. The rich are getting richer and the poor are losing ground due to unfair taxation & wage stagnation. President George W. Bush, with a GOP Congress and Conservative Supreme Court ensured that Capital Gains tax rates were lowered. The outward goal was to bolster equities markets via supply-side economic theory on supply/demand.
There are two forms of policies that may be utilized by Gov’t apparatus; Fiscal & Monetary Policy. An independent Federal Reserve System in the US is robust and functional. We are treating Monetary Policy as Ceterus Paribus. Fiscal Policy is the issue at hand. I cannot speak to the political will to accomplish anything fair and balanced for the masses. The masses simply are not a large enough voting bloc or political donor to receive treatment becoming of US Citizenry. From this powerless standpoint, I make the argument that there is a way to begin to reverse the damage created by the GOP on American Fiscal Policy.
I propose a Progressive Capital Gains Tax Rate.
The purpose of a Progressive Capital Gains rate is to ensure parity between the wealthy elite and the average income tax wage earner. Income tax is a progressive system, ensuring that those who have more income also have more fiscal responsibility to society. The richest members of American Society have enjoyed paying far lower rates. This is due to the way they receive income. They do not collect the majority of their income via taxable means of income tax. They are subject to Capital Gains rates. As such it is only fair and balanced to assume that Capital Gains rates are applied progressively as they are with income tax. Progressive Capital Gains tax rates would better ensure that the Middle Class is able to partake in real wealth creation. Wage Stagnation and Inflationary pressures dwindle purchasing power. Statistical finance through diversification and systematic investing provides an avenue for the Middle Class to create wealth. The rich, on the other hand, do not need accelerated incentives of wealth creation to better their lives.
Supply-Side Reaganomic Trickle-Down Theory has been a dismal lie to the American Public. Not only is it a strain on the Middle Class, It has strained the Federal and State Fiscal Budgetary situation. Lower economic targets for revenues (after cutting tax rates) has been a weapon of the Right Wing to dismantle social safety-nets. Financial infrastructure has been gutted by Republican control in key areas since Carter lost the White House. A progressive capital gains rate would alleviate this problem by ensuring that the wealthy pay their fair share. This is such a simple concept. The 1% should not, and cannot continue, to pay low Capital Gains rates. The Middle Class should have the opportunity to invest with tax rates that are commensurate to their status and [lack of] wealth. The wealth-elite, which are calling the political shots, should in-turn transparently pay their rightful share of budgetary responsibility. I firmly believe that Progressive Capital Gains taxation is a winning grassroots populist issue. It is easy to be for this and is difficult to justify how this is unfair in such a disproportionate society. This issue in its implementation would better vet politicians as for or against the majority populace. As political contributions are unlimited and not transparent, the game-theory level of thinking kicks in over Progressive Capital Gains Taxation. A politician for progressive capital gains is politically positioned to support the Middle Class. Those opposed are ultimately choosing to declare that they serve their minority wealthy-elite masters over the US Citizenry.