Income

The “Working Rich” Are Not Like You and Me (or the Oligarchs)

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incomeCharles Hugh Smith – F. Scott Fitzgerald’s story The Rich Boy included this famous line: “Let me tell you about the very rich. They are different from you and me.” According to a recent paper published by the National Bureau of Economic Research (NBER),Capitalists in the Twenty-First Century (abstract only), the “working rich” are different from you and me, and from the Oligarchs above them who pay little in U.S. income taxes due to offshore tax havens and philanthro-capitalist tax avoidance scams.

Before we start complaining about the rich not paying their fair share, let’s note that the top 3% of taxpayers–mostly “working rich”– pay more than 50% of all income taxes. The latest available IRS data is from the 2016 tax year, as reported by Bloomberg: Top 3% of U.S. Taxpayers Paid Majority of Income Tax in 2016. Continue reading →

You’ve Been Robbed

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Paul Rosenberg – You work long, hard days, but you never have enough to be secure. Your husband or wife probably works too, and yet you still never get ahead. Now think about this: Your great-grandparents worked hard, and they did get ahead. You work just as hard, but you don’t make the same progress.

Was great-grandpa really that much better than you? Not likely. So, how was it that he could get ahead on one income, but you can’t?

moneyTake a good look at this graph: The top line shows how many years of living expenses your great-grandfather would have accumulated as a hard-working young man. The bottom line shows what you can save.

After working for five years, great-gramps had seven years of living expenses in the bank.

Doing the same things, you’d have less than two.

You’ve probably avoided this comparison[1] , because it makes you feel bad. If so, that was your big mistake, because it was never your fault.

When great-gramps worked hard, he kept the money. There was no income tax and no sales tax. (The government survived anyway.) There was no Social Security tax either, and the streets weren’t  full of starving old people. Families were able to take care of their own.

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Only The Wealthy Can Afford A Middle Class Lifestyle

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OfTwoMinds  May 6 2014

The “middle class” has atrophied into the 10% of households just below the top 10%.

CharlesHughSmithThe truth is painfully obvious: a middle class lifestyle is unaffordable to all but the top 20%. This reality is destabilizing to the current arrangement, i.e. debt-based consumerism a.k.a. neofeudal state-cartel capitalism, so it is actively suppressed by the officially sanctioned narrative: that middle class status is attainable by almost every household with two earners (a mere $50,000 annual household income makes one middle class) and middle class wealth is increasing.

It’s not that difficult to define a middle class lifestyle: just list what was taken for granted in the postwar era of widespread prosperity circa the 1960s, four decades ago.

In What Does It Take To Be Middle Class? (December 5, 2013), I listed 10 basic “threshold” attributes and two somewhat higher thresholds for membership in the middle class:

1. Meaningful healthcare insurance (i.e. not phantom “insurance” with deductibles that cost thousands of dollars a year that offers no non-catastrophic care at all)
2. Significant equity (25%-50%) in a home
3. Income/expenses that enable the household to save at least 6% of its income
4. Significant retirement funds: 401Ks, IRAs, etc.
5. The ability to service all debt and expenses over the medium-term if one of the primary household wage-earners lose their job
6. Reliable vehicles for each wage-earner
7. The household does not rely on government transfers to maintain its lifestyle
8. Non-paper, non-real estate assets such as family heirlooms, precious metals, tools, etc. that can be transferred to the next generation, i.e. generational wealth
9. Ability to invest in offspring (education, extracurricular clubs/training, etc.)
10. Leisure time devoted to the maintenance of physical/spiritual/mental fitness Continue reading →