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Richer Animal Farm
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What have those upward re-distributional Animal Farm tax policies done for America's once envied Middle Class?
Well, much more of the shrinking Middle Class has increased their marginal propensity to consume (MPC) to 100%, meaning they are spending all they earn. Â That's good for stimulating the economy, when your economy is creating solid Middle Class incomes. Â Problem is the shrinking Middle Class is working a lot more, getting paid a lot less, falling into debt, seeing fewer opportunities for their initiative to pull them out, and being snookered by big interests and media as to causes and answers. Â
America grew strong as a "Demand Side Economy" that grew a larger and larger Middle Class whose MPC was reasonable. Â With their savings, Americans could grow small businesses. Â America started weakening when they bought into the illogical theory or lies that we were a "Supply Side Economy," which moved our production toward lawyers, lobbyists, foreign shores, and financiers that fabricated gambling words that started rotting more than just our physical infrastructure.
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Supply Rich Side Economics
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Supply Rich Side Economics and lobbied tax codes strengthened the uber-rich, which gave us more yachts, jet setting lifestyles, and palatial domestic and foreign estates. Â The benefiting uber-rich bought and are buying tax-free bonds, debt, and foreclosed properties, while Middle Class opportunities disappear as income and wealth cascades to the top. Â
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- Â Â Â Income gains have been even more pronounced among those at the very top of the income scale. The incomes of the top one-tenth of 1 percent (0.1 percent) of U.S. households have grown more rapidly than the incomes of the top 1 percent of households as a whole, rising by 94 percent -- or $3.5 million per household -- since 2002. The share of the nation's income flowing to the top one-tenth of 1 percent of households increased from 7.3 percent of the total income in the nation in 2002 to 12.3 percent in 2007. This is the highest level in the Piketty-Saez data going back to 1913, surpassing even the previous peak in 1928.
-Â Â The effective federal income tax rate for the 400 taxpayers with the very highest incomes has declined by nearly half over the past two decades, even as their pre - tax incomes have grown five times larger, new IRS data show.
- Â Â Â The top 400 households paid 16.6 percent of their income in federal individual income taxes in 2007, down from 30 percent in 1995. This decline works out to a tax cut of $46 million per filer in 2007, or a total of $18 billion in tax cuts for these households per year.
- Â Â Â To make it into the top 400, a household needed an adjusted gross income of at least $35 million in 1992 (in 2007 dollars) and $139 million in 2007.
Center on Budge and Policy Priorities
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