Excellent reading for those who are interested......
The fiscal cliff is not a one-time political event; it is a generational process that ends in the collapse of the Status Quo.
To understand the fiscal cliff's inevitable endgame, we need to start with the financial and political basics of wealth and power in the U.S.
1. Wealth and thus political power are highly concentrated. The dynamics of rising wealth disparity and the increasing concentration of wealth are debatable; the disparity is not. Roughly 70% of all financial wealth is held by the top 5%; within this top layer of ownership, the top ½ of 1% hold an outsized share.
2. This preponderance of wealth in the hands of a few translates into an equivalent preponderance of political power, as there are no real limits on the purchase of political influence, favors and power.
3. The U.S. income tax is highly progressive; most Federal taxes are paid by a minority of the citizenry. The top 1% of taxpayers reported almost 17% of all taxable income and paid 37% of all income taxes. The top 5% reported 32% of all income and paid 59% of the taxes, and the top 10% earned 43% of the income and paid 70% of the taxes.
The top 25% (those earning more than $66,193) paid 87% of the taxes. The bottom 50% of taxpayers, roughly 70 million people, earned 13% of the income and paid 2% of the income taxes collected.
4. There are roughly 127 million people who receive government transfers or benefits. Sixty-one million recipients of Social Security and Medicare and 66 million people receiving welfare (SNAP food stamps, housing credits, Medicaid, etc.) Since there are about 115 million full-time jobs in the U.S., this means there are 1.1 government dependents for every full-time worker in the U.S. (For context, there are 315 million Americans and roughly 142 million jobs. About 38 million of these jobs are part-time that pay less than $10,000 annually. Fifty million wage earners earn less than $15,000 a year, and 61 million earn less than $20,000 annually.)
The Federal government counts a person who is self-employed and earns $100 a year as "employed" and a person who works one hour a week as "employed." As a result, the only meaningful metric is full-time employment
The top 25% who pay most of the taxes, roughly 30 million people, are a political minority compared to the 127 million people drawing direct payments/benefits from the Federal government and the 65+ million who pay essentially no income taxes (though they do pay the 7.65% Social Security/Medicare payroll tax).
5. This progressive tax structure is based largely on earned income; i.e., wages and self-employed income. Unearned income (rents, dividends, stock options, hedge fund management fees, etc.) is treated much differently than earned income. Unearned (rentier) income is governed by highly complex tax codes that lend themselves to politically controlled loopholes, subsidies, and exclusions. As a result, some profitable corporations not only pay no tax but actually receive subsidy payments from the government. In other cases, politically powerful enterprises have tax laws written specifically to limit or erase their tax burden.
The tax code treats unearned income quite differently from earned income in many other ways. For example, all unearned income is excluded from the Social Security/Medicare payroll taxes. A self-employed person pays 15.3% of their earnings in Social Security/Medicare payroll taxes; a person receiving the equivalent sum in rents and dividends pays zero Social Security/Medicare payroll taxes.
6. The assets that generate unearned income are highly concentrated, and as a result so is the unearned income. The top 1% owns twice as much stock-market wealth as the bottom 90%. This income-producing wealth enables the top 1% to act as a financial aristocracy, buying influence and favors from equivalently concentrated political Elites.............contd
http://www.oftwominds.com/blogdec12/fiscal-cliff-endgame12-12.html
Brilliant , I am so impressed