Time to Reverse the Exploding Income Disparity Trend

Source: https://acivilamericandebate.com/2011/04/10/the-30-year-growth-of-income-inequality/

There is one simple explanation for the explosion in the wealth of the top 1% of U.S. earners, and it is the long-term capital gains tax rate.

This rate, currently at 15%, insures that the wealthiest Americans, who earn the largest percentage of their income in the form of long-term capital gains, will pay a rate comparable to single filers earning up to $37,450 per year.

For example, in 2011 (the last year in which his tax information was made public), former presidential candidate Mitt Romney earned $13,709,608 from a combination of capital gains, ordinary dividends, taxable interest, speaking fees and corporate directorships, but paid only $1,912,529 in taxes for an effective tax rate of 14.1%.

While itemized deductions in the amount of $4,681,842 helped reduce his taxable income significantly, the 15% rate applied to long-term capital gains in the amount of $6,810,176 played the largest role.

Since the rate was lowered to 15% by G.W. Bush in 2003 in the wake of 9/11 (Osama Bin Laden's indirect gift to the super-wealthy), the after-tax income of the top 1% of earners has gone up over 2.5x, while the income of the highest fifth of earners has merely doubled and the income of the middle fifth has stagnated, barely keeping up with inflation.

The principal reason for this is that the the lower your income, the more likely you are to earn it by way of a paycheck or business income, subject to payroll deductions and a tiered tax rate system with a peak rate of 39.6%.

How this is even remotely fair is beyond my comprehension, but fairness issues aside, income disparity on this level is dangerous to our democracy and strains the fabric of society. Therefore, I propose that we begin treating all long-term capital gains like regular income.

If this had been the law in 2011, Mitt Romney's effective tax rate would have been 26.3%, even after itemizing $4.6 million in deductions (including $2.3 million donated to charity). This, I believe most people would agree, would have been a fairer and more fiscally sound outcome.

It's Time to Replenish the Strategic Petroleum Reserve

With crude oil prices getting close to all-time lows (when adjusted for inflation), now is the time for the Obama Administration to put the strong dollar to work and refill the SPR, and to consider adding a new site to increase the total storage capacity to the original target of 1 billion barrels.

Wild swings in commodities prices are not good for the economy overall. While the drop in the cost of oil and gasoline translates to more cash in consumer's pockets, which can translate to increased consumer spending and economic activity, crude prices that are two low can have negative impacts.

One negative impact is in that it takes the wind out of the sails of efforts to conserve. For example, at $2.20 per gallon for regular unleaded it takes over eight years for the owner of a typical hybrid automobile to recoup the added cost of the vehicle. Since that is longer than most people hold onto a car, there is essentially no financial incentive to buy the most energy-efficient vehicles.

And, since low oil prices feed through to energy prices overall, including the price of electricity, we can expect planned investments in wind and solar generation to be subject to re-evaluation.

Finally, it is the best interest of the United States to maintain the largest stockpile of crude oil possible to shield us from future supply shocks.

Therefore, Obama should authorize new additions to the SPR to help underpin crude prices and to provide us with an increased reserve against for the future.

Domestic Gun Control is Not the Correct Response to Acts of Terrorism

Syed Rizwan Farook, ISIS sympathizer

Once again, the Democratic leadership is immediately latching onto the cowardly San Bernardino shooting as a justification for increased gun control. In fact, at the time their statements were read, it was not yet clear if this was a workplace shooting or an act of terrorism, which bears significance in terms of its implications for gun control.

A workplace shooting, by a disturbed or disgruntled employee, is something completely different from an act of terrorism. A workplace shooting is most commonly a spur-of-the-moment action in which the shooter reaches a certain point and decides that "enough is enough". An act of terrorism is usually something that is planned well in advance, often with the support of associates foreign and domestic, by individuals who are driven by ideology and hell bent on destruction.

The workplace shooter will typically make use of whatever weapons he happens to own, with whatever ammunition he happens to possess at the time. The terrorist will carefully select their weapons and will amass a cache of ammunition. The terrorist will get the weapons by whatever means necessary, and will not think twice about buying guns on the black market if that is the only route open to them. Or, finding it difficult to obtain weapons, the terrorist will plan to commit acts of terrorism by other means, such as with explosives, with unpredictable consequences.

For example, in France it is completely illegal for private citizens to own fully-automatic Kalashnikov rifles of the type used in the Paris assaults. However, that is exactly what the attackers used. And, since concealed carry permits are not available to Parisians, the victims had to wait for the authorities to arrive to repel the attackers. That extra time resulted in over 130 dead.

Therefore, more stringent gun laws will not stop the determined terrorist, and this is something the Democratic leadership should have considered before they went public with their responses to the San Bernardino shooting.

What will help minimize casualties are more weapons in the hands of those trained and able to use them, be they private citizens or law enforcement officials. Gun laws that make it harder for law abiding citizens to obtain weapons of self-defense will leave us all vulnerable.

It is no coincidence that the attackers selected a "soft target" such as a community center for the handicapped and disabled as the site of the attack -- they knew that they would be unlikely to face armed resistance there.

By the time the police entered the San Bernardino community center the shooters had already fled. What might have happened if several of the employees had been armed that day? Could they have held the shooters at bay, buying valuable time? Could they have stopped them? I can envision a future in which law enforcement trains and deputizes tens of thousands of regular citizens nationwide so that they can be equipped to intervene and stop acts of terrorism and violence in time to save lives.