Saturday, February 27, 2010

Introduction: Changing Beliefs and Assumptions

Originally written in February 2010, some of the particulars have changed -- particularly prior to the Affordable Care Act became law -- the issues remain central for understanding and changing the control of our government, media and economy by the 1%. It is also important for understanding why the strongly progressive income tax is so important for implementing fundamental change. Some manor changes have been made for current clarity.
Richard S. Galloway

Many people tend to dismiss out of hand ideas that venture very far from what we have come to “believe” or accept as “normal” or the “way the real world works.” Most of our beliefs have been accepted without question from early childhood. Most of them are taught as fact in our public schools, our churches and other organizations we participate in and through our media. While this also applies to many of our religious beliefs, we are talking here about our beliefs about our country, big government, taxes, the free market economy.  Originally, these concepts were strictly secular -- or non-religious -- ideas. Over time, American "nationalism" [in its extreme form called pure chauvinism]on the one hand and “religious” beliefs have become intertwined and confused.

Such beliefs have been used since the dawn of human civilization as the simplest and most effective way of controlling people. Beliefs are very “cost effective” means of control. Beliefs imply basic agreement and living in accord with those beliefs without further inducements or the use of threats or force.

Changing beliefs is absolutely fundamental to changing how things are done. In order to understand the progressive income tax and its fairness, we have to change a lot of beliefs currently held by many Americans. Understanding how this works – the facts, the arguments and the false beliefs – is critical if we are to be effective agents of change.

We can be blinded by our beliefs. For example, many Americans believe it is better pay for their own health insurance directly to a diminishing number of mostly "non-profit" health insurance corporations through premiums. We put "non-profit" in quotes because clearly huge profits are being made which are rewarding those at the top in huge ways.  This health insurance system clearly drives our costs up and limit the care we actually receive.

The very rich who control most of what's going on tell us that we can trust them, but not our government to provide the best care and many people continue to believe it. We have been lead to believe that R & D are the reason for high medical costs. Do you know that the drug industry spend more on wooing doctors to their new drugs and advertising to create a popular demand for them than they spend on research and development? What does this expense add to our health care? Such advertising is against the law in virtually every other country and for good reason. It’s a way of creating an artificial need in the mind of the public.

In the private sector the first third of our premiums are spent on overhead. More is spent on profit, advertising, lobbying Congress to allow them monopolistic practices that drive our costs up… Supposedly removing high risk people and pre-existing conditions from coverage has been eliminated by the Affordable Care Act. Hopefully that is true. They still spend more of our own premium money figuring out ways to limit coverage, deny claims, add co-pays and lifetime limits... And many believe this is the best way of providing insurance. They believe that a single payer national insurance is somehow worse -- big government socialism -- and must be feared.

The fact of the matter is that the overhead cost of the VA and Social Security is only 7% as compared to 30% in the private sector system we now have. How can this be possible? Because most or all of the above practices used to bolster profits have been eliminated so that the rest of the cost is directly paying for the intended medical service.That’s an immediate savings of at least 23% of our health costs due to a single payer system of health insurance. That savings is enough to cover the cost of including the currently uninsured. Got that? We pay the same amount as we did before, but include everyone in coverage -- that's millions of people who cannot afford healthcare.

Not only is universal health care cheaper in Europe, but the World Health Organization – using objective measurements – has determined their quality of care is better than ours. [We are ranked #37 behind virtually every European nation in quality of care.] This is again exactly the opposite of what the health care industry wants us to believe. They are very successful in using the fear that governmental control over the health care industry will limit both quality and the availability of health care. It’s a lie. While you will hear anecdotal stories about how badly European health care works, it is not only objectively better, cheaper as a percentage of Gross Domestic Product, and...everyone is covered for all the basic, accepted needs no questions asked. That's the truth of the matter. It's a lot better than what we have on virtually every count.

Let's bring this back to the issue of taxes: Since trickle down economics became our economic model over thirty years ago, we have been have been taught to believe that decreasing individual and corporate income tax, capital gains, and inheritance taxes, new good paying jobs will be created and all boats will float up with the tide. If you are not in the very top income earners, how's that working for you?

Suppose we take a new look: What difference does it make if we pay our health insurance premiums directly to for profit companies or we pay the same amount through our taxes? Not only that, but with this same money included everyone's health care coverage at no additional cost. Can you explain to me what's wrong with that? If you fall back to the "big government is the problem" point of view, review the well established comparison of the experience in other countries regarding cost, universal coverage, and quality and effectiveness of service as statistically determined by the World Health Organization.

Are we beginning to make progress on changing beliefs? Are we warming to the idea that together we can provide for the common good through our democratic system? Are we maybe even beginning to question that the "free market" and capitalism are  God's plan? [Note: We are not saying they are  bad per se.  But we are saying that when it is not a free market, but in fact corrupted, controlled and manipulated from the top by the 1% it needs to be put in its place.] Do we agree that taxes have always been necessary to pay for the common good? We'll get back to that.

Or do we consider that despite the fact that polls indicate over and over that the vast majority of the American public favors a single payer program, the option is not even on the table. Why? Because the medical industry alone has eight highly paid lobbyists per member of Congress injecting millions of dollars into each of their campaign slush funds to keep universal health care off the table. Are we to trust these people to do what is in our best interest? I think not. But more importantly isn't this a direct subversion of our democratic system?

But people fear that our taxes will go up if we have universal national health insurance. True. But not all taxes are bad. If we can get better and universal health care for less than it costs us now as a nation, isn't a benefit  to pay more in taxes, when the net result is savings for us all? More in taxes, yes, but don't forget none of us are paying huge premiums, co-pays nor are our employers paying a substantial part of the bill. It really makes no difference in the long run whether we pay through premiums or though taxes. It’s the same money. In fact, today Europeans pay more in taxes, but far less as a percentage of their gross domestic product for quality universal care which is the only real measure of value received. That’s a fact, but the health industry in this country is doing everything possible to convince us otherwise and/or to buy the votes necessary in Congress to block all reform. That’s also a fact.

Many people believe that only the “free market” and “profit” can guide and effectively control the economy for the good of all people and that any other criterion is a “communist” idea and evil. This belief creates a mental wall that precludes us from seeing that sometimes human need for subsistence, schools, health care, a genuinely equal opportunity to strive to improve ourselves and the world we live in…are more important than profit. The number of examples we could include are infinite.

Beliefs are critical. Beliefs are central. Change requires changing beliefs. Fundamental change requires changing fundamental beliefs in fundamental ways. It’s as simple as that.

Where we are today is the direct result of a fundamental change in our beliefs begun over 30 years ago by the right wing as the way they would regain control over our nation as they had before the reforms of the previous century. They have been immensely successful in convincing the public that big government is bad…taxes are bad…regulation is bad. That everything that limits their ability to amass untold money and power is bad. [They, of course, don’t say it that way.] Today, a huge portion of the people of our country has totally bought into their worldview hook, line and sinker.

There is a major shift here moving into a whole new area which is likely to raise objections and cloud the issues.

Before this philosophical reversal in favor of the very rich again, we believed that government was there to provide for the common needs of all citizens and to insure fairness in the process... overall it was working to a relatively large degree. The Big Change began early in the post WW II era when so-called liberal views and policies prevailed. Again in a nutshell: it took the Great Depression and FDR for the situation to get so bad that as a nation we started a 50 year period of systematically taking away the extremely abusive power of the ultra-wealthy. Then Reagan supported by right wing think tanks began a slow but steady propaganda campaign to begin to reverse the reforms of the past 50 years. Slowly but surely, they began an indoctrination programs [such as endowing professors of economics at our most prestigious universities]aimed in the end to convince the majority of American citizens that those at the very top of the economy know and will do what is best for our country,...that God is on their side,... that they will lead us "as no one else can" as Trump recently promised..

What set up this belief system to begin to reverse the critical democratic reforms of the past half century? As a nation, we were working our way through the period of being the only major power who could oppose the Soviet Union after WW II. This was a very self-conscious first step by the very wealthy to begin to regain their hold on power. Fear, always fear. Make us afraid of something, and they can get us to do anything to oppose that something. That something was Communism. Now, make no mistake, the way that Soviet Communism was manifesting at that time, Communism was nothing to seriously support, despite the belief of quite a few Americans at that time. We were told that anything which served to balance the injustice between the rich and the poor was socialism or worse communism. This false moral claim of the conservatives was in direct contradiction to all Biblical injunctions about loving your enemy and helping the poor and those who cannot take care of themselves no fault of their own. However imperfect, we had worked towards such goals and had made significant progress on most fronts.

So what happened to change our minds? After WW II, America was the only world power able to stand up to the Soviet Union.We were seen as the savior of the world by many nations. What changed this central role we were playing?

The keys event was the first and second oil crises in 1974 and 1979. America at that time consumed something like 75% of the world resources while being only 5% of the population.  The two oil crises said to us, "your days are numbered...it's not going to work that way much longer. Just how long do you think such an imbalance can go on? Starting before WW II, the Third World began to wake up and say, "Sorry America. You don't get to take that much of the world's resources off the top.  We won't stand for such exploitation any longer, and they were right. Yes, we are a great nation and we have done many great things. But we can no longer ignore that a significant portion of our material wealth today is the result to taking land and resources from native Americans, building our infrastructure largely through slave labor, controlling economic conditions around the world by owning banana and rubber plantations, oil and other resource extraction...

The beliefs we bought into effectively removed any obstacle to their power.

They changed our beliefs fundamentally. We need to change beliefs back fundamentally. They succeeded and so can we. They accomplished their changes through the power of their money to control not only our economy and government, but also the information we receive through our schools and media. To fix it, we need to prove that we can change it back, not through spending tons of money. They have far more than we can afford. We need to prove that we can change it back without a huge input of money, but by the merit of our beliefs over theirs.

We have a plan to do exactly this.

Many of the beliefs popularly held in this country simply cannot stand in the face of hard facts or logic. For instance: If you are among those who believe in “political realism” – that the way the world works can’t be changed in the fundamental ways, as the Bible says it, “So be unto you according to your faith.” If you don’t believe we can do it, you won’t even try. Belief in failure produces failure. They win. We loose. So for starters, we who believe change is necessary,…who know change is necessary, we must first believe that fundamental changes can be made.

We invite you to put such limitations created by what we believe aside for a brief while and to try to imagine a picture of kinder, gentler world as if it were fully possible and realistic. Stilling your mind of objections is like preparing the soil to receive new seed to give them room to grow strong. If you let your mind continues to “argue with you” as you read the following material, you will not understand or believe it in the end. Remember, there is nothing in what we are proposing that does not have a history of success. It’s all been done before.

All change comes in stages. The new idea [belief] always comes first to challenge the old. At first all new ideas except those which serve their interests are ardently opposed by those with vested power in the status quo. It has been this way throughout history. Then comes the struggle to implement the change – and it has always been a struggle – often literally war. Only then can a new reality replace the old. This is the way of all progress in history.

Success in changing fundamental beliefs is just as possible as it was for the Copernican revolution, the Protestant Reformation or the abolition of slavery. The Copernican Revolution took many centuries for the church to accept the scientific fact that the Earth is not the center of all creation; the Reformation took a little over one century to remove the monopoly of the Roman Catholic Church over all matters religious and secular; the abolition of slavery only took about 50 years from the advent of the Abolitionist Movement until the Civil War put an end to slavery in our country – an institution that has existed for over 5,000 years. The tradition continues with civil rights, civil liberties, gender issues… Who could have imagined the progress we’ve made in the last 50 years?

In America today, in our democracy the voters can change almost any aspect of our common life in one single election if people decided they’ve had enough of the way it is and have a clear vision of what is needed to bring that change. Yes, that too is a fact! All these historic transitions succeeded despite immense and brutal opposition and almost total disbelief that they could change. So we ask that you give the following thoughts and dreams an opportunity to play out in your mind before you dismiss them. Before anything can change, we must first believe it. That too is a fact.

Four False Beliefs

In order to begin to change the way our government and economy work, it is necessary to confront mistaken beliefs frontally.

A.Big Government is bad
The first question is – can we trust our government? The simple answer is – not as long as it is bought by powerful, self-serving interests. That aside, the beliefs that government taxes and programs are by definition bad and inherently limit our freedom are among these misleading ideas. Governmental programs allow us to create and maintain the infrastructure and necessary functions of the commonwealth – roads, bridges, schools, Social Security and Medicare, police and fire stations, court buildings, the buildings that house our government, dams and water distribution, national parks and protected lands, health and safety issues, consumer protection, environmental protection, … How many of these things do you want to do without? Without them we would all be much poorer and far less “free to”… and “free from”… than we are today. How did they manage to get us to believe this is all bad? We will explore this subject at length below.

B.Governmental Regulation is bad
This issue starts the same as the last: As long as the process is bought, we cannot trust or rely on governmental regulation. But that has not always been the case. The Sherman Antitrust Act of 1890has guarded us from the destructive monopolistic power of corporations from then until deregulation and lack of enforcement gutted it. Now our government bails out automotive manufacturers and financial institutions with our tax dollars because the are "too large to fail." Likewise, the communications industry -- phone, broadcast radio and TV, cable, satellite, and possibly the Internet if we aren't careful -- to be dominated by a mere handful of internantional cartels which determine the information we do and do not receive in ways that let the right wing call even moderate Democrats "socialists" and worse and to make up their own "facts" largely unchallenged. At the same time, the majority of the progressive base of the Democratic base is left without a meaningful voice.

It was not always so. From at least the mid1800s, our citizens have fought hard to eliminate 60-80 hour work week in unhealthy and dangerous sweatshops, child labor, slavery itself and slave wage levels where people could not live on their wages and became “debt bound” to their companies, and the collective bargaining necessary to begin to mitigate these extreme abuses. More recently consumer, environmental, toxic substances, and drug quality to name only a few have protected us all.

First brought about by the economic abuses of the “robber barons” leading up to the Great Depression, we began to create laws and programs to change this. One example is the Glass Steagall Act of 1933 which created bank regulations which prevented the dangerous types of high risk and manipulative financial speculation like derivatives. From then until 1999 when most of the regulations were repealed we were protected from these abuses. Even Allan Greenspan, former chairman of the Federal Reserve – a leading advocate for limiting government regulation and taxes – has admitted that deregulation and his implicit trust in the “free market” economy have been a substantial cause of our current world-wide economic crisis.

Did these reforms diminish the profit of the rich? Absolutely. It couldn’t be any other way – but it was a necessary and fair adjustment. How short is our memory? Is governmental regulation is intrinsically bad as claimed by the extreme right? Cumbersome, sometimes? Yes. Grant that we need to reform bad regulation, especially where corporate interests have turned reform into protection for their own interests.
But intrinsically bad? Absolutely not. Government is the only power we have to protect the public from selfish private interests and we need it.

C.Are taxes bad?
Many of us have often wondered why there is such a strong reaction against the idea of the strongly progressive income tax. The way it has worked historically and the way we are proposing it, tax increases wouldn’t touch anyone with a gross income below $200,000. Even then not nearly as much as those earning more than $1.5 million. These taxes would fund the needed programs that help the rest of us. Why do people with incomes within these lower levels and virtually no realistic possibility of ever rising into that upper level resist? Taxes are not bad unless you want our Constitutional and legal protections, the kinds of services only the government can provide and much more to disappear. How else can we pay for all these governmental services and programs except through taxes? And who should pay those taxes?

The conservative argument goes like this: “… the top 1 percent of tax returns paid more in federal individual income taxes than the bottom 95 percent of tax returns.” OK, this is a fact. Their argument continues that this is somehow wrong or unfair. Exactly why this is so is hard to fathom. Their total emphasis on how much they pay in taxes, not how much they have left after paying taxes. It’s a bunch. [The top 400 incomes in our country have a lower threshold of $87 million with current after tax incomes of more than $67 million. It’s entirely disproportionate. And it’s unfair to the rest of us.

The widely held notion that there aren’t enough super-rich to make much difference even if we raised their taxes is another non-fact. It is correct that there aren’t all that many people making more than $1.4 Million per year in “taxable income” putting them in the top 2%. It’s less than 3 million tax payers out of over 141 million total tax payers. That’s a very small number but they manage to control our country. What is not true is that they don’t make enough money to make a material difference in tax revenues. Fact: If we increased the tax rate on only the top 2% of income earners as we did in from 1940-60s, it would add up to as much as $2 Trillion(!) in federal revenues per year. That is more than enough to put our federal budget in the black without gutting badly needed programs. Despite what the rich want us to believe the strongly progressive income tax is indeed a viable alternative to cutting spending in order to balance our federal budget.

D.Do taxes stifle economic growth?
The ever-present mantra of the right is that high tax rates undermine economic growth and lead to national decline. This is an interesting belief, but the evidence proves it wrong. While our discussion relates only personal earned income, not capital gains, non-taxable benefits or Corporate Taxes,...nor does it consider that the top 5% of the world population own 90% of everything, the following observations are instructive.See: See http://en.wikipedia.org/wiki/Wealth_condensation .

“Conservatives tell us displaced factory workers that their jobs will come back if corporations get to keep more of their profits through lower taxes. That might be a compelling argument... if it weren’t completely false. They have had their way for more than 30 years during which domestic jobs have been massively exported and very few good jobs created. Most new jobs have been low paying part time jobs with few if any benefits. It hasn't worked. That's the fact of the matter. The problem is not that corporations are overtaxed. In fact, a whopping two-thirds of American corporations and foreign corporations doing business in the United States pay absolutely no federal income taxes—taking on $2.5 trillion in sales.

“Compared to our competitors’ corporate tax rates, the U.S. rate is low. According to the World Bank and PricewaterhouseCoopers, the United States’ total corporate tax burden ranks 76th of over 100 countries. When conservatives claim that the U.S. tax rate is high, they’re talking about the “statutory rate.” But corporations treat the statutory rate as just a guideline—they use offshore tax havens and accounting loopholes to pay much lower actual rates.” Source:

Whether we are talking about a the strongly progressive income tax on individuals or corporations, the idea is not at all new or radical. Progressive taxes are a fact of history going back to ancient Greece and Rome – hardly what we would call “communist” empires. Born in 1913 our own income tax was “progressive” from day one. It became strongly progressive only three years later with rates beginning at 2% on the lowest incomes and rising to 67%. The highest rates only fell below 50% for only six years from 1913 until 1982 and went as high as 94% in 1944. It did not stifle creativity, capital formation, or economic growth. That’s all a lie.
Progressive income tax is not some “communist scheme” as the right has always portrayed any attempt to limit their absolute right to unlimited profit and capital ownership.

It can hardly be argued that the “radical left” ruled the entire time that the tax rates remained much higher than today. During the term of conservative president and former Supreme Allied Commander General Dwight Eisenhower the rates rose again to over 90%. “Name calling” is a way people use to avoid the rational examination of the facts cannot support their position. It is a way of using “guilt by association” to create fear so that people will not question their views. It is a way of using belief to blind people and close off debate. We will not question things if we think the only alternative is frightening or evil.

Nor can it be reasonably argued that taxes stifled the economy during this time. Taxes helped pay for the recovery from the Great Depression, WW II, financing the Marshall Plan through which we helped rebuild the war-torn world, massive expenditure on our national infrastructure including the Interstate Highway System [costing inflation adjusted $425 Billion alone]. During the same time American business and industry thrived, employment was almost non-existent, income growing in terms of real value on the lower and middle income levels, mostly single income families were increasingly able to afford homes, cars, health care, college and a long and growing list of amenities. Government programs also aided in civil rights, health and safety, enviornmental and many other forms of regulation to stop the worst abused of business and industry. And we did it without burdening our governments with huge debt. This is the exact opposite of what the right wing has taught us to believe. We have to change this belief. The historical facts are on our side but will make little difference if we don’t change beliefs.

The right wing claims that taxes are bad are entirely spurious from beginning to end. They are beliefs unsupported by the facts of almost half a century of American history when tax rates remained above 70% and went as high as 94%. They are beliefs used to allow and justify the huge and increasing disparity in income and the capital ownership of almost everything. See the post regarding the growing income gap.] It is the philosophy of the robber barons of the 1800s again wanting unbridled sway over the government and the economy to the detriment of the rest of us. They try to convince us that they have a “right” to unlimited profit and rationalize it with what they present as "economic law." It’s not. There is no such right as the ability to amass and hold extreme wealth protected by our Constitution. That’s a lie. They claim that low tax rates on the highest incomes are good for the rest of us. That’s also a lie.

In a world where extreme poverty and starvation exist on a massive scale, where we are depleting and poisoning our environment, where we are told that we can’t afford universal health care, quality schools… the 400 incomes earning over $67 Million after taxes today is inexcusable and morally repugnant. The strongly progressive income tax is perhaps clearly one of the most important factors in limiting the stranglehold of the ultra-rich have on our government and economy and at the same time “finding” the revenue to fund important services and programs while balancing the budget. We can change this if we can only get over these false beliefs espoused by the radical right wing. They are the true radicals. The are the only real elite in our country. All that is great about the vision of our founding fathers is on our side. It’s time to change things. And to change things, we need to change beliefs.

The Growing Income Gap

Income Gaps Between Very Rich and Everyone Else More Than Tripled In Last Three Decades, New Data Show
Source: http://www.huffingtonpost.com/2010/07/08/income-gap-between-rich-a_n_639984.html Note: The text below has been edited to include the most graphic information.

By Arloc Sherman and Chad Stone
June 25, 2010

[Editor’s note: Ask yourself what the rich have given us during this time – the savings and loan crisis, Enron, toxic mortgages, bogus derivatives used to bet with our money giving them huge commissions off the top and leaving our jobs, retirement funds and other investments depleted, the world-wide economic crisis these practices created, government budgets that cannot afford schools, police and fire protection, infrastructure maintenance… ]

The gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007, according to data the Congressional Budget Office (CBO) issued last week. …[The] new data suggest greater income concentration at the top of the income scale than at any time since 1928…

* Between 1979 and 2007, average after-tax incomes for the top 1 percent rose by 281 percent after adjusting for inflation — an increase in income of $973,100 per household — compared to increases of 25 percent ($11,200 per household) for the middle fifth of households and 16 percent ($2,400 per household) for the bottom fifth.
* In 2007, the average household in the top 1 percent had an income of $1.3 million, up $88,800 just from the prior year; this $88,800 gain is well above the total 2007 income of the average middle-income household ($55,300).

The CBO figures show that the nation’s income has grown substantially since 1979; if this growth had been shared more broadly, … after-tax household income increased 55 percent from 1979 to 2007, adjusted for inflation. If all groups’ incomes had grown by 55 percent, the average income of the bottom fifth of households would have been $23,710 in 2007 (rather than $17,700) and the average income of the middle fifth would have been $68,342 (rather than $55,300). [Editor’s note: These are not just empty numbers. It represents food on the table, reasonable housing, health care and other necessities for most of us. For the rich, it meant second and third mansion, yacht, private airplanes, and the ability to afford $ million country club memberships – let alone the ability to buy our government.]

Instead, the wealthiest households reaped a sharply growing share of the nation’s income, while the share going to middle- and lower-income households shrank (see Figure 3). Between 1979 and 2007:

Average After-Tax Income

Income Category 1979 2007 Change

1979-2007 From To % < $ < Lowest fifth $15,300 $17,700 16% $2,400 Second fifth $31,000 $38,000 23% $7,000 Middle fifth $44,100 $55,300 25% $11,200 Fourth fifth $57,700 $77,700 35% $20,000 Top fifth $101,700 $198,300 95% $96,600 Top 1 Percent $346,600 $1,319,700 281% $973,100 Source: Congressional Budget Office, Effective Federal Tax Rates: 1979-2007, June 2010. The CBO data only go back to 1979, but economists … have used tax data to calculate the share of income going to wealthy Americans back to 1913. Taken together, the … findings suggest greater income concentration at the top of the income scale than at any time since 1928. Bush-Era Tax Cuts Have Exacerbated Income Gaps

Legislation enacted under the Bush Administration provided taxpayers with about $1.7 trillion in tax cuts through 2008. Because high-income households received by far the largest tax cuts — not only in dollar terms but also as a percentage of income — the tax cuts have increased the concentration of after-tax income at the top of the spectrum.

[Editor's note: These are serious numbers: Nothing but "pin money" at the bottom; huge money at the top.And most people think that the tax breaks are fair and just.]

Change in Real Average After-Tax Income, 2006 to 2007 … [just 2 yers!]
Source: Congressional Budget Office, Effective Federal Tax Rates: 1979-2007, June 2010.

* Households in the bottom fifth of the income spectrum received tax cuts averaging $29, which raised their after-tax incomes by an average of 0.4 percent.
* Those in the middle fifth received tax cuts averaging $760, which raised their after-tax incomes by an average of 2.4 percent.
* The top 1 percent of households received tax cuts averaging $41,077, which raised their after-tax incomes by an average of 5.0 percent.
* Within the top 1 percent, those with incomes exceeding $1 million received tax cuts averaging $114,000, which raised their after-tax incomes by an average of 5.7 percent.

Pre-Tax Income Inequality Also Growing Rapidly

… The incomes of the top 1 percent rose 141 percent from 1979 to 2007 before taxes are considered, the CBO data show. The top 1 percent’s share of before-tax income … more than doubled from 1979 to 2007, from 9.3 percent to 19.4 percent.

By 2007, the top 1 percent had before-tax incomes that were 24 times higher than those of the middle fifth of Americans — a share that had nearly tripled since 1979.

The rapidly rising pre-tax incomes of the wealthy help to explain the notable rise in the percentage of total tax revenue collected from these households. …The increase in the share of taxes paid by the wealthy is often cited erroneously as evidence that their tax burden is rising. In reality, the effective federal tax rate … — the percentage of their income that they pay in federal taxes — declined from 33.0 percent of income in 2000 to 29.5 percent in 2007.

The top 1 percent paid a growing share of total taxes chiefly because they received a growing share of total before-tax income: 19.4 percent in 2007, compared to 17.8 percent in 2000. Indeed, the effective tax rate of the top 1 percent of households was lower in 2007 than in any year since 1990, demonstrating beyond a doubt that their tax burdens were decreased, not increased.

CBO Data Offer Most Comprehensive Look at Inequality

These CBO data are the most comprehensive data available on changes in incomes and taxes for different income groups, capturing trends at the very top of the income scale that other data sources, such as Census data, do not show.

Census income data do not include significant amounts of income received by high-income households. For instance, they ignore earnings above $1 million in order to help preserve confidentiality. If an individual makes $10 million a year, the Census records those earnings as $1 million. (The Census data also do not include capital gains, which constitute a large share of the income of wealthy households.) Partly for this reason, the Census data do not break out trends among the top 1 percent of households, where income gains have been especially concentrated.


* Copyright © 2008 - 2010 Center on Budget and Policy Priorities. All rights reserved.

Friday, February 26, 2010

A Good Antidote: The Strongly Progressive Income Tax

To begin to understand the progressive tax’s immense potential to change things for the better, it is necessary to challenge many assumptions we have come to believe as simply the way things are. The world-wide economic crisis we are experiencing today and the names of those most responsible for it are in headlines day after day. They are the advocates of conservative economics which espouses lowering taxes for the rich and eliminating all government regulation. They promised that business and industry would thrive and that “all boats would float up together with the tide.” This was also known as “trickle down economics.” They argue that this allows “free enterprise” to maximize creativity and to produce the greatest good for the greatest number of people. they have had it their way for more than 30 years and it has proven itself to be totally false. It’s an interesting theory, nothing more.

Back about 1990 Dan Rather reported on a study by the Congressional Budget Office which the quantified how the money “given back” to the ultra-rich in Reagan’s tax reduction program. The largest category was “conspicuous consumption” – multiple estates, yachts, planes, expensive cars [many of them foreign and therefore benefiting our economy little]. The next largest category was investing the money – that would have gone into our Federal Treasury – overseas to start new businesses there. The direct result, Rather continued, was closing our own businesses and industries! Why? Because they could make far more profit for themselves abroad. It’s pure greed and it has cost our domestic workforce and our balance of trade dearly. The lowest category measured [and it sounded like they had to stretch way down to include it] was reinvesting it in our own country to create jobs, income, and taxes… That’s the truth of how “trickle down” really worked! It didn’t except for the very rich.

The results of the period of low taxes from 1980 to the present are proof that right wing theories and beliefs actually created the crisis we face today: The progressive concentration of wealth and more power to control our government and economy, the intentional closing of American business and industry and exporting them to markets where far higher profits could be made due to low incomes and no governmental regulations to speak of. They have gutted domestic regulations or refuse to fund [low taxes] critical programs involving health and safety, the environment, collective bargaining, consumer protection to name only a few. The majority of these programs were not profligate spending as they contend, but vital to the wellbeing of us all.

They continue to claim that the Democrats are “tax and spend” and have been responsible for our current debt level. This is simply not true: By far the biggest budget shortfalls have all been under the conservative control of the presidency and/or Congress. At the end of Carter’s term the total federal deficit was $0.828 trillion. Eight years later under Reagan, it more than tripled reaching $2.6 trillion. Carter’s budget deficit for 1978 was $40 billion for the year. Reagan’s deficits grew to $155 billion or nearly four times Carter’s. Clinton has been the only president since Reagan who actually achieved a balanced budget and reduced the federal debt. The claim of “tax and spend” Democrats does not hold water.

Then came Bush II: To complete the thought on tax and spend, none of the Republican presidents actually reduced spending. Spending has always gone up steeply under their leadership deThe strongly progressive income taxe their claim. “The 2009 budget proposed by President Bush predicts a net deficit of approximately 407 billion dollars, adding to a U.S. governmental debt of about $10.2 trillion. Bottom line: Since Reagan first began to reverse over sixty years of the strongly progressive income tax, the federal debt has risen from $0.8 trillion to over $10 trillion or is now 12.5 times larger. The cost of interest on the federal debt is currently $239 billion or 9.5% of the total government spending and rising rapidly. Had tax rates remained high, we would have eliminated most of that debt while adding almost 10% [the cost of debt] each year to pay for our government. With compound interest, this number is growing rapidly and will consume ever greater portions of federal revenue until projections say the debt service consumes the total revenue collected.

One of the hidden issues is that there is no discussion of actually paying off the federal debt. That is to say, long after the highways and schools bought through debt are gone, we will perpetually be paying the bill for things that no longer exist. Think about that for a while. We have laid that at the feet of our children. Is government the only major reason for the federal debt as conservatives argue? It’s part of the reason? Of course. The only major reason? Absolutely not. The most important reason is the unwillingness of the rich to pay their honest portion of the cost of government through the the strongly progressive income tax.

Tax cuts which have always heavily favored the highest income brackets have virtually bankrupted government on all levels. Any ability of government to reverse the trend by raising taxes are nearly impossible because conservatives who are in the minority have the ability to “veto” any legislation through the threat or use of the filibuster. This is an issue on which they have refused to budge and the Democrats have let them get away with it. The results of tax reduction has been the exact inverse of what conservatives promised. They have it exactly backwards and it’s time for progressives to stand up and say that clearly.

1.How does a progressive tax helpchange the way “business is done.”
Why does the The strongly progressive income tax have such a strong impact across the whole range of issues? If the ultra-rich have bought the reigns of power on almost every front, trying to accomplish any change which is not desirable to them has almost no chance of being enacted. And that includes sharing any of “their money” with the rest of us. Why do you suppose that the health reform bill quickly ran over a thousand pages? Clearly because the health care industry in had first say on every issue affecting their particular business.

A prime example of how attempts at reform have the opposite result is that the health care reform bill as it currently exists prohibits our government from negotiating with American drug companies for the same drug prices they charge to other countries. We are required to pay retail prices for what are clearly wholesale purchases. That’s wrong and it hurts us all. If the current bill is passed, it would make the huge profits they have now a matter protected by law.

And so it goes issue by issue. Even the bills we think are going to make badly needed reforms end up continuing “business as normal” only in a less obvious way. If you doubt these decisions are substantially “bought” please refer to the campaign funds tables which cover only a few issues. This issue transcends political parties. Both parties are addicted to huge campaign funds to seek or retain office and equally guilty for the way business in done “inside the beltway.” How does the progressive tax begin to make a dent in all such issues? By taking away the huge excess expendable income of the ultra-rich. If they don’t have it, they can’t spend it. Not to buy Lear jets and not to buy Congress.

Just to get the picture, imagine the highest tax bracket starting at $87 Million went as high as in the 1940-60s. At today’s tax rates [max. 35%], the highest 400 incomes keep a net after tax of more than $67.5 Million. At 90%, their net income would go down to a mere [?] $9.5 Million. For them that would be poverty leaving them barely able to pay the mortgages on their multiple estates, planes, yachts, country club, private boarding schools and the like. Think about this: The difference between today’s rate and the imagined 90% rate is $58 Million less than they had before. That’s money they don’t have to fill the campaign coffers of or otherwise bribe every candidate from dog catcher to President regardless of which party they represent, or to spend on million dollar ads designed to make us fear the public financing of elections, serious limitations on lobbying, etc. which threaten their hold on power.

2.The “dampening effect” on greed
In this light, the strongly progressive income tax has a “dampening effect” on the greed we see behind almost every headline like the recent announcement that Wall Street is giving itself an additional $20 billion in bonuses they clearly don’t deserve. If the ultra-wealthy no longer have the money to buy the process, fundamental change becomes possible – to have a government that is responsible to the citizens, not to corporate interests.. The "magic" of the strongly progressive income tax is that it works "behaviorally." When income reaches the level that it become obscene, the tax turns the lion’s share into government revenue. That result alone is moral without being moralistic: It has positive benefits on both ends of the issue: It increases badly needed government revenue on the one and on the other limits the power of the wealthy.

It doesn’t make any difference how they make “an obscene amount of money.” The more they make, the more the government takes back as revenue. It reduces the incentive of extreme greed and thereby reduces the needs for stifling and minute rules and regulations, people to audit compliance and lawyers and courts to enforce them. It is the current complexity of rules and enforcement that makes it difficult to imagine how tax policy change is possible. More laws, more loop holes, dodges and outright cheats. While you can’t legislate morality, other controls become less important when the motivation of greed to do anything in the name of profit is progressively taken away.

Suppose we reintroduce [yes, reintroduce] the strongly progressive income tax? This one regulation touches every aspect of our economy and government. It's simple and it's straight forward: The more they take, the more the government takes back. The reward diminishes progressively until it's hardly worth it. Let’s explore how this would work in more detail. If the CEO of the XYZ Corporation decides not to take additional income or bonuses, those monies would stay within their companies to be shared more equitably among all the “stake holders,” invested in R & D, reduced prices to clients/customers, becoming more competitive in the world market resulting in more domestic production, more exports and fewer imports improving our balance of trade, fully funded retirement, day care for employees, health and safety improvements, health care benefits, etc. That’s the opposite of what they want us to believe.

Or if the CEO takes the bonus, those monies mostly become the taxes to build, maintain and improve the commonwealth. Let’s examine this more closely. Say the CEO takes an additional $20 million in bonus – not at all uncommon today. And let’s say that we make the highest tax rate go to an unimaginable 99% on all income over $87 million. Finally, let’s assume his income is already above this threshold so that the entire $20 million would be taxed at the 99% rate. How would that shake out? Would it kill incentive? After all, the poor guy would only get $200,000 in after tax income. If that’s still not incentive, what is? Does that break your heart? That alone is more than 95% of us make – and that’s just his bonus! The other thing that would happen is the there would be an additional $19.8 million in federal revenues. Can anyone explain again why that is bad?

Hopefully, at some point the greedy begin to say “never mind.” Maybe other things can become incentive for them like enjoying the problem solving,… the creative process,… being a genuine and co-equal part of the team,… really caring about the quality of the product or service their company provides… keeping the price as affordable as possible,…caring about all the stake holders: the employees who help create the wealth,… the stock holders who provided the necessary financing,… the customers and clients who purchase their output,… the people who live next door to our plants and the places the raw materials come from….

The list of morally valid reasons to achieve are absolutely limitless. People who go into medicine, the law, governmental service, etc. for idealistic reasons just might be able to maintain that positive vision and actually serve their communities for its own sake as they intended if they stop focusing on profit alone. Maybe those who only go into these fields to make lots of money won’t – and they will be little missed. Maybe more noble goals would actually re-emerge if the strongly progressive income tax mitigated extreme greed. Maybe “high achievers” would find higher forms of motivation. It’s not promised. There is no utopia. No. Of course not. But, does progressive income tax go further than almost any other single step to correct the ills that plague us? Absolutely. This tax behaviorally changes the world we live in for the better.

One thing for sure, it no longer goes into their pockets or into campaign slush funds. This tax structure worked during the post WWII boom and it will work again if we can sell it. The time is right. Deep in our hearts, we believe people know this is one of the fundamental changes we need to heal our world. It touches almost everything in a corrective way.

Such reforms can’t be done timidly or piecemeal. the strongly progressive income tax is one of the fundamental change needed to reverse the destructive trends which sap our country. It is necessary before we can seriously hope to win the battle for issues crying for attention and resources. It is an issue which should and can unite all who care about the future of our planet regardless of our particular party or organization, or their concerns and beliefs. “A little yeast leavens the whole loaf.”

Therefore, the Fundamental Reform Network proposes that all people of good will make
the strongly progressive income tax one of their own single, non-negotiable criterion on which we base our next election.

The Post WWII Boom

Are these views of seeing government as our ally and the progressive income tax as a necessary part of the picture just a pipe dream? In a nutshell, from the beginning of American history and through the Great Depression there was a progressive concentration of wealth in the hands of those we called Robber Barons – the captains of business and industry. It was a time of sweat shops, child labor, 72 hour work weeks for slave wages, ruthless private security forces like the Pinkertons and violent union busting, no health or safety regulations, no retirement programs, … Then as now all attempts at reform were labeled socialist or communist which we were taught to hate and fear from our earliest schooling. Yes, even back into the early 1800s these fears were fostered to solidify the power of the wealthy.

It took the Great Depression and World War II to finally make public regulation restricting the Robber Barons so necessary that all their wealth and power could no longer buy taxes and regulation off. Things began to change for the better, but we’ll come back to the abuses of the Robber Barons later.

The decades following World War II were a boom time. The country was thriving. The middle and lower classes were gaining ground rapidly. Unemployment was almost non-existent. Incomes were all steadily rising as was production. People could afford not only cars, homes, schooling, and health care, but a growing list of amenities and conveniences. This was accomplished by single-income families for the most part. Savings rates were at an all time high. That enabled us to make huge investment in business and industry,…plants, machinery, R & D,… on the private side.

Taxes were in the 90% range at the highest and our governments could afford much of the enormous investment in our common infrastructure on the public side: The Interstate Highway System [$425 Billion dollars adjusted for inflation for the 42,700mile highway system alone], air ports, sea ports, the ships of the merchant marine, schools, libraries, national defense, … Inter-related, the private and public sectors grew along side of each other and reinforced each other. Social Security and retirement systems were being fully funded. Health care for the majority was increasingly available and affordable. Immigrants were flooding into the country and making a welcome contribution to our economy. And perhaps most importantly there was plenty of capital to invest in our own growth plus rebuilding war-torn Europe and Asia through the Marshall Plan. Yes, there were problems but we were not only making economic progress but also in the fields of civil rights for minorities and women, civil liberties, health and safety, ,…clean air and clean water, …


If during the Great Depression or World War II someone had prophesied the “1945-70 boom”, no one would have believed it. In many ways, it doesn’t even sound credible today, especially to those who have no memory of this boom time. But it was not just a dream. It really happened on an amazingly broad scope. We would argue that this was in part because of the high tax rates on the very rich, not despite of it.

Where things were not yet fair [such as with minority rights], we were fighting those fights and making substantial progress. There’s a kind of a built in hope, an implicit respect… almost a hidden set of morals in the worldview of that day. We were proud of what we were doing and for mostly valid reasons. Most people didn’t need laws or police powers to do what was generally honest and good. No, it wasn’t perfect or utopian, but it was a far cry from the way things work today.

A Short History of the Progressive Income Tax

What factors were so different then that allowed the progress made? The strongly progressive income tax was a major reason things worked so well. Why? The progressive tax was a leavening agent. “A little yeast leavens the whole loaf.” It allowed for rewarding personal effort appropriately, and yet it did so on a diminishing basis. It can be observed without apology that this tax structure works the exact opposite of the way most of us have been taught to believe about the infinite fairness of capitalism and the free market economy.

The underlying principle of the strongly progressive tax is the exact opposite: It assumes that –while respecting rewards honestly earned through hard work, creativity and risk should be guarded -- the greatest control and benefit should go into the common wealth, not to a privileged few, and that our system works at its best under those circumstances. There is strong evidence of this today that the highest economic growth rates and capital investments are in the countries that have universal health care, robust public education through the college level and a strong system of safety nets – the exact opposite of what we are normally told here at home.


What was going on was entirely contrary to the conservative elitist worldview that came into back into ascendancy starting with Reagan and hopefully is now beginning to abate after the end of the Bush/Cheney administration when it peaked again. The free market world view never really accurately described what was going on. First of all, it isn’t really a free market at all. It is controlled by the very rich who have instituted all sorts of protections, subsidies, and other self-serving ploys which give them virtual monopolistic power against competition. This belief system purported that business and industry will behave honestly and in the best interest of everyone. In truth, it only described the way the most powerful people wanted us to think the world works. In fact, a democratic and populist point of view which began with President Wilson during WW I and exploded during President Roosevelt’s underlay the entire boom period.

The reversion in our beliefs was carefully crafted by conservatives to “explain and justify” what was in reality a shallow guise for the rampant gain of the ultra-wealthy. Reagan called government and taxes “the problem, not the solution.” How were the right wing able to pull this off. We had come through the turbulent times of the Viet Nam war and the height of the Civil Rights movement. Leaders had been assassinated. Cities had burned. People were afraid. Then two energy crises and growing environmental concerns had begun to shake our national confidence and for good and valid reasons – however uncomfortable to face. Many objected to governmental programs bringing fairness and justice to the poor – particularly minorities – believing these people were the causes of our troubles, not the victims of it. They were not!

While playing on prejudices and fears and our wish that American dream be real, Reagan began to reverse the regulations which had had protected the public from the worst abuses of business and industry and limited the ability to amass wealth at a rate not seen since before the Great Depression.

As we observed before, it had taken the depths of the Depression to make things bad enough that under Franklin Roosevelt we finally broke the worst of the power of the ultra-rich. For the next several generations, basic fairness underlay our economy and governments, and [as the conservatives like to say], “all boats float up with the tide.” But the tide that came in was the result of a the strongly progressive income tax and regulations limiting the abuses of business and industry. The real rising tide of that time was the complete opposite of the “trickle down” economics espoused by conservatives under Reagan.

Tax Reform

1. Income Tax only covers a small portion of real income and wealth in the form of ownership.
It is also important to consider that when we are discussing income tax, we are only the “adjusted gross income.” That is after they have used every deduction, tax shelter, hidden money in off-shore accounts and otherwise limited the small portion of their incomes on which they actually pay taxes.

The income tax also excludes all the additional income they receive from capital gains (taxed at only 25%) made on their investments and the value of their perquisites and stock options which will also eventually be taxed at the modest gains rate. It makes no attempt at measuring “net worth” or the “owned value” of their multiple estates, yachts, airplanes, memberships to elite clubs often costing over a $ million, stocks or other ownership of business – or [only a little tongue in cheek] the Congressmen they own. It does not include the way that low estate taxes allow the accumulation of wealth to be transferred from generation to generation in a way that at least imitates the wealth and power of nobility in previous times. So when we talk about seriously reducing their after tax income, we are only talking about a very small percentage of what gives them undue advantage over everyone else.

2. Eliminating Tax Exemptions
First of all, we propose that virtually all exemptions be stripped from the tax system. Exemptions are one of the most corrupting influences on all levels of government. They are the result of all sorts of backroom politics, and are bought by campaign contributions and outright bribes. They allow one party to benefit in ways not granted to others. They are absolutely contrary to the democratic principles our country is based on. It would seem that proponents of the so-called “free market” would be the first to insist that exemptions not be allowed because they are contrary to their “principles.” Exemptions clearly and necessarily interfere with the free market. In the fairest system, all income from all forms would be taxed at the same rate as earned income. Removing all exemptions and tax havens leaves personal economic decisions to be made solely on their own merits without arbitrary limits or incentives. Tax advantages distort economic decisions toward the interest of one particular group. Where incentives are needed for the benefit of society or the economy at large, there are other, fairer ways to provide a boost for worthy goals.

Another major advantage implicit in eliminating all exemptions is that the tax structure would infinitely simplified. Without a million complicated regulations and exemptions, “gross taxable income” would be identical to what is today the “adjusted gross income.” There are no adjustments to taxable income or any of the painfully wasteful processes of trying to maximize deductions. With the elimination of all adjustments, the games, cons and dodges are all gone. The need for hoards of tax consultants to understand the arcane tax regulations [which run thousands of pages of mind-numbing accounting babble], to produce the complicated forms and the similar mass of IRS employees needed to check our deductions and the calculations is almost completely eliminated – and all the costs implicit in the process. I have seen numbers on the possible savings that result from tax simplification: They are very large numbers. We have better ways to spend that money.

The simplifications brought about by eliminating exemptions are exactly the same arguments made by those like Steve Forbes in support of a “flat income tax” based on a single “tax rate” for everyone regardless of their total income. Or alternately, a “flat sales tax” as the only tax. Good idea Steve. But there is no reason to couple the elimination of exemptions and loopholes to the flat tax rate which favors the wealthy instead of the common wealth. Such a flat tax always hits the poorest the hardest – taxing necessities more harshly than luxuries.
No tax deductions are assumed in our proposal.

3.How a “Progressive” Tax Works
Many people think that if a progressive tax has a highest rate of 90% as it did in the 1950s, it means that those people in that bracket pay 90% on every dollar they earn? How could that be fair. The shock of this misunderstanding leads many to reject the idea of a strongly progressive tax as unreasonable from the start and precludes any further consideration of the issue. If this is your understanding, imagine as your income approached a new tax bracket making your rate increase from say 30% to 35% and that a few more dollars in income meant that you would be paying an extra 5% on your entire income. If you got a raise of $2,000 which cost you an additional tax of $3,000 in taxes, earning more money would be a set back. Moving up the tax brackets seems like a step backwards.

It doesn’t work that way. Only that small additional amount would be taxed at the higher rate. If you went $2,000 into the higher bracket, you would pay an additional tax of $700 while your after tax income would go up by $1300. In other words, you always have economic incentive to better yourself. If you hate paying taxes altogether, you can always quit your job. Then you won’t have to pay any taxes at all. Otherwise, taxes are simply a cost of being a citizen of our country and paying your share of our government and its programs according to the level you have been blessed to achieve.

So how exactly does the progressive tax work? Using purely hypothetical numbers for simplicity, let’s say incomes below $30,000 wouldn’t be taxed at all – as they weren’t in the early years of the income tax. That would mean that the first $30,000 everyone makes would be untaxed. If the next bracket tops at $100,000 and is taxed at 10%, everyone at or above that bracket would pay 10% only on the income between $30,000 and $100,000 or a maximum of $7,000. If the next bracket tops at $200,000 and is taxed at 20%, they would pay that only on the next $100,000 making their maximum tax $27,000 [$7,000 + $20,000] giving them a net after tax income of
$173,000. Up to this point, these are close to what people pay today on “first income.” Everyone would get the same net income on the first $200,000 – and so on up the ladder. Confusing isn’t it? There are several points. 1) The “first income” of everyone is taxed at the same rate regardless of how high the income reaches. 2) It needs to be understood that the very rich pay the maximum tax rate only on the income falls within that top bracket.

If we apply this to the current tax rates, what do we discover? Today’s rates top at 35%, an extremely low rate not seen since 1930! Those in the bottom half of the income earners [below $32,000] pay an “effective tax rate” of only 2.99% while the very top income earners pay an effective rate of 22.45%. The best numbers available tell us that the top 400 incomes in our country are all in excess of $87 million each. At that level, they have an after tax net income of $67 million – more than pocket change, wouldn’t you say? But even that is deceiving in that there are a few incomes that are in excess of $400 million, meaning that they would have an after tax income of $312 million. In a country where poverty and starvation still exist, that’s obscene!

Now suppose taxes went all the way to a record high of 99% on income over $87,000,000, the people making $400,000,000 would still get an additional net income of $3.13 million dollars plus something on the order of $9 million net on income under $87,000,000. Even at these historically high progressive rates, they end up with approximately $12 million net income. That’s still a lot of money and is hard to justify in any sense of fairness. These numbers are at least in the ball park and are what they don’t want us to know. These are the Wall Street executives who brought us toxic mortgages, derivatives, who brought the world to economic collapse, and who have just given themselves another $20 billion in bonuses.

Why do we put up with this? In what sense are they earning their [our] money? What have they done to the benefit of our nation? Our answer is “Nothing at all!” They are ripping us off.

If we quit believing that such a strongly progressive tax is in the final analysis unfair,… and if we instituted these rates, it would create something on the order of $2 TRILLION in tax revenue. That’s more than enough to put the budget in the black and pay for the needed programs plus begin to pay down the national debt. And they tell us we should reduce their taxes even further and cut the national deficit by cutting more programs that serve the public need. Who can explain to me again why high taxes for the rich are wrong?

4.The Strongly Progressive Income Tax Works Behaviorally
Now back to the “dampening effect:” For those who are always looking for “more of the pie,”… status, power, etc.: they face diminishing returns for their gambits and gambles. The strongly progressive tax works in a very “behavioral” kind of a way by taking away the results of extreme greed – the more the greedy take, the more the government takes back. There is progressively less incentive for extreme greed. That’s behavioral. Unlike attempts at regulating every minute aspect of the economy, it doesn’t matter how they make their money… it doesn’t matter if it is fair, just or moral… One tax policy covers the entire economy including every profiteering ploy they might create. The need for tons of minute attempts at regulation and the cost of enforcing the rules is all but eliminated. The results are moral without being judgmental or moralistic. Once you begin to let your mind “live within” these ideas, all sorts of positive possibilities begin to flood your mind.