According to the Social Security Administration (as of 2013), 50% of all wage earners had annual net incomes of $28,031 or less (the median wage). Two people working and earning this "median wage" (and living together) would have a net household income of $56,062 a year. The annual "median household income" is currently about $53,880 a year — because most households have more than one income.
This household income can come from a mix of several sources: from two or more "wage earners"; or one wage earner and a retired person on Social Security; or three people collecting an unemployment check (you get the general idea). These are dual or multiple income households.
A household income can also be provided by just one wealthy person, whose only income might be derived from capital gains through the sale of things such as stocks, real estate and SWAG investments — or from an inheritance or trust fund.
Because Social Security taxes are only levied on "wages", and because of the "cap" on Social Security taxes, about 94% of all wage earners pays this tax on 100% of their annual income. Whereas, a very wealthy person could have an income of $20 million a year from capital gains — and pay no Social Security tax at all if all their income was from this unearned income (aka investment income).
And regular "wage earners" also pay more in other taxes (such as state, local, city) as a percent of their income, mores so than the very wealthy do. Where Bill Gates live, Washington State’s tax system is the most regressive — the bottom 20 percent of taxpayers pay 16.8 percent of their income in taxes, while the top 1 percent pay just 2.4 percent.
About one-fifth of American households have zero net wealth. When you exclude housing, the percentage of those with zero or negative net worth comes close to 30. Most of the poor and the middle class have almost no financial assets (unless an "asset" is a home that they “own” — or is mostly owned by a bank). Add to, their car loans, school loans, credit card loans, and you can see how a large chunk of American households may even have negative or zero wealth (and why in the wake of the recent recession that percentage increased).
But even in spite of this dismal news for America's poor and working-class, one Democrat thinks we should tax the top 1% to give the top 5% a tax break. (WTF!!!)
Representative Chris Van Hollen of Maryland, the ranking Democrat on the Budget Committee, proposed a plan to tax Wall Street financial transactions and raise taxes on the top 1 percent of earners ——> to pay for a “paycheck bonus credit” of $2,000 a year for couples earning less than $200,000. His plan also calls for a tripling of the tax credit for child care and expanding tax incentives for savers.
A “paycheck bonus credit” for those earning $200,000 a year? Is he crazy? Also, that tax cut might also include members of Congress (such as himself) — assuming a "couple" can also include an unemployed partner.
First, the “paycheck bonus credit” should be double that ($4,000 a year) — and second, it should be made to ALL wage earners (not just to couples) — and third, it should only be given to people who are only making $50,000 a year or less (which is 72.8% of all wage earners).
Giving something akin to a "helicopter drop" (a cash transfer) to households earning $200,000 a year is ludicrous. Assuming two people with incomes of $100,000 each, that still puts them in the top 93 percentile range of all wage earners.
FYI: Only 1.7% of all wage earners make more than $200,000 a year — and $118,500 a year is the cap on Social Security taxes. (Why can't Congress ever propose and pass laws that won't also personally benefit them — and/or the very rich?)
Congressional Democrats also recently reintroduced legislation to block companies based in the United States from shifting their headquarters elsewhere to lower their tax burden (known as tax inversion). And Senator Bernie Sanders ("a man of the people"), continues to propose an expansion of Social Security. But the Democrats may just be engaging in political "messaging", because when they had a chance, they never passed real tax reform. And so, Rep. Chris Van Hollen's tax proposal is both mute and silly, because it's common knowledge that a GOP Congress would never agree to such a tax increase on the rich.
But now that many Americans (both on the left and right, as well as Independents) have began to hold more economically populist views, the GOP has also been concerned about their own political messaging. Sean Spicer, the communications director for the Republican National Committee, said Republicans need to do a better job of explaining their policies in an emotional way that shows voters they care about them and understand their life experiences.
“It’s not that we want to cut taxes because the math looks better,” he said. “It’s because we want people to make better decisions for themselves and believe they know how to use their money better than the government. It’s not just balancing a budget for the sake of balancing a budget. It’s balancing a budget because right now we’re heaping debt and burden onto the next generation, and that’s not fair to them.”
But when Sean Spicer and the Republicans say "people", they really mean "very rich people" — who believe they know how to use their money better than the government — and by "government", the GOP means the rest of us (the 99%, those of us who aren't very rich.) But in one way, Sean Spicer was right: Our national debt shouldn't be a burden on the next generation (of trust fund babies). So maybe we should raise taxes on the rich — to pay off the national debt.
Mitt Romney recently told a group of conservatives he might run on a platform of helping the middle-class and attempting to eradicate poverty in America. In other "populist propaganda", Paul Ryan embraced expanding the earned-income tax credit — but this will also require a tax hike (on someone) to compensate for all the lost tax revenues — unless you were Paul Ryan and the GOP, and you wanted to starve the government of revenues (aka "Starve the Beast"). So just like Van Hollen's proposed plan to triple the tax credit for child care and expanding tax incentives for savers, that won't go anywhere either — unless revenues can be raised somewhere else (because it certainly won't come from taxing the rich.)
Republicans also reintroduced legislation to expand workers’ choice between paid overtime and "comp time", a proposal pitched by the GOP as "an assist to working families" — but it is opposed by labor unions as an attack on the 40-hour workweek.
From an interview with Robert Reich at Harvard Business Review (January 21, 2015) -- Redefining Full-Time Work, Obamacare, and Employer Benefits:
"One of the U.S. Congress’s first acts of 2015? Trying to redefine what counts as full-time work, from 30 hours a week up to 40. It’s part of the latest attempt by Republicans to alter Obama’s signature healthcare law, the Affordable Care Act, and has already passed the House of Representatives. But it has also had the perhaps unexpected effect of putting the divide between full- and part-time workers front and center in American politics ... We’re working in a very short-term world right now, and so there are many forces that are creating incentives for employers to join the camp of regarding workers as costs to be cut. Many firms don’t regard their frontline workers or low-wage workers as talent, they regard those workers as fungible costs ... The labor market also is very weak. There are millions of people who are no longer even in the labor market. They have given up looking for work, but they could come back in if demand picked up. Wages are, as a result, very low. Most of the new jobs that have been created in the United States pay less than the jobs that were lost in the great recession ... Meanwhile there is much more part-time and temporary work in the United States ... We’re seeing, with regard to a majority of workers in America, that they are moving toward a world in which they have few, if any, employer benefits. [There] are more freelancers and independent contractors, temporary workers, and part-time workers."
Also, Speaker of the House John Boehner recently reiterated his usual talking points [with accompanying translations] --- “We need to fix our broken tax code [by taxing the under-taxed rich much less, even though a study shows the Bush tax cuts did nada for the economy], balance our budget [by cutting programs for the poor, the disabled, the elderly, our Vets and the rest of the middle-class], replace the broken health care law with solutions that lower cost [giving poor health care to poor people to jack up insurance profits] and protect jobs [that were offshored overseas to low wage countries.]”
But now the Republicans are saying they'll be fighting for the poor and middle-class — after 100 years of fighting for the rich and large corporations. (Some say, "Feeding the rich to starve the poor".) But has anybody heard anything at all on Fox News about the Republican's proposed changes to raise the retirement age, defund the disability program* and privatize Social Security?
* The GOP claims there is "massive fraud" in the disability program, but two studies show there is very little fraud (0.04%), and especially when compared to other government programs.
Now, with a Republican majority in Congress (and a week after the House voted on a rule that could force a manufactured crisis in the disability program), Rep. Tom Price (R-GA) told a conservative audience at the Heritage Foundation that he wanted to tackle Social Security. As the new House Budget Committee chair, Price mentioned means-testing and increasing the eligibility age as possibilities. He also suggested that privatizing Social Security is another possibility. Price also pressed the case for a full replacement bill for Obamacare.
And we can also expect the GOP to revisit "chained-CPI" to lower the cost-of-living adjustments for those dependent on Social Security. Many Democrats, including Obama, were once ready to cave in on this to the GOP as another "compromise" during their budget talks.
But to their credit, buried on their website, Fox News did mention Senator Joni Ernst, the Tea Party darling, who hates government. The same Senator Joni Ernst (and Koch brothers puppet) who gave a response to President Obama's State of the Union address. It turns out it was she who was on the government dole. According to the L.A. Times, despite her campaign pitch that her parents "taught us to live within our means", her family collected $463,000 in federal farm subsidies.
The Republicans hate “government” — except when they are the government (like Senator Joni Ernst), and when they can benefit from the government. Most taxpayers want less "government waste, fraud and abuse" (better government); but not necessarily less government overall — not if it benefits all of us, and not just the wealthiest among us — and/or the hypocritical people in Congress who are preaching economic populist propaganda.