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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: geode00 who wrote (94246)	1/8/2007 2:16:18 AM
From: stockman_scott	Respond to of 361560

Working Harder for the Man ______________________________________________________________ By BOB HERBERT Op-Ed Columnist The New York Times January 8, 2007 Robert L. Nardelli, the chairman and chief executive of Home Depot, began the new year with a pink slip and a golden parachute. The company handed him a breathtaking $210 million to take a hike. What would he have been worth if he’d done a good job? Data recently compiled by the Center for Labor Market Studies at Northeastern University in Boston offers a startling look at just how out of whack executive compensation has become. Some of the Wall Street Christmas bonuses last month were fabulous enough to resurrect an adult’s belief in Santa Claus. Morgan Stanley’s John Mack got stock and options worth in excess of $40 million. Lloyd Blankfein at Goldman Sachs did even better — $53.4 million. According to the center’s director, Andrew Sum, the top five Wall Street firms (Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley) were expected to award an estimated $36 billion to $44 billion worth of bonuses to their 173,000 employees, an average of between $208,000 and $254,000, “with the bulk of the gains accruing to the top 1,000 or so highest-paid managers.” Now consider what’s been happening to the bulk of the American population, the ordinary men and women who have to work for a living somewhere below the stratosphere of the top corporate executives. Between 2000 and 2006, labor productivity in the nonfarm sector of the economy rose by an impressive 18 percent. But workers were not paid for that impressive effort. During that period, according to Mr. Sum, the inflation-adjusted weekly wages of workers increased by just 1 percent. That’s $3.20 a week. As Mr. Sum wryly observed, that won’t even buy you a six-pack of Bud Light. Joe Six-Pack has been downsized. Three bucks ain’t what it used to be. There are 93 million production and nonsupervisory workers (exclusive of farmworkers) in the U.S. Their combined real annual earnings from 2000 to 2006 rose by $15.4 billion, which is less than half of the combined bonuses awarded by the five Wall Street firms for just one year. “Just these bonuses — for one year — overwhelmingly exceed all the pay increases received by these workers over the entire six-year period,” said Mr. Sum. In a development described by Mr. Sum as “quite stark and rather bleak for the economic well-being of the average worker,” the once strong link between productivity gains and real wage increases has been severed. The mystery to me is why workers aren’t more scandalized. If your productivity increases by 18 percent and your pay goes up by 1 percent, you’ve been dealt a hand full of jokers in a game in which jokers aren’t wild. Workers have received some modest increases in benefits over the past six years, but most of the money from their productivity gains — by far, it’s not even a close call — has gone into profits and the salaries of top executives. Fairness plays no role in this system. The corporate elite control it, and they have turned it to their ends. Mr. Sum, a longtime expert on the economic life of the American worker, said he is astonished at the degree to which ordinary workers have been shortchanged over the past several years. “Productivity has been exceptional,” he said. “And for most of my life, the way to get wages up was to be more productive. That’s how our economy was supposed to work.” The productivity gains in the go-go decades that followed World War II were broadly shared, and the result was a dramatic, sustained increase in the quality of life for most Americans. Nowadays workers have to be more productive just to maintain their economic status quo. Productivity gains are no longer broadly shared. They’re barely shared at all. The pervasive unfairness in the way the great wealth of the United States is distributed should be seen for what it is, an insidious disease eating away at the structure of the society and undermining its future. The middle class is hurting, propped up by the wobbly crutches of personal debt. The safety net, not just for the poor, but for the middle class as well, is disappearing. The savings rate has dropped to below zero, and more Americans are filing for bankruptcy than for divorce. Your pension? Don’t ask. There’s a reason why the power elite get bent out of shape at the merest mention of a class conflict in the U.S. The fear is that the cringing majority that has taken it on the chin for so long will wise up and begin to fight back.

To: geode00 who wrote (94246)	1/8/2007 7:20:03 PM
From: stockman_scott	Read Replies (1) \| Respond to of 361560

The voters already knew this last fall: Bush Tax Cuts Offer Most for Very Rich, Study Finds nytimes.com January 8, 2007 By EDMUND L. ANDREWS WASHINGTON — Families earning more than $1 million a year saw their federal tax rates drop more sharply than any group in the country as a result of President Bush’s tax cuts, according to a new Congressional study. The study, by the nonpartisan Congressional Budget Office, also shows that tax rates for middle-income earners edged up in 2004, the most recent year for which data was available, while rates for people at the very top continued to decline. Based on an exhaustive analysis of tax records and census data, the study reinforced the sense that while Mr. Bush’s tax cuts reduced rates for people at every income level, they offered the biggest benefits by far to people at the very top — especially the top 1 percent of income earners. Though tax cuts for the rich were bigger than those for other groups, the wealthiest families paid a bigger share of total taxes. That is because their incomes have climbed far more rapidly, and the gap between rich and poor has widened in the last several years. The study offers ammunition to supporters and opponents of Mr. Bush’s tax cuts, which are all but certain to touch off a battle between the president and the Democrats who just took control of Congress. Democratic leaders have taken pains to avoid an immediate fight over the tax cuts, most of which are scheduled to expire at the end of 2010. But Democrats are looking for ways to increase revenue well before then, in part because they want to spend more on education and energy without increasing the deficit. Economists and tax analysts have long known that the biggest dollar value of Mr. Bush’s tax cuts goes to people at the very top income levels. One reason is that two of his signature measures, tax cuts on investment income and a steady reduction of estate taxes, overwhelmingly benefit the wealthiest households. But the Congressional study offers additional insight because it incorporates information about what people paid in 2004, the first year in which taxpayers could take full advantage of the cuts on stock dividends and capital gains. The study estimates that the effective federal income tax rate, which excludes payroll taxes for Social Security and Medicare, declined modestly for people in the middle- and lower-income categories. Families in the middle fifth of annual earnings, who had average incomes of $56,200 in 2004, saw their average effective tax rate edge down to 2.9 percent in 2004 from 5 percent in 2000. That translated to an average tax cut of $1,180 per household, but the tax rate actually increased slightly from 2003. Tax cuts were much deeper, and affected far more money, for families in the highest income categories. Households in the top 1 percent of earnings, which had an average income of $1.25 million, saw their effective individual tax rates drop to 19.6 percent in 2004 from 24.2 percent in 2000. The rate cut was twice as deep as for middle-income families, and it translated to an average tax cut of almost $58,000. In its report, the Congressional Budget Office estimated that the overall effective federal tax rate edged up to 20 percent in 2004, from 19.8 percent the year before. But even with that increase, Americans faced lower tax rates than any time since 1979. If President Bush has his way, those rates could decline even more as the estate tax on inherited wealth is gradually phased out by the start of 2010. Mr. Bush and his Republican allies in Congress want to permanently extend that tax cut and almost all of the others that Congress passed in his first term. The cost of doing that would be more than $1 trillion over the next decade, a cost that would hit the Treasury at the same time that the spending on old-age benefits for retiring baby boomers begins to soar. The budget office offered little commentary on its new estimates, but many of its numbers spoke for themselves. The report shows that a comparatively small number of very wealthy households account for a very big share of total tax payments, and their share increased in the first four years after Mr. Bush’s tax cuts. The top 1 percent of income earners paid about 36.7 percent of federal income taxes and 25.3 percent of all federal taxes in 2004. The top 20 percent of income earners paid 67.1 percent of all federal taxes, up from 66.1 percent in 2000, according to the budget office. By contrast, families in the bottom 40 percent of income earners, those with incomes below $36,300, typically paid no federal income tax and received money back from the government. That so-called negative income tax stemmed mainly from the earned-income tax credit, a program that benefits low-income parents who are employed. Put another way: rich families were the undisputed winners from President Bush’s tax cuts, but people in the bottom half of the earnings scale were not paying much in taxes anyway.