Revealed: how the wealth gap holds back economic growth

OECD report rejects trickle-down economics, noting ‘sizeable and statistically negative impact’ of income inequality

By , economic editor, The Guardian

The west’s leading economic thinktank on Tuesday dismissed the concept of trickle-down economics as it found that the UK economy would have been more than 20% bigger had the gap between rich and poor not widened since the 1980s.

Publishing its first clear evidence of the strong link between inequality and growth, the Paris-based Organisation for Economic Cooperation and Development proposed higher taxes on the rich and policies aimed at improving the lot of the bottom 40% of the population, identified by Ed Miliband as the “squeezed middle”.

Trickle-down economics was a central policy for Margaret Thatcher and Ronald Reagan in the 1980s, with the Conservatives in the UK and the Republicans in the US confident that all groups would benefit from policies designed to weaken trade unions and encourage wealth creation.

The OECD said that the richest 10% of the population now earned 9.5 times the income of the poorest 10%, up from seven times in the 1980s. However, the result had been slower, not faster, growth.

It concluded that “income inequality has a sizeable and statistically negative impact on growth, and that redistributive policies achieving greater equality in disposable income has no adverse growth consequences.

“Moreover, it [the data collected from the thinktank’s 34 rich country members] suggests it is inequality at the bottom of the distribution that hampers growth.”

According to the OECD, rising inequality in the two decades after 1985 shaved nine percentage points off UK growth between 1990 and 2000. The economy expanded by 40% during the 1990s and 2000s but would have grown by almost 50% had inequality not risen. Reducing income inequality in Britain to the level of France would increase growth by nearly 0.3 percentage points over a 25-year period, with a cumulated gain in GDP at the end of the period in excess of 7%.

“These findings have relevant implications for policymakers concerned about slow growth and rising inequality,” the paper said.

Read more ⇒ the guardian
See more ⇒ http://www.theguardian.com/business/2014/dec/09/revealed-wealth-gap-oecd-report

The Corporate Coup

The Corporate Coup d’Etat is Nearly Complete

The Republicans now control the major media, the Supreme Court, the Congress and soon the presidency.

Think Jeb Bush in 2016.

All throughout America, right down to the local level, buried in a tsunami of cash and corruption, our public servants are being morphed into corporate operatives.

Our electoral apparatus is thoroughly compromised by oceans of dirty money, Jim Crow registration traps, rigged electronic voting machines, gerrymandering, corrupt secretaries of state.

The internet may be next.  Above all, if there is one thing that could save us a shred of democracy, it’s preserving net neutrality.  This fight could in fact outweigh all the others, and may be decided soon.  Whatever depression you may now feel, shake it off to wage this battle.  If we now lose the ability to freely communicate, we are in the deepest hole of all.

The roots of this corporate coup reach where they always do when empires collapse—useless, cancerous, debilitating, endless imperial war.

Read more ⇒ Common Dream
Learn more ⇒ http://www.commondreams.org/views/2014/11/05/corporate-coup-detat-nearly-complete

Why pay Taxes

March Madness: The 5th Straight Year of Extreme Corporate Tax Avoidance

by Paul Buchheit

The brackets are set for the big dance — the dance around tax responsibility. Most of the teams are in the bottom bracket. In this league, the lowest score wins.

Outside the stadium our nation’s kids and seniors and low-income mothers may be dealing with food and housing cuts, but on the corporate playing floor new low-tax records are being set again this year. Just as this is a golden age for sports, this is also, as noted by the New York Times, “a golden age for corporate profits.”

Corporations have simply stopped paying their taxes, perhaps using the 2008 recession as an excuse to plead hardship, but then never restoring their tax obligations when business got better. The facts are indisputable. For over 20 years, from 1987 to 2008, corporations paid an average of 22.5% in federal taxes. Since the recession, this has dropped to 10% — even though their profits have doubled in less than ten years.

Pay Up Now just completed a compilation of corporate tax payments over the past five years, using SEC data as reported by the companies themselves. The firms chosen are top-earners who have filed 10-K reports through 2012. Their US Tax figures represent the five-year total of “current” payments.

The 64 corporate teams paid just over 8% in taxes over the five-year period.

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