Economic Disparities
We have much higher poverty rates than other advanced industrialized countries. At the same time, we have a much lower level of income support for poor families than Western European countries or Canada. Social policies in Europe, Canada and Japan do a lot more to reduce economic disparities created by the marketplace than our country.
Our tax structure should be modeled after the Swiss system, which is a fair system of progressive taxation. In the United States, the first $250,000 of wealth could be exempt from the tax, which would exclude 80 percent of all families. The tax would increase at increments, starting out at .2 percent from about $250,000 to $500,000. The rate would go up to .4 percent from $500,000 to $1 million, then increase to .6 percent from a $1 million to $5 million, and thereafter to .8 percent.
It would not be a burdensome tax, but it could raise about $60 billion annually. Eighty percent of families would pay nothing and 95 percent of families would pay less than $1,000. It would really only affect very rich families.
We could provide a much broader safety net in this country, by strengthen our income support system. The Earned Income Tax Credit is presently a fairly substantial aid to poor families. It should be improved and expanded.
The minimum wage has fallen by about 35 percent in real terms since its peak in 1968. Restoring the minimum wage to where it used to be, would help a lot of low income families.
Our unemployment insurance system is much less generous than other industrialized countries and can certainly be shored up. Unemployment insurance is in a mess, because only about one third of unemployed persons actually get unemployment benefits, because they either don't qualify or because they exhaust their benefits after six months. Typically the replacement rate is about 35 or 40 percent. In the Netherlands, the replacement rate is 80 percent.
Our welfare system provides very restrictive coverage and is in a state of disrepair. Real welfare payments declined by about 50 percent between 1975 and 1996.
The principle of less government is aimed at protecting people’s wealth rather than spreading it more equitably.
Our tax structure should be modeled after the Swiss system, which is a fair system of progressive taxation. In the United States, the first $250,000 of wealth could be exempt from the tax, which would exclude 80 percent of all families. The tax would increase at increments, starting out at .2 percent from about $250,000 to $500,000. The rate would go up to .4 percent from $500,000 to $1 million, then increase to .6 percent from a $1 million to $5 million, and thereafter to .8 percent.
It would not be a burdensome tax, but it could raise about $60 billion annually. Eighty percent of families would pay nothing and 95 percent of families would pay less than $1,000. It would really only affect very rich families.
We could provide a much broader safety net in this country, by strengthen our income support system. The Earned Income Tax Credit is presently a fairly substantial aid to poor families. It should be improved and expanded.
The minimum wage has fallen by about 35 percent in real terms since its peak in 1968. Restoring the minimum wage to where it used to be, would help a lot of low income families.
Our unemployment insurance system is much less generous than other industrialized countries and can certainly be shored up. Unemployment insurance is in a mess, because only about one third of unemployed persons actually get unemployment benefits, because they either don't qualify or because they exhaust their benefits after six months. Typically the replacement rate is about 35 or 40 percent. In the Netherlands, the replacement rate is 80 percent.
Our welfare system provides very restrictive coverage and is in a state of disrepair. Real welfare payments declined by about 50 percent between 1975 and 1996.
The principle of less government is aimed at protecting people’s wealth rather than spreading it more equitably.
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