FacebookTwitterGoogle+RedditEmail

Owning Up to the "Ownership Society"

by MARK WEISBROT

President Bush has dubbed his agenda an “ownership society,” the idea being that every American — not just the rich — should enjoy the benefits of owning something that generates income. All too often he is taken at his word, without looking at the actual effects of his proposed — and already implemented — policy changes.

Certainly the president’s proposed changes to Social Security will do little to spread the benefits of ownership. True, his plan would allow people to divert up to 4 percent of their income from the traditional Social Security program to private accounts.

But they will not really own this money — it is actually a loan from the government, which they will individually have to pay back, with interest, after retirement. In addition, people would be forced to convert some or all of their accumulated private accounts into an annuity, or lifetime annual payment. This is not what most people think of when they hear the world “ownership.”

President Bush and his party have won a number of tax cuts in recent years that have had a considerable impact on the benefits of ownership. But these have had the effect of increasing the wealth of existing, primarily large owners of wealth — rather than aiding or helping to create new, smaller owners. Repealing the estate (or inheritance) tax certainly falls in this category. It has generated enormous tax savings for some individuals, but these include only the richest 2 percent of taxpayers.

Reducing the tax on capital gains has also benefited existing owners enormously. If Donald Trump decides to sell $20 million worth of stock today, and makes a few million dollars on the sale, he will pay only 15 percent in taxes on his profit (assuming the stock was held for more than a year). This is a much smaller bite than the Federal government takes from the average schoolteacher or firefighter, for example, when they are lucky enough to get a pay raise.

Cutting the tax on stock dividends was billed as a bonus for ordinary Americans, despite that fact that nearly half the country owns no stock at all. But even for those who do own some stock, most of us hold it in retirement accounts. When we retire, we have to pay taxes on the money we draw out. So we won’t get anything from the dividend tax cut; only the upper-income groups who buy and sell stocks outside of retirement accounts will be able to cash in on this new loophole.

Other policies pursued by the Bush Administration also benefit large owners. For example, owners of patent monopolies — principally the big pharmaceutical companies — will gain enormously from the Medicare prescription drug benefit, now expected to cost $754 billion over the next decade. Preventing the government from negotiating lower prices with these companies was a key victory for them, although it comes at great cost to consumers and taxpayers.

In short, we already have an “ownership society” — in the sense that the big owners of wealth are calling most of the shots. Wealth in this country is highly concentrated, and has become even more so in recent decades. About 5 percent of Americans own the majority of our nation’s wealth. The bottom 40 percent holds about 0.2 percent.

President Bush’s agenda continues to further this concentration of ownership, mainly by allowing more tax advantages and legal powers that enable the largest wealth holders to increase their income and wealth. As wealth becomes more concentrated in fewer hands, so too does political power. In that respect he really is promoting an “ownership society.”

MARK WEISBROT is co-director of the Center for Economic and Policy Research, in Washington, D.C. He is the author, with Dean Baker, of Social Security: the Phony Crisis. He can be reached at: weisbrot@cepr.net

 

 

 

 

 

Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. and president of Just Foreign Policy. He is also the author of  Failed: What the “Experts” Got Wrong About the Global Economy (Oxford University Press, 2015).

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

May 24, 2017
Paul Street
Beyond Neoliberal Identity Politics
Daniel Read
Powder Keg: Manchester Terror Attack Could Lead to Yet Another Resurgence in Nationalist Hate
Robert Fisk
When Peace is a Commodity: Trump in the Middle East
Kenneth Surin
The UK’s Epochal Election
Jeff Berg
Lessons From a Modern Greek Tragedy
Steve Cooper
A Concrete Agenda for Progressives
Michael McKinley
Australia-as-Concierge: the Need for a Change of Occupation
William Hawes
Where Are Your Minds? An Open Letter to Thomas de Maiziere and the CDU
Steve Early
“Corporate Free” Candidates Move Up
Fariborz Saremi
Presidential Elections in Iran and the Outcomes
Dan Bacher
The Dark Heart of California’s Water Politics
Alessandra Bajec
Never Ending Injustice for Pinar Selek
Rob Seimetz
Death By Demigod
Jesse Jackson
Venezuela Needs Helping Hand, Not a Hammer Blow 
Binoy Kampmark
Return to Realpolitik: Trump in Saudi Arabia
Vern Loomis
The NRA: the Dragon in Our Midst
May 23, 2017
John Wight
Manchester Attacks: What Price Hypocrisy?
Patrick Cockburn
A Gathering of Autocrats: Trump Puts US on Sunni Muslim Side of Bitter Sectarian War with Shias
Shamus Cooke
Can Trump Salvage His Presidency in Syria’s War?
Thomas S. Harrington
“Risk”: a Sad Comedown for Laura Poitras
Josh White
Towards the Corbyn Doctrine
Mike Whitney
Rosenstein and Mueller: the Regime Change Tag-Team
Jan Oberg
Trump in Riyadh: an Arab NATO Against Syria and Iran
Susan Babbitt
The Most Dangerous Spy You’ve Never Heard Of: Ana Belén Montes
Rannie Amiri
Al-Awamiya: City of Resistance
Dimitris Konstantakopoulos
The European Left and the Greek Tragedy
Laura Leigh
This Land is Your Land, Except If You’re a Wild Horse Advocate
Hervé Kempf
Macron, Old World President
Michael J. Sainato
Devos Takes Out Her Hatchet
L. Ali Khan
I’m a Human and I’m a Cartoon
May 22, 2017
Diana Johnstone
All Power to the Banks! The Winners-Take-All Regime of Emmanuel Macron
Robert Fisk
Hypocrisy and Condescension: Trump’s Speech to the Middle East
John Grant
Jeff Sessions, Jesus Christ and the Return of Reefer Madness
Nozomi Hayase
Trump and the Resurgence of Colonial Racism
Rev. William Alberts
The Normalizing of Authoritarianism in America
Frank Stricker
Getting Full Employment: the Fake Way and the Right Way 
Jamie Davidson
Red Terror: Anti-Corbynism and Double Standards
Binoy Kampmark
Julian Assange, Sweden, and Continuing Battles
Robert Jensen
Beyond Liberal Pieties: the Radical Challenge for Journalism
Patrick Cockburn
Trump’s Extravagant Saudi Trip Distracts from His Crisis at Home
Angie Beeman
Gig Economy or Odd Jobs: What May Seem Trendy to Privileged City Dwellers and Suburbanites is as Old as Poverty
Colin Todhunter
The Public Or The Agrochemical Industry: Who Does The European Chemicals Agency Serve?
Jerrod A. Laber
Somalia’s Worsening Drought: Blowback From US Policy
Michael J. Sainato
Police Claimed Black Man Who Died in Custody Was Faking It
Clancy Sigal
I’m a Trump Guy, So What?
FacebookTwitterGoogle+RedditEmail