Posted by: coastcontact | January 30, 2015

America’s Peasants

The working masses of America don’t think of themselves as peasants. Oh no, wisely America’s wealthy came up with a much more palatable description. They are part of the middle class.  Everyone is part of the middle class.  I know wealthy people who tell me they are part of the middle class. The wealthy in Bel-Aire and Calabasas call themselves upper middle class. It seems that the middle class is everyone.

So explain the following to me.

Sixteen million children were on food stamps as of the end of last year, the highest number since the nation’s economy tumbled in 2008. That is 1 in 5 of all children in America. 46.5 million people in the United States are on food stamps. That means more than 14% of our 320 million people are too poor to afford food. These fact are reported by the Associated Press.

A new study released by Morgan Stanley revealed income inequality ranked fourth among concerns of the high-net-worth individuals nationally, behind the 86% citing increasing foreign conflicts, the 81% pointing to fears of terrorism in the U.S., and the 80% noting the U.S. government budget deficit.

The same Morgan Stanley study indicated that those with $100,000 or more to invest made up 21% of U.S. households. In other words 79% of all American households have less than $100,000 to put in a bank or invest in stocks and bonds. That translates into millions of retired people who live almost totally on Social Security and millions of younger people wondering what their retirement will look like.

Can those families with college age children send their children to college? The answer is obvious. Children must qualify for a student loan or their education comes to an end. California’s famous community colleges now cost $46 per unit or $736 per semester. I recall when those schools were free to every high school graduate.

Another part of this story is the wealthy who earn millions of dollars a year and pay the lowest tax rate with thousands of dollars earned that are not taxed at all. One example is tax free municipal bonds. If you own $1 million of those bonds the interest earned is not taxed. If you decide to sells those bonds to earn a profit after owning them for more than one year, your profits will be taxed at 15%. Since 2003, certain dividends known as qualified dividends (Qualified dividends are generally dividends from shares in domestic corporations) have been subject to the same tax rates as long-term capital gains, which are currently taxed at 15%.

In other words if I work for a living, 40 hours a week every week of the year and earn $50,000 a year my joint income tax is about $4,700. However if I am lucky enough to earn my $50,000 in municipal bond interest my income tax is NOTHING.

The problem for the middle class who work for a living is that there is no one who speaks for them in Washington. Oh, the Democrats claim they do but that is a lie. They had control of both the House and the Senate for the first two years of the Obama administration and no relief or help was provided. Meanwhile the wealthy who say they are concerned with income inequality have happily accepted the ever growing divide between the rich and poor. Corporate managers now earn 200 to 300 times the income of the rest of us.

The middle class? What middle class is there? It’s primarily older people who managed to save for their retirement. One day there will be an uprising by the masses who will finally recognize that they are the victims of a system that milks them. It won’t come too soon for me.

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