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Trump’s Tax Plan And The Wealth Gap
new study released by leaving taxpayers on the the left-leaning Institute hook for $535 million in fedThe Poor Are Not Poor for Policy Studies in eral guarantees. Because the Rich Are Washington, D.C., headlines Who are these billionaires Rich what they see as shocking news on the Forbes 400 list? that in America some people are Joshua Rauh of the Stanford much wealthier than others. University School of Business and Steven Some findings of the study, entitled Kaplan of the University of Chicago Booth "Billionaire Bonanza: The Forbes 400 and School of Business studied the list. the Rest of Us," are: In 2011, 32 percent came from wealthy —"The three wealthiest people in the families, compared to United States — Bill Gates, Jeff Bezos, and 60 percent in 1982. Warren Buffett — now own more wealth And in 2011, 69 perthan the entire bottom half of the American cent started their own population." businesses compared —The 400 billionaires on the Forbes to 40 percent in 1982. 400 list "now own more wealth than the So these are increasbottom 64 percent of the American popula- ingly individuals who tion." created their own —"One in five US households...have wealth. Star Parker zero or negative net worth. Over 30 percent And the fact is, the of black households and 27 percent of wealthy already pay the lion's share of the Latino households have zero or negative nation's taxes, and this has increased over net worth." time. The message that IPS wishes to convey According to the Tax Foundation, in here is that there's a connection between 2014, those whose incomes were in the top wealth at the top and dismal economic cir- 1 percent paid 39.5 percent of all taxes. In cumstances at the bottom. That is, the poor 1982, the top 1 percent paid 19 percent of are poor because the rich are rich. all taxes. Raising taxes more on the highest Their proposed solution for narrowing income earners will benefit tax lawyers and the gap between rich and poor follows this lobbyists and do little for the rest of us. premise. The way to make the poor less Envy doesn't create wealth. Freedom poor, in their view, is to make the rich less and character does. How about we focus rich. And, of course, they propose to do this less on punishing those who succeed and with government power. "By taxing our more on helping those who are not realizwealthiest, we could raise significant rev- ing their potential? enues and then invest these funds to Harvard economist Martin Feldstein expand wealth-building opportunities estimates that cutting corporates taxes across the economy." would raise national income by $500 billion If we accept the questionable assump- — $3,500 per household. I say we cut them tion that higher taxes on the wealthy would even more for businesses opening in disraise "significant revenues," who exactly, tressed communities. according to their plan, would invest these Let's admit that our massive welfare funds to produce all these new opportuni- state has been a disaster. I have long been ties? for allowing low-income Americans to stop Those with the greatest investment paying the payroll tax and instead use skills are those on the Forbes 400 list, who these funds to invest in a personal retirethe IPS sees as the problem and who they ment account to build personal wealth. want to punish for being successful. These are just starters. We should be So in all likelihood it's a government looking for ideas to bring up the bottom. bureaucrat that they want to put in charge Not dragging down the top. of making these brilliant "wealth-building" Star Parker is an author and president of investments. CURE, Center for Urban Renewal and But bureaucrats would not be bureau- Education. Contact crats if they knew how to invest and create heratwww.urbancure.org. To find out more wealth. We've been through this before — about Star Parker and read features by the list of failed government projects is other Creators Syndicate writers and carlong. Recall most recently the Solyndra toonists, visit the Creators Syndicate webscandal — the failed solar panel firm site at www.creators.com. backed by the Obama administration —
Headlines From Africa
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A look at current news from the continent of Africa Namibia: Namibia has gotten the ball rolling on plans to scrap visa requirements for African passport holders after Cabinet authorized the implementation of this process - to be carried out in line with diplomatic procedures. Namibia will soon start issuing African passport holders with visas on arrival at ports of entry as a first step towards the eventual abolition of all visa requirements for all Africans. Nigeria: The Borno State government has said it will convert the house of the former leader of Boko Haram sect, Mohammed Yusuf, to a museum. According to Bulama, the museum would help to archive all things related to Boko Haram insurgency to attract tourists and for the benefits of future generation. Sierra Leone: Residents of Kalitown community in outskirt of Freetown over the weekend met with the sole female presidential candidate of the Unity Party, Madam Femi Claudius-Cole, and pledged their support to her ahead of the 2018 elections. Tanzania: President John Magufuli has ordered the demolition of Tanesco's, the Tanzanian State Power Firm's headquarters in Dar es Salaam to pave the way for road construction. The Tanzania National Roads Agency says it has marked an X on the state-owned electric supply firm's building - but local newspaper The Citizen says there is no such mark on the ten-story building. Zambia: Over 500 Rainbow Party members have joined the ruling Patriotic citing leadership failure by founder Wynter Kabimba. Majority of the defectors are those that ditched the Patriotic Front for Rainbow and had now rejoined. Leading the defectors was former Rainbow Party chairperson for elections Victor Kalesha who said the group had decided to join the ruling party because of good policies that have been introduced. Zimbabwe: The Zimbabwe Defense Forces (ZDF) and the Zimbabwe Republic Police (ZRP) will with immediate effect conduct joint patrols aimed at maintaining and preserving peace in the country. Addressing joint press statement in the capital, Senior Assistant Commissioner Charity Charamba said the ZRP and ZDF have resumed joint patrols to maintain law and order adding that the situation in the country has returned to
L.A. Focus/December 2017
Angola: The Angolan Government will soon set up integrated centers to address cases of domestic violence announced the minister of Social Action, Family and Women Promotion, Victória da Conceição. The minister did not say when the centers will be opened, but she did say the centers will seek to respond to the domestic violence victims' concerns, with the help of people specializing in counseling and psychological assistance. Cameroon: In Cameroon, opposition lawmakers disrupted parliament for a second day in a row as tensions deepen over the government’s handling of the crisis in the country’s anglophone regions. Lawmakers of Cameroon’s main opposition party, the Social Democratic Front demand parliament hold debates on how to resolve the year-long strike in the two Englishspeaking regions. Many schools in the southwest and northwest remain shut and a strike has closed down many businesses. French-speakers are the majority in the bilingual country, and anglophone activists say they are marginalize. Congo: More than 800 people have been killed as a result of a cholera epidemic linked to escalating conflict in the Democratic Republic of Congo (DRC). The deaths of the 882 victims have been recorded from over 44 000 outbreaks since the beginning of the year. Authorities said while the cholera epidemic has been on a downward trend, however, a relatively large increase in the number of cases has been observed in the Kasai and Lomani provinces. Ethiopia: Executive Directors of the African Development Bank Group have approved a loan and a grant amounting to US$ 97.79m for the rehabilitation of power systems in Ethiopia. The US$83.64m loan and US$14.15m grant from the African Development Fund (ADF), the concessional window of the AfDB Group will be used to finance the rehabilitation and upgrading of power transmission and distribution Systems in the capital, Addis Ababa. Liberia: The National Museum of Liberia is restored and now open to the public, reversing the effect of many years of destruction and neglect. It is housed in one of Monrovia's oldest buildings, erected in 1843, four years before Liberia's Declaration of Independence.
he majority of black three years — let that sink and Latino voters did- Trump’s tax plan would in for a moment. n’t pull the lever for Looking a bit further into widen racial wealth Donald Trump last the future, black families are gap November. He is, however, the projected to own no wealth president — and thus has the power to at all by 2053. By that point, our country leave a lasting effect on the trajectory of will be majority non-white, but whites and their lives. non-whites will be farther apart than ever. Trump recently made headlines for But that’s assuming nothing changes. making significant reversals in policy posi- If Trump moves forward with the policies tions on issues ranging he campaigned on, especially his tax from immigration to “reform” plan, the gap surely grows. the national debt ceilTrump’s tax plan is heavily skewed ing. Perhaps he could toward providing massive tax breaks for change his tune on the ultra-wealthy. Half of the proposed how he addresses the cuts will go to millionaires, according to growing racial wealth the Institute on Taxation and Economic divide as well. Policy. Less than 5 percent go to families Will the already deep with household incomes below $45,000. racial wealth divide Perhaps more insidious is Trump’s Josh Hoxie grow wider under plan to eliminate the federal estate tax, Trump, or can we begin to close it? also known as the inheritance tax. This Just released figures from the Census levy applies exclusively to the wealthiest Bureau show that black and Latino fami- 0.2 percent of households and is intended lies saw a slight uptick in their household to curtail the growing concentration of income last year. They still lagged far wealth in families like, say, the Trumps. behind their white families — with median Fortunately, the president has other households earning more than $10,000 options. He could choose to expand, rather less than their white counterparts — but than abolish, the estate tax. the racial income gap did get a bit smaller He could also address the deep disparover the very short term. ities in homeownership — and particularUnfortunately, the long-term trends ly in the mortgage interest deduction in go in the other direction. the tax code, which benefits the wealthy A just released report I co-authored and those who already own a house. titled “The Road to Zero Wealth” looks at Thanks to generations of discrimination in trends in household wealth, which housing and credit, black families trail includes the total sum of a families’ assets whites in homeownership by a margin of minus their debts. And wealth, not The median black family income, is the better measure of long-term financial stability. today has just $1,700 in The median black family today has wealth, with Latino families just $1,700 in wealth, with Latino families not far ahead at just $2,000. White faminot far ahead at just $2,000. White families, meanwhile, own more than $100,000. lies, meanwhile, own more than That gap is staggering. $100,000. That gap is staggering. And it’s getting worse. The report looks at racial wealth data over the past 30 years to project what we over 30 percent. can expect in the future if current trends Unfortunately, it’s unlikely Trump continue. By 2020, the end of Trump’s first changes course. While the president is term, median black and Latino households nothing if not mercurial, his commitment stand to lose nearly 18 percent and 12 per- to protecting the wealth of the already cent of the wealth they held in 2013, wealthy has remained steadfast. respectively. That the vast majority of the nation’s Median white household wealth, on wealth is, and always has been, held in the other hand, looks set to increase 3 per- predominantly white hands at the expense cent. of non-whites hasn’t concerned him. At that point, white households will Perhaps, however, he’ll change his mind. own 85 times more wealth than black Josh Hoxie directs the Project on Taxation households, and 68 times more wealth and Opportunity at the Institute for Policy than Latino households. That’s in just Studies.
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