econintersect .com

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 26 January 2018

Treating The 99% Like Dogs: The "Crumb Theory"

by Rodger Malcolm Mitchell,

It takes only two things to keep people in chains:

The ignorance of the oppressed and the treachery of their leaders.

Please share this article - Go to very top of page, right hand side, for social media buttons.

The GOP's new tax law rewards the 1% mightily, and to appease the voting 99%, it includes a few crumbs for the rest. It's the "crumb theory" at work

If you are a mean-spirited sadist, you can chain, beat and starve a dog all day, but if in the dog's final hour, you feed him a few tasty crumbs, he will lick your face in appreciation.

People are much the same.

After decades of chastising the idle, Republicans pushed through a tax bill that specifically advantages rich people who don't work. But they aren't applying that standard for poor people.

Republicans also plan to make it easier for states to add work requirements for welfare recipients.

The Senate tax bill gives business owners nearly three times more benefits than workers with wages and salaries, according to a new analysis from the nonpartisan Tax Policy Center.

Adam Looney, a senior fellow at the Brookings Institution, told The New York Times that it will be the first time that "wage earners are substantially penalized" by the tax code.

The diverging treatment comes from how the tax bill treats the businesses that are structured so that profits are taxed as individual income. Republicans portray these businesses, which are known as "pass-throughs," as "ma and pa bakeries and family-owned salons."

In reality, most pass-through income goes to people in the top 1 percent - including the Trump family.

Pass-through owners only automatically pay the 25 percent rate when someone else runs their business. In other words, the wealthiest Americans are rewarded for not working.

The most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Image result for begging dog

So you might expect the voting 99% to object when the GOP pushes them further down the income scale.

But then we meet the "crumb theory" - Give the beggers a crumb and they will lick your face in appreciation.

Consider this squib:

Corporate American workers continue to reap the benefits stemming from a recent corporate tax cut.

Disney, American Airlines, Boeing, AT&T, Wells Fargo, Comcast, Bank of America and Walmart are just some of the companies that have announced one-off payments to employees late last year and early this year, while dozens of other firms have followed suit.

Apple recently said it will give $2,500 worth of restricted stock units to most of its employees. But why give bonuses rather than simply salary raises?

The Washington Post explains that salary bumps drive up fixed costs for companies; how workers are compensated is also changing, with discretionary bonuses becoming an increasing share of compensation.

Get it? "Reap the benefits" is happy-talk for "accept a few crumbs."

To mollify any negative feelings you may have, about the 1% amassing endless billions from the new, lower tax rates, some of you will be given small, one-time bonuses.

And there will be other crumbs.

Click for larger image.

In the two right-hand columns, you will see the tax savings for each income level. If you earn up to $30,000, you'll save virtually nothing. You may even pay more. At $30,000, the savings begin, but the crumbs truly are small.

A person making $1 million a year receives annual tax savings of 1.5% or $15,000. But if you make $50,000 a year, your tax rate will be reduced by only 1% or about $500 on average - a crumb to keep you quiet.

While some may justify the rich receiving a higher tax saving because they pay more taxes, there simply is no justification for the rich receiving a higher percentage tax saving. Yet you are expected to thank the GOP for giving you the crumbs.

But the crumb theory doesn't end there. What little the GOP gives with one hand, it more than takes back with the other.

The exists a block grant called Temporary Assistance for Needy Families (TANF). But the number of poor people receiving federal cash assistance has plummeted, along with the monthly benefits.

The budget for the program has remained unchanged at $16 billion since 1996; inflation has reduced its actual value by a third since then.

And then there's this article from the 1/24/18 issue of the Chicago Tribune:

Is a Medicaid work requirement fair?

Earlier this month, Kentucky made Medicaid history: It will now require some of its Medicaid recipients to work or risk losing benefits.

Critics say this 20-hours-per-week rule is a draconian plan to toss people off the rolls.

Kentucky's plan is flexible: Recipients could meet the requirement through volunteer work, job training, searching for a job, taking classes, or caring for someone elderly or disabled. Pregnant women, full-time students, the medically frail, the homeless and people who aren't healthy enough to work will be exempt.

About a dozen other states, including Indiana, New Hampshire, Wisconsin and Maine, have submitted similar proposals to the federal government.

Imposing a work requirement wouldn't knock the neediest off the rolls. But it could prompt many to get jobs - and thus health coverage via employers.

The work requirement is based on the fiction that the poor are congenitally lazy, and unless forced to labor, they will just loll about in their miserable hovels, waiting to receive crumbs from the federal government.

Therefore they cannot be allowed to receive free money. They must labor for the rich or be punished.

The rich, by contrast, are felt to be entitled to loll about in luxury, supported by the government, because . . . . well, because they're rich.

And while we're on the subject of the GOP giving crumbs with one hand, while punishing with the other:

Ryan says Republicans to target welfare, Medicare, Medicaid spending in 2018

House Speaker Paul D. Ryan (R-Wis.) said Wednesday that congressional Republicans will aim next year to reduce spending on both federal health care and anti-poverty programs, citing the need to reduce America's deficit.

"We're going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit," Ryan said. "Frankly, it's the healthcare entitlements that are the big drivers of our debt, so we spend more time on the health care entitlements - because that's really where the problem lies, fiscally speaking."

Ignore, for a moment, the fact that the so-called federal "debt" isn't really a "debt" and never will be a burden on the federal government or on taxpayers. Ignore, for a moment, that federal deficit spending grows the economy, and benefits everyone, even the rich.

Instead, focus on this reality: After forcing through a tax law that adds $1.5 trillion to the debt, and also massively increased military spending, and demanding billions more to finish a useless border wall, the GOP now has "discovered" that Medicare and Social Security, which primarily benefit the 99%, need to be reduced.

So they will try to cut these valuable programs that aid the 99% and cost the 1% nothing, though these programs do help narrow the Gap between the rich and the rest - something the rich do not want.

In summary, the GOP believes that you can mistreat the 99% "dogs," but if you toss them a few crumbs, they will lick your face in the elections.

Is the 99% really that stupid? We'll know this year.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Opinion Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.

Econintersect Opinion

Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

 navigate econintersect .com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2018 Econintersect LLC - all rights reserved