Thursday, October 22, 2015
THE ENDEMIC US CONSUMPTION TAX TARGETING THE HOUSEHOLD SECTOR
The chart above is usually interpreted as illustrative of the gap between US worker productivity and US worker compensation.
Another way of interpreting this chart is as the illustration of a massively regressive US Tax transferring wealth directly from the middle class to the top 1 percent.
How is that?
The gap the between the productivity and the compensation of US labor is exactly equal to a targeted CONSUMPTION TAX on the US household sector.
How is this a consumption tax? Because as workers a forced to retain a declining share of what they produce - which is all that is meant when productivity growth outstrips wage growth - then the workers - who are synonymous with the Household Sector - have been stripped of their means of consumption - which is all that is meant by disposable income.
The fact that this Consumption Tax is imposed through Policy that favors The State and Corporations over the Household sector rather than by Tax Law is completely irrelevant. Especially to the Household sector - the Workers - that comprise the vast middle class.
The fact that this trend has been going on for over 40 years proves that this Policy is both real and entrenched.
How does this benefit the 1 percent? The ncreased output translates directly into Increased Dispoable Income for the employers of the Household Sector - which is to say The US Government and US Corporations.
But, unfortunately that's not the end of the sad story of the US war on the Middle Class.
QUANTITATIVE EASING IS A REGRESSIVE TAX ON HOUSEHOLD SECTOR SAVINGS