Pressures on the System Threaten the Wealthy's Income Stream

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ROBERT REICH WEARS many hats. He is a professor of Public Policy at UC Berkeley. He brought his economic expertise to Republican Gerald Ford and Democrat Jimmy Carter's administrations. As Secretary of Labor during Bill Clinton's first stint in the White House, Reich oversaw an increase in the minimum wage and was an outspoken advocate of everyday Americans.

Reich is the focal point of the 2013 documentary 'Inequality For All.' His central assertion in the film is that while inequality drives the free market, severe wealth inequality makes the market stagnant. When the gap between the haves and have-nots is such that the bottom 47% of Americans have no wealth (and likely have significant debt), and 400 billionaires at the top have capital comparable to 80 million families, everyone loses out.

While I felt aligned with Reich's agenda from the beginning of the film, I did wonder how he would substantiate the claim that massive wealth inequality is bad for the very rich. I hoped that his rationale would go beyond some sort of moral-ethical dilemma of the one-percenters. As the film progressed, I got the quantitative documentation I was looking for.

During 'Inequality,' we follow a number of people, some billionaires, some struggling to keep enough food on the table for a family of four. The most telling interview came from the successful, thoughtful billionaire named Nick Hanauer. When asked about his yearly salary, he responds "anywhere from 10 million to 30 million." He acknowledges this is an absurd amount of money for one person to collect.

Hanauer describes how the gulf between ordinary Americans and a small circle of billionaires is actually bad for his business, and for the free market in general. As it turns out, billionaires only need a few pairs of blue jeans a year; they only purchase one or two pillows when necessary.

According to Hanauer, if his money was more evenly allocated throughout working class Americans, more consumers would be able to afford a new pair of jeans, and he would move more pillows. Sales would increase. Despite incredible capital and his position on the top of the economic ladder, Hanauer's bank account is hurt by inequality. The wealth disparity limits the free market system and each agent, rich or poor.

The documentary is not short on ways to address the widening wealth gap in the United States. Each facet of Reich's plan is rooted in years of economic research, not in dogma or partisan ideology. Some suggestions are a no-brainer. Decades ago, Japan showed the world that investing in education can be profitable for everyone. As Japan developed, officials prioritized training the workforce and made trade schooling widely available. Now, Japan is one of the wealthiest countries in the world.

Other calls for action are a thorough reform of Wall Street, more equitable tax policies, and greater oversight in the power of amassed wealth in the political system. Whether campaign contributions come from a multi-millionaire or a multi-national corporation, a small number of oligarchs are assuming the arms of democracy and monopolizing the ears of politicians, as per the Supreme Court decision in Citizens United.

While the challenge is great, Reich wants his viewers to feel empowered. Empowered to demand change, to refashion 'equality' from a buzzword to a basic requisite of the American way, to make sure that every person's voice is heard in their political system, regardless of the number of zeros and commas in his or her paycheck.

Follow Michael on Twitter Twitter: @nahmias_report Contributing Editor: @MAndrewRansom

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I.R.S. To Tax Rape Victims?

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Patrice Ellerbe, Staff WriterLast Modified: 21:44 p.m. DST, 11 January 2014

Woman Holding Head in Hands Covered in U.S. Money, Photo by Image CollectionWASHINGTON, DC - Sexual assaults are something no woman, or man, ever wants to speak about. To have the privacy of your body snatched from you and exposed to someone who has no right, is already a traumatic situation itself; but having to plead your case to someone like your state representative or tax collector is absurd!

This past Thursday, 9 January 2014, the U.S. congressional committee will either rule out or pass Rep. Chris Smith’s anti-choice bill. According to NARAL Pro-Choice America, the bill would force sexual-assault survivors who hold access to abortion care, to prove the assault actually happened. Reports would be made to the IRS, as if the plead to the local police department isn’t enough.

During the 2012 Presidential election, Republicans across the board took some pretty antiquated and in some cases, ridiculous stances on rape and women’s reproductive rights. One of the most egregious offenders was Republican Congressman Todd Akin who stated in August 2012 stated a position that is widely held by conservative Americans but rarely voiced. The belief that a woman cannot get pregnant through rape, with a subtext that is much more revealing because it implies that if a woman is raped and gets pregnant then she must have wanted it and is only afterwards crying foul.

Now, a panel of 12 men on the House Judiciary Committee held a hearing on a bill Thursday on bill number (H.R. 7), otherwise known as the “No Taxpayer Funding of Abortion” bill. This bill would deny tax subsidies to women and who purchase health insurance plans that include abortion coverage. The bill only makes an exception for rape and incest victims and women who would die without abortion care.

According to NARAL Pro-Choice America, the effect of the bill is comprehensively anti-women, anti-pro-choice, and punitive toward women who try to exercise their basic rights. The group argues that the legislation would:

Raise taxes on small businesses and individuals who buy insurance with abortion coverage outside the exchanges. It does so by imposing tax penalties on individuals and small businesses that choose private health plans that cover abortion care. (Absent political interference, 87 percent of private plans cover abortion services.)

Eliminate abortion coverage from private insurance plans sold through Obamacare exchanges. This bill includes a provision that would effectively end abortion coverage for women in state insurance exchanges who use their own, private funds to pay for their insurance and ban abortion coverage for millions of middle- and low-income women who will receive partial subsidies to purchase insurance.

Spur audits for rape survivors. H.R.7 eliminates medical-expense deductions for abortion services, with exceptions only for cases of rape, incest, or when the life of the woman is in danger. As a result, the bill could prompt the IRS to audit a sexual-assault survivor who seeks abortion care with her own, private funds.

This anti-choice bill, H.R.7, would also put millions of small businesses in danger by taxing them if they choose to cover their employees with abortion coverage- which most private plans do. However, tax experts believe if the bill was to pass, most businesses would do away with their abortion coverage in fear of being taxed.

Pro-Choice America stated, women are becoming so desperate in states that have practically banned abortion, such as Texas, that they are crossing the Mexico border in hopes to have an abortion.

At this time NARAL Pro-Choice America is asking for the public’s help. H.R.7 is one of the very first bills being debated in 2014, states NARAL PCA. In order to stop the bill from being passed, they have asked for the public to contact your member of Congress and let them know you are opposed to the rape audit bill. Though it is unlikely that the bill will pass the Senate and if it does, there is virtually no chance the President Obama will sign it into law.

The goal of NARAL and other women’s rights organization is to raise awareness of the trend of attacking and trying to eliminate women’s rights, particularly reproductive rights in this country. It is important that people across the nation continue to demonstrate how important this issue is to them by publicizing this silent campaign against women and making sure that the assault which started during the 2012 Presidential election against our rights and our bodies does not gain momentum.

Follow Patrice Ellerbe on Twitter
Twitter: @nahmias_report Staff Writer: @PatriceEllerbe