Mitigating America’s inequality problem: Progressive Voting. Monday, Apr 22 2019 

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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 related to economics.

In attempts to solve that pervasive problem, governments and private sectors have instituted several processes, including: Socialism and communism, progressive taxation, social benefits, unions, charities, etc.Image result for rich voter, poor voter

Each is based on progressively providing money to the lower wealth/power groups.

But, the rich repeatedly evade the most restrictive elements of these plans or they reduce the progressive benefits. Either way, the Gap continues to grow.

Socialism and communism, the ultimates of progressivism, devolve to totalitarianism.

A progressive income tax inevitably becomes loaded with special exemptions for the rich.

Progressive social benefits falsely are derided as “unaffordable” and sloth-enabling. Charities help but are woefully inadequate and often too focused on narrow intent.

The reason for the failure of our most well-intentioned, Gap-narrowing efforts can be summarized in two words: “Political power.”

Because of “Gap Psychology” (the desire to widen the Gap below and to narrow the Gap above), the rich continually try to widen the Gap below them. 

Their political power stems from the money they use to bribe America’s thought-leaders — the politicians, the media, and the economists.

(The politicians are bribed via campaign contributions and promises of lucrative employment later. The media are bribed via advertising dollars and ownership. The economists are bribed via school contributions and jobs in think tanks.)

The November, 2018 edition of Scientific American Magazine contained articles about the “Inequality” (Gap) problem. Here are some excerpts.

The American Economy Is eRigged
By Joseph E. Stiglitz on November 1, 2018

Economic inequality is higher in the U.S. than in virtually all other advanced countries.
The American political system, coupled with high initial inequality, gave the moneyed enough political influence to change laws to benefit themselves, further exacerbating inequality.

Breaking this feedback loop by curbing the power of money in politics is essential to reducing inequality and restoring hope.

By most accounts, the U.S. has the highest level of economic inequality among developed countries. It has the world’s greatest per capita health expenditures yet the lowest life expectancy among comparable countries.

The notion of the American Dream—that, unlike old Europe, we are a land of opportunity—is part of our essence. Yet the numbers say otherwise. The life prospects of a young American depend more on the income and education of his or her parents than in almost any other advanced country.

Things appear to be getting worse, partly as a result of forces, such as technology and globalization, that seem beyond our control, but most disturbingly because of those within our command.

It is not the laws of nature that have led to this dire situation: it is the laws of humankind. Markets do not exist in a vacuum: they are shaped by rules and regulations, which can be designed to favor one group over another.

President Donald Trump was right in saying that the system is rigged—by those in the inherited plutocracy of which he himself is a member. And he is making it much, much worse.

The recent example is the GOP’s recent “Tax Cuts and Jobs Act (TCJA)” that is heavily skewed toward benefiting the richand widening the Gap.

Whereas the income share of the top 0.1 percent has more than quadrupled and that of the top 1 percent has almost doubled, that of the bottom 90 percent has declined.

Wages at the bottom, adjusted for inflation, are about the same as they were some 60 years ago! In fact, for those with a high school education or less, incomes have fallen over recent decades.

Even more important than income, is wealth. Income can be transitory, sometimes relevant to only a year or less. But wealth, too often, is passed from generation to generation, because our laws encourage it.

Wealth is even less equally distributed, with just three Americans having as much as the bottom 50 percent—testimony to how much money there is at the top and how little there is at the bottom.

Families in the bottom 50 percent hardly have the cash reserves to meet an emergency.

Newspapers are replete with stories of those for whom the breakdown of a car or an illness starts a downward spiral from which they never recover.

Defenders of America’s inequality refer to the workings of a competitive market, where the laws of supply and demand determine wages, prices and even interest rates—a mechanical system, much like that describing the physical universe.

Those with scarce assets or skills are amply rewarded, they argue, because of the larger contributions they make to the economy.

What they get merely represents what they have contributed. Often they take out less than they contributed, so what is left over for the rest is that much more.

This fictional narrative may at one time have assuaged the guilt of those at the top and persuaded everyone else to accept this sorry state of affairs.

Perhaps the defining moment exposing the lie was the 2008 financial crisis, when the bankers who brought the global economy to the brink of ruin with predatory lending, market manipulation and various other antisocial practices walked away with millions of dollars in bonuses just as millions of Americans lost their jobs and homes and tens of millions more worldwide suffered on their account.

Virtually none of these bankers were ever held to account for their misdeeds.

Fundamentally, the Gap problem boils down to wealth and political power. The wealthy bribe accommodating politicians to pass wealth-friendly laws.

Since the mid-1970s the rules of the economic game have been rewritten, both globally and nationally, in ways that advantage the rich and disadvantage the rest.

And they have been rewritten further in this perverse direction in the U.S. than in other developed countries—even though the rules in the U.S. were already less favorable to workers.

From this perspective, increasing inequality is a matter of choice: a consequence of our policies, laws and regulations.

Weak corporate governance laws have allowed chief executives in the U.S. to compensate themselves 361 times more than the average worker, far more than in other developed countries.

Financial liberalization—the stripping away of regulations designed to prevent the financial sector from imposing harms, such as the 2008 economic crisis, on the rest of society—has enabled the finance industry to grow in size and profitability and has increased its opportunities to exploit everyone else.

A legal provision enacted in 2003 prohibited the government from negotiating drug prices for Medicare—a gift of some $50 billion a year or more to the pharmaceutical industry. Special favors, such as extractive industries’ obtaining public resources such as oil a t below fair-market value or banks’ getting funds from the Federal Reserve at near-zero interest rates (which they relend at high interest rates), also amount to rent extraction.

Further exacerbating inequality is favorable tax treatment for the rich. In the U.S., those at the top pay a smaller fraction of their income in taxes than those who are much poorer.

Historically, the more conservative politicians of either party have favored the rich over the poor.

It’s not that conservatives are more or less honest than progressives. It’s just that the political leanings of progressives, especially at the national level, are more related to compassion for the poor. The vast majority of social programs have been promoted by progressive leaning politicians of either party.

The article concludes with suggested changes:

There is no magic bullet to remedy a problem as deep-rooted as America’s inequality.

Its origins are largely political, so it is hard to imagine meaningful change without a concerted effort to take money out of politics—through, for instance, campaign finance reform.

Blocking the revolving doors by which regulators and other government officials come from and return to the same industries they regulate and work with is also essential.

Beyond that, we need more progressive taxation and high-quality federally funded public education, including affordable access to universities for all, no ruinous loans required.

We need modern competition laws to deal with the problems posed by 21st-century market power and stronger enforcement of the laws we do have.

We need labor laws that protect workers and their rights to unionize.

We need corporate governance laws that curb exorbitant salaries bestowed on chief executives, and we need stronger financial regulations that will prevent banks from engaging in the exploitative practices that have become their hallmark.

We need better enforcement of antidiscrimination laws: it is unconscionable that women and minorities get paid a mere fraction of what their white male counterparts receive.

We also need more sensible inheritance laws that will reduce the intergenerational transmission of advantage and disadvantage.

We need to strengthen and reform retirement programs, which have put an increasing burden of risk management on workers.

Our mortgage system was our Achilles’ heel, and we have not really fixed it. With such a large fraction of Americans living in cities, we have to have urban housing policies that ensure affordable housing

We need to guarantee access to health care.

All of the above suggestions refer to laws, but the wealthy pay to elect representatives who vote to widen the Gap.

While Gap-narrowing efforts provide money and jobs to the less affluent, the rich repeatedly use their political power to pass laws that widen the Gap.

So rather than just trying to provide money and jobs progressively to the less affluent, perhaps there can be an additional approach: Provide progressive political power to the less affluent. I’m referring to Progressive Voting.

From, “Voting in Early America,” we find:

At its birth, the United States was not a democratic nation—far from it. The very word “democracy” had pejorative overtones, summoning up images of disorder, government by the unfit, even mob rule.

In practice, moreover, relatively few of the nation’s inhabitants were able to participate in elections: among the excluded were most African Americans, Native Americans, women, men who had not attained their majority, and white males who did not own land.

That was regressive voting, the belief that the rich were more capable of intelligent voting — a belief endlessly fostered by the rich. Elements of that belief remain even today in some states’ restrictive voter identification laws.Image result for voter inequality

Though there are far more poor than rich, who are eligible to vote, one might think voting already is progressive.

But with gerrymandering, polling-place restrictions, threats, voter disenfranchisement, election chicanery, the fundamental belief that “my vote doesn’t count,” and wealth-funded propaganda, the poor too often, are not able to elect progressive representation.

Thus, we might consider Progressive Voting, wherein a less affluent (based on net worth) voter has more votes than does a rich voter. 

Just as an example:

  • Individual’s Net Worth below $100,000: Each vote counts as 3 votes
  • Individual’s Net worth $100,000 – $10 million: Each vote counts as 2 votes
  • Individual’s Net worth above $10 million: Each vote counts as 1 vote

No doubt, there would be complications. Measuring one’s wealth, for instance, would require definitions and appraisals. But, we already do that in our current income tax and poverty-reduction programs.

Great Britain already does it. Great Britain’s Office for National Statistics published “Measuring Wealth on an Individual Level,” describing their method for determining each person’s wealth:

The main results from the Wealth and Assets Survey (WAS) are published in the series Wealth in Great Britain. To date total wealth has only been published at a household level.

This article describes the methodology we have recently adopted to provide estimates of total wealth for individuals living in private households in Great Britain.

Wealth, as measured by WAS, can be split into four categories:

  • net financial wealth
  • net property wealth
  • private pensions wealth
  • physical wealth

Progressive Voting would give necessary political power to America’s less affluent, thus assuring the maintenance of other progressive, Gap narrowing programs.

In summary: 

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

Because of Gap Psychology, the Gap between the rich and the rest is wide, widening, and a direct threat to democracy and people’s lives.

Progressive programs to narrow the Gap, inevitably have been compromised by the rich, because these programs are not supported by ongoing political power.

Social Security, for instance, has been compromised by changes in age requirements and by taxation. Medicare has been compromised by deductibles and non-coverages. Medicaid has been compromised by funding cuts.

The rich use their money to fund political power. The not-rich can use votes, particularly with a wealth-based Progressive Voting program, to maintain and strengthen Gap-narrowing efforts.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell


The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.



–What will help the poor? Taxes vs. Spending Monday, Dec 20 2010 

The debt hawks are to economics as the creationists are to biology. Those, who do not understand monetary sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.

Now that the new tax bill has passed, three related issues will remain in the news:

1. Will tax reductions cause inflation? (In the unlikely event they do, the Fed will prevent/cure inflation by raising interest rates)

2. Will tax reductions bankrupt Social Security and Medicare? (No. Because the federal government is Monetarily Sovereign, federal spending is not constrained by taxes. If FICA were reduced to $0, this would not affect by even one penny the federal government’s ability to support Social Security and Medicare. Tax reductions cannot bankrupt the U.S. or any of its agencies.)

3. Should taxes on the rich be increased as soon as the current law expires? That is the question discussed in this post.

Some people favor higher taxes on the rich, because they believe this somehow will help the poor. The concept is that by taxing the rich, we close the “gap” between rich and poor, and this closed gap benefits the poor.

I discuss this “gap” further at Closing the Gap and at A Partial Solution for the Gap.

I strongly empathize with the desire to aid the poor. But bringing down the rich is not the way. Whether Bill Gates has $50 billion or is brought down to “only” $10 billion, does not affect the poor. We have had 90% top tax rates, and that did nothing to help the poor. In fact, increasing taxes on anyone, rich or poor, removes money from the economy, which slows the economy. Slowed economic growth always hurts the poor more than the rich, as witness the most recent recession. Who was hurt most, the rich or the poor?

As I mentioned, the federal government does not spend tax money. Unlike state and local governments, which are not Monetarily Sovereign, the federal government spends money it creates ad hoc. If the wealthy were taxed at the 99.99% rate, this would not increase by even one cent, the federal government’s ability to spend, i.e. to help the poor.

The poor benefit most when the economy is growing fastest, because that increases the availability of jobs and money. So to help the poor, we must stimulate the economy. That is, if we want to help the poor, we very simply should help the poor. The Federal government could:

–Increase Social Security benefits.
–Initiate free universal health care insurance.
–Increase unemployment benefits.
–Pay a salary to all students. ( SALARY)
–Eliminate FICA. (FICA)
–Increase the standard deduction on income taxes.
–Allow home rent to be tax deductible.
–Increase food stamps.
–Pay states and cities to reduce sales taxes

There are many ways to help the poor. We should focus on that, not on punishing the rich, which may provide some emotional satisfactions, but does not provide financial benefits to anyone. Let me see some of your ideas for helping the poor.

Rodger Malcolm Mitchell

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”

–A partial solution for the gap between rich and poor: Education Sunday, Jul 11 2010 

Mitchell’s laws:
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●The single most important problem in economics is
the gap between rich and poor.
●Austerity is the government’s method for widening
the gap between rich and poor.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Everything in economics devolves to motive,
and the motive is the Gap.


The debt hawks are to economics as the creationists are to biology.
Graph of United States income distribution from 1947 through 2007 inclusive, normalized to 2007 dollars. The data source is “Table F-1. Income Limits for Each Fifth and Top 5 Percent of Families (All Races): 1947 to 2007”, U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements.

In Closing the financial gap, I showed how direct money transfers don’t close the gap, and I asked, “Is closing the gap economically wise? That is, would our economy grow better, and would our population live better, happier, more rewarding lives overall, if there were little or no gap?

I believe attention paid to closing the gap, by bringing down the rich, is a diversion from the real economic and moral questions that surround poverty. Concern about the rich feeds on that commonly felt class jealousy to which politicians respond with counter-productive laws, which do nothing for the poor or for the economy.

Classic example: Inheritance taxes. They have little effect on tax collections, and to the degree they would affect tax collections, they also would reduce economic growth. And they do nothing to improve the lot of the poor. These, and all other attempts to reduce the gap, by punishing the rich, tend to hurt the economy and the people who most want the gap reduced.

Punishing the rich should not be the goal, but rather we should try to lift our poorest, regardless of whether or not that closes or even opens the gap. In the previous post I suggested that just as government pays for elementary school, middle school and high school, why not have the government pay for college and even advanced degrees? This would give the poor a better opportunity to lift themselves.

One reader expressed concern this actually could have an adverse effect on the economy: “The world still needs ditch diggers,” he wrote.

My response: “The world does not need ditch diggers. The world needs ditches to be dug. Slowly, inexorably, society is moving away from dumb human labor and toward smart machine labor. Those people who do not have an education will not just be relegated to the lowest jobs. They will have no jobs at all. There simply will be no ditch-digging work available.”

While I agree with Modern Monetary Theory (MMT) in many ways, one of my disagreements is its dual goal of price stability and full employment. MMT calls for the government to be the employer of last resort, so that everyone who wants a job, has a job. But MMT ignores job quality in its quasi-charity approach. Giving jobs to everyone surely would devolve to giving money to everyone for little or no work at all.

While unemployment seems to correspond with recessionary times, I see no evidence that unemployment causes recessionary times. Some might even say that unemployment helps stimulate the prevention and cure of recessions just as hunger feelings help stimulate the prevention and cure of starvation. In fact, that is the very purpose of hunger feelings.

In short, unemployment may be only a symptom, just as hunger is a symptom of starvation. Curing the hunger symptom does not cure the starvation disease, as any anorexic should know. Focusing on the symptom may divert attention from the fundamental problem, which is acquisition ability (AA)– people’s ability to acquire what they want.

MMT may claim full employment is not a symptom, but rather a path toward the AA goal. MMT wants the government to achieve full employment by providing a job to anyone who wants one, and apparently the job can be anything. But I suspect a nation of Walmart greeters is not desirable.

So what about a nation of college grads? Is that better? Despite the typical “Who-will-dig-the-ditches?” questions, the answer may be, “Yes.”

A college grad, digging ditches, may be more likely to think of better ditch-digging methods, to the benefit of society. This is an extreme example, and I’ve left the psychology of job satisfaction out of the mix, but I speculate that education will lift the economy, meaning MMT’s focus on jobs is fundamentally wrong.

Rather than the government being the employer of last resort, perhaps the government should be the educator of first resort. That might do more to lift the poor and lift America, than giving people low level, dead-end jobs.

In summary, the problem is not specifically the gap, but poverty. The partial solution is not low end jobs, but education.

Rodger Malcolm Mitchell

No nation can tax itself into prosperity

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