About the author: I realized what was really going on in the world in 2013. Since then I have been trying to make sense of it all and help others along the way. I am still learning more each day. You can visit my Facebook here and my website here.
“Three-quarters of Americans (75 percent) are living paycheck-to-paycheck to make ends meet, according to a survey from CareerBuilder. Thirty-eight percent of employees said they sometimes live paycheck-to-paycheck, 15 percent said they usually do and 23 percent said they always do.”
The evidence that the middle class in America is dying continues to mount. As you will see below, nearly half the country would be unable “to cover an unexpected $400 expense”, and about two-thirds of the population lives paycheck to paycheck at least part of the time. Of course the economy has not been doing that well overall in recent years. Barack Obama was the only president in all of U.S. history not to have a single year when the economy grew by at least 3 percent, and U.S. GDP growth during the first quarter of 2017 was an anemic 0.7 percent. During the Obama era, it is true that wealthy enclaves in New York, northern California and Washington D.C. did thrive, but meanwhile most of the rest of the country has been left behind.
Nearly eight years into an economic recovery, nearly half of Americans didn’t have enough cash available to cover a $400 emergency. Specifically, the survey found that, in line with what the Fed had disclosed in previous years, 44% of respondents said they wouldn’t be able to cover an unexpected $400 expense like a car repair or medical bill, or would have to borrow money or sell something to meet it.
Just as concerning were other findings from the study: just under one-fourth of adults, or 23%, are not able to pay all of their current month’s bills in full while 25% reported skipping medical treatments due to cost in the prior year. Additionally, 28% of adults who haven’t retired yet reported to being grossly unprepared, indicating they had no retirement savings or pension whatsoever.
But just because you can pay your bills does not mean that you are doing well. Tens of millions of Americans barely scrape by from paycheck to paycheck each and every month.
In fact, a survey by CareerBuilder discovered that 75 percent of all Americans live paycheck to paycheck at least some of the time…
Three-quarters of Americans (75 percent) are living paycheck-to-paycheck to make ends meet, according to a survey from CareerBuilder. Thirty-eight percent of employees said they sometimes live paycheck-to-paycheck, 15 percent said they usually do and 23 percent said they always do. While making ends meet is a struggle for many post-recession, those with minimum wage jobs continue to be hit the hardest. Of workers who currently have a minimum wage job or have held one in the past, 66 percent said they couldn’t make ends meet and 50 percent said they had to work more than one job to make it work.
So please don’t be fooled into thinking that the U.S. economy is doing well because the stock market has been hitting new record highs.
The stock market was soaring just before the financial crisis of 2008 too, and we remember how that turned out.
Just about everywhere you look, businesses are struggling and stores are shutting down. Yes, there are a few wealthy enclaves where everything seems wonderful for the moment, but for most of the country it seems like the last recession never ended.
In a desperate attempt to stay afloat, a lot of families have been turning to debt to make ends meet. U.S. household debt has just hit a brand new all-time record high of 12.7 trillion dollars, but we are starting to see an alarming rise in auto loan defaults and consumer bankruptcies. This is precisely what we would expect to see if the U.S. economy was moving into another major recession.
In fact, we are seeing all sorts of signs that point to a major economic slowdown right now. Just check out the following from Wolf Richter’s latest article…
Over the past five decades, each time commercial and industrial loan balances at US banks shrank or stalled as companies cut back or as banks tightened their lending standards in reaction to the economy they found themselves in, a recession was either already in progress or would start soon. There has been no exception since the 1960s. Last time this happened was during the Financial Crisis.
Now it’s happening again – with a 1990/91 recession twist.
Commercial and industrial loans outstanding fell to $2.095 trillion on May 10, according to the Fed’s Board of Governors weekly report on Friday. That’s down 4.5% from the peak on November 16, 2016. It’s below the level of outstanding C&I loans on October 19. And it marks the 30th week in a row of no growth in C&I loans.
Perhaps we will be very fortunate and break this pattern that has held up all the way back to the 1960s.
But I wouldn’t count on it. Here is what Zero Hedge has to say about this alarming contraction in commercial and industrial loans…
Here’s the bottom line: unless there is a sharp rebound in loan growth in the next 3-6 months – whether due to greater demand or easier supply – this most accurate of leading economic indicators guarantees that a recession is now inevitable.
As Americans, we tend to have such short memories. Every time a new financial bubble starts forming, a lot of people out there start behaving as if it can last indefinitely.
But of course no financial bubble is going to last forever. They all burst eventually, and now the biggest one in U.S. history is about to end in spectacular fashion.
Trump will get a lot of the blame since he is the current occupant of the White House, but the truth is that the conditions for the next crisis have been building up for many years, and the horrors that the U.S. economy is heading for wereentirely predictable.
What a joke. There is no democracy in the USA. When did the USA have democracy anyway? It’s all a game of smoke and mirrors created by the corporatocracy and dark forces behind the scene which is propagated by the useless US mainstream media. Go home stupid bloody Yankees and fix your own country!
The Western Deep State wants to introduce “democracy” in Venezuela through political sanctions, financial system hacking, and religious war due to the country’s refusal to surrender control of its vast energy resources to the Wall Street bankers.
These multi-pronged Deep State attacks on Venezuela has been very persistent in the last decade.
As always, the Western media continue to be a critical tool in demonizing Latin American leaders who continue to exercise Bolivarian principles of defiance.
The allegations against Venezuela’s vice-president could not have been more serious. Announcing sanctions against Tareck El Aissami this week, the US Treasury Department described him as a “prominent drug trafficker” who had overseen and even partially owned narcotics shipments from Venezuela to the US.
As governor of Aragua state and minister of the interior, he allegedly oversaw or partially owned drug shipments of more than one tonne from Venezuela, and dealt directly with Mexico’s Zetas cartel and Colombian narco-boss Daniel El Loco Barrera. In January he was promoted to vice-president.
But as bad as that sounds, El Aissami is only the latest – if the most highly placed – in a long list of Venezuelan officials or people close to power who have been tied to drug trafficking.
The consequence of what the media is trying to say is that the people of Venezuela are immature to put in power these druglords and charlatans, and the West is morally right to introduce another Libya-like democracy into the region.
What lies behind the attacks on Venezuela?
April 10, 2017 03:23 by ThePrisma
The destabilizing plan being pursued is not new. Why is there this insistence on thwarting the Bolivarian Revolution? The Venezuelan Foreign Minister has said that “never before in the history of international organizations have we seen unlawful, deviant, arbitrary, biased behaviour.”
Caracas (PL) Venezuela was victorious once again in the Organization of American States (OAS) after it managed to thwart the interventionist and meddling efforts driven by its Secretary General, Luis Almagro.
Bolivarian diplomacy successfully dealt with the plans of a powerful alliance led by the United States Department of State and supported by some right-wing governments in the region, with dignity and integrity. For this, Almagro acted as the right hand of the alliance by aligning himself with the most reactionary groups in the country.
The destabilizing plan being pursued against Venezuela is not new. In June of last year, the head of the so-called “ministry of colonies” – as Cuba’s Eminent Foreign Minister, Raúl Roa García, described the OAS – tried to unsuccessfully activate the Inter-American Democratic Charter, as an instrument of coercion and blackmail, against the Bolivarian government.
On March 14, Almagro presented a report on Venezuela funded by the so-named International Crisis Group NGO which is supported by US oil company Exxon Mobil; and is sponsored by the American Petroleum Institute which has clear interests in Venezuelan energy resources.
This same step had been taken a year earlier, in June 2016, and the results were the same: it did not work despite Washington’s political backing. But some wonder why there is this insistence in thwarting the Bolivarian Revolution in Venezuela.
According to reports issued by the powers that be in Caracas, the secretary general of the OAS maintains close ties with the most reactionary factions of Venezuela’s extreme right, and between 2016 and 2017 met 26 times with representatives of these opposition groups.
It is striking that more than 70% of his messages on Twitter”s social network are aimed at attacking Venezuela, its government and its officials.
Undoubtedly, Almagro took sides with the right-wing groups that are fighting for power against the government presided over by Nicolás Maduro, despite the latter’s victory at the ballot box and the fact that these groups are not inclined towards dialogue as a means of reaching national agreements .
Hence Almagro’s continual “reports”, which were described by the Venezuelan Minister for Foreign Affairs, Delcy Rodríguez, as “a complex strategy of intervention in the medium and short term.”
Why is he insisting on the Democratic Charter?
The Inter-American Democratic Charter, adopted on September 11, 2001, in a special session of the OAS Assembly, held in Lima, Peru, is a mechanism that would be applied in case of a rupture in the democratic institutional political process or the legitimate exercise of power by an elected government, in any of the member states of the organization.
By triggering this, a temporary suspension of the right to participate of an OAS member state can be approved, although to realise this a two thirds majority vote is required.
Exclusion from this inter-American regional process limits the sanctioned government’s ability to take action and it would also be isolated and sanctioned internationally.
Application of the Inter-American Democratic Charter to Venezuela – according to the above thinking and as part of the plan orchestrated by Almagro – could have consequences for other regional organizations, such as the Bolivarian Alliance for the Peoples of America, the Community of Latin American and Caribbean States, The Union of South American Nations, Petrocaribe, among others – which promote social integration in the region.
Obviously, that was the task entrusted to Almagro by the US State Department, which, if carried out, could lead to a dangerous destabilization of Latin America comparable with what has already been experienced in the Middle East and in some areas of Eastern Europe.
Venezuela continues to struggle
In a recent press conference, the Venezuelan Foreign Minister stated that “never before in the history of international organizations have we seen unlawful, deviant, arbitrary, biased behaviour. The behaviour shown towards Venezuela really has been unprecedented and unusual, marked by attacks which articulate a plan of intervention. ”
For Rodríguez, with its new interventionist attitude, “the OAS is returning to the darkest pages in its history,” with a shameful record of silence in the face of coup d’états, systematic violations of human rights and fundamental freedoms; and always at the service of the oligarchies and the most reactionary power groups.
The high ranking official explained that the plans that were being plotted against Bolívar’s homeland “via vile blackmail, pressure and extortion” by Washington were known about.
He added that two US congressmen threatened “in a crude, vulgar and brutal way member states of the organisation, sister states that remained standing with their heads held high, their morals to the fore, defending the dignity and also the sovereignty and independence of the Great Homeland.” (PL) *Journalist in Venezuela
Late last year, the banking system of Venezuela was sabotaged when its electronic payment system collapsed.
President Maduro branded the attack an act of international aggression against Venezuela, orchestrated to hurt the people in the country.
Venezuelan President Nicolas Maduro announced Saturday the arrest of those responsible for the banking system sabotage that saw the nation’s electronic payments system collapse in the country on Friday.
Five employees from Credicar, a company in charge of credit and debit card operations in the country, were arrested Friday night. “It was a deliberate action what happened in Credicar, it’s confirmed, and those responsible have been detained,” said Maduro.
While this formula of hybrid geopolitical interventions is familiar to all of the advanced readers of this site, most of the people in the Americas have yet to understand the hidden agenda which motivated the leaders behind the mass actions, which complements the power of Western propaganda which fueled color revolutions in many parts of the world, and within the United States, too.
As typical in any religious countries, Vatican embedded agents has also tried to do their part in instigating rift right at the core of the Venezuelan society. The Catholic priests unleashed their anti-Maduro propaganda to solicit an aggressive response from his die hard supporters.
Collectives are pro-government groups that organize community events and social projects, but they also have been accused of intimidation and violence against those who oppose the government.
“They started to shout insults, then would be calm, and then they would shout again,” said Maria Cisneros, who has attended the church for 20 years. She requested her name be changed for this story out of fear of retaliation.
“These were aggressive people, with aggressive vocabulary, using profanity, and they said all kinds of vulgarities; we felt very attacked,” she said.
The Deep State is also insulated from a possible coordinated retaliation of its sanctions against targeted country because it is only the people of US that will suffer from it, and not the Deep State crowd themselves.
‘Get your dirty hands out of Venezuela’ – Maduro to Trump
Published time: 20 May, 2017 17:23
The United States should “get out of Venezuela,” the country’s leader, Nicolas Maduro, said after Washington slapped Venezuelan top judiciary officials with sanctions to “support” the Venezuelan people.
The new sanctions package, targeting the chief judge and seven other members of Venezuela’s Supreme Court, was imposed by the US Treasury to “advance democratic governance” in the country.
“Enough meddling … Go home, Donald Trump. Get out of Venezuela,” Maduro said in a speech broadcasted live on TV, as cited by Reuters. “Get your dirty hands out of here.”
The Venezuelan president’s tirade echoed a statement issued by the government, accusing the US of intervening into country’s internal affairs and seeking to further destabilize it.
“President Trump’s aggressions against the Venezuelan people, its government and its institutions have surpassed all limits,” the statement said.
It urged the US to focus on sorting out its own internal problems, instead of meddling in Venezuela’s affairs.
“The extreme positions of a government just starting off only confirmed the discriminatory, racist, xenophobic, and genocidal nature of US elites against humanity and its own people, which has now been heightened by this new administration which asserts white Anglo-Saxon supremacy,” the statement read, as cited by Reuters.
The sanctions imposed by the US Treasury include freeze of any assets the eight judges might have in the US, deny them entering the country, and prohibit US citizens to do any business with them. The situation in Venezuela “is a disgrace to humanity” and the country “has been unbelievably poorly run,” Donald Trump said Thursday.
“We haven’t really seen a problem like that, I would say, in decades,” Trump added.
Thousands of anti-government protesters hit the streets Saturday with large crowds marching down the streets of the capital, Caracas, and the city of Christobal in the western Tachira state, which has grown into one of the main centers of the ongoing unrest.
In light of the worsening food shortage in Venezuela, Putin decided to send “several thousand tons of wheat each month to the struggling South American country.”
Russia’s Putin pledges to send food to starving Venezuela
May 19, 2017 Associated Press
The Venezuelan Foreign Ministry announced Friday that Russian President Vladimir Putin had promised to start delivering food after speaking on the phone with President Nicolas Maduro.
Flour is one of the hardest goods to come by in shortage-hit Venezuela. It is rarely available in regular grocery stores. Instead, people find it on the black market or wait in line for hours to buy two packages each at state-run stores.
The gesture of support for the Maduro administration comes at a key moment. Regional governments have been distancing themselves from the embattled socialist president and calling on him to respect democratic norms.
One by one, these Latin American countries, e.g. Brazil and Argentina, succumbed to the will of the Deep State due in part to the ignorance of the middle class to the above methods that are being used in the region.
At present, only a combined Russia and China intervention might deter a complete Deep State usurpation of Latin America, unless some form of miracle will one day wake up the American “Patriots” to rise up in arms against the latter.
The report, based on the Board’s fourth annual Survey of Household Economics and Decision making conducted in October 2016, presents a “picture of improving financial well-being among Americans”, at least according to the report (read on to see if this is merited). Overall, 70% of the more than 6,600 respondents said they were either “living comfortably” or “doing okay,” up 1% from 2015 and up 8% from the first survey results in 2013.
Not surprisingly, the highest percentage, or 92%, of those who responded they were “living comfortably” was among the group with more than $100,000 in family income. For Americans making less than $40,000 the breakdown was almost evenly split with 49% saying they are “just getting by.” According to the same study, 28% of respondents said that their income in the last 12 months was less than $25,000, and 40% report that their income was less than the key $40,000 cutoff, which suggests that roughly 4 in 10 Americans are “finding it difficult to get by.”
The improvements in well-being as reported by the survey respondents were concentrated among high-income adults, with at least some college education, and prompted the WSJ to write that “U.S Household financial health improved in recent years.” Even so, most of the changes reported in the survey were relatively modest, “reflecting a slowly improving economy and an unemployment level at or below 5% throughout 2016.”
Now, the not so good news.
Nearly eight years into an economic recovery, nearly half of Americans didn’t have enough cash available to cover a $400 emergency. Specifically, the survey found that, in line with what the Fed had disclosed in previous years, 44% of respondents said they wouldn’t be able to cover an unexpected $400 expense like a car repair or medical bill, or would have to borrow money or sell something to meet it. Troubling as this statistic remains, the overall share of adults who would struggle to come up with $400 in a pinch has declined by 2% from the last survey conducted in 2015, and down 6% since 2013.
Of the group that could not pay in cash, 45% said they would go further in debt and use a credit card to pay off the expense over time. while a quarter would borrow from friends of family, and another 27% just couldn’t pay the expense. Others would turn to selling items or using a payday loan.
Four million children — or three in 10 — across Britain are living in poverty, with the figure set to rise by a further million in the next ten years, a new report shows.
The shocking statistics were released on Thursday in a report by the Royal College of Pediatrics and Child Health (RCPCH) and Child Poverty Action Group (CPAG).
The report, based on a survey with 250 pediatricians across Britain, noted that poverty is having a “devastating” impact on the health of British children.
The document, citing doctors, warned that poor parents are diluting milk, skimping on food and raising their children in damp houses.
More than three in five doctors said food insecurity and people’s inability to buy enough food affecting the health of children.
“I see patients with poor nutritional state from poverty or low income, with growth below [what is] expected,” said one pediatrician while another added, “Parents dilute down milk as they can’t afford formula milk.”
“We see parents in A&E who are limiting their eating to care for their children. Children are worried, scared and upset,” one doctor noted.
Doctors stated that many parents deprive themselves of food, while some others cannot afford clothes, toothbrushes or toothpaste.
“Cold, damp, overcrowded housing exacerbate respiratory illness and other conditions,” one doctor said.
Doctors said poverty is also impacting children’s mental health, with “worry, stress and anxiety” taking a “little part of their childhood” away.
“A part of their day they will spend worrying instead of playing or learning,” they added.
According to reports, between 4,000,000 and 13,000,000 people in the UK are living below the poverty line.
And, the UK government is planning to cut welfare benefits and implement tax reform, which is likely to push more children into “absolute poverty” over the next five years, according to a British think tank.
The proportion of children living in poverty is likely to rise to around 30 percent by 2022, a 3 percent rise from 2015, according to the Institute for Fiscal Studies (IFS) released in March.
The IFS projects that the number of children in poverty will rise by 900,000 to 5.1 million by 2022.
More than half of Canadians are living within $200 per month of not being able to pay all their bills or meet their debt obligations. It gets worse: a whopping 31% of respondents said they already don’t make enough to meet all their financial obligations.
Two months ago, when quoting the CEO of cell phone insurer Assurant, who appeared on Bloomberg TV to discuss business trends, one of his quotes caught our attention: “the reality is, half of Americans can’t afford to write a $500 check,” Colberg said. We decided to look into the CEO’s claim about the woeful state of US finances. What we found is that according to a recent Bankrate survey of 1,000 adults, 57% of Americans don’t have enough cash to cover a mere $500 unexpected expense. Turns out the CEO was right. And while that may appear dire, it is a slight improvement from 2016, when 63% of U.S. residents said they wouldn’t be able to handle such an expense.
The Bankrate survey findings echoed research published last year by the Federal Reserve, which found that 46% of respondents said they would be challenged to come up with even less, or $400, to cover an emergency expense, and would likely borrow or sell something to afford it. When the Fed asked what types of emergency expenses Americans had actually faced in the last year, more than one out of five cited a major unexpected medical expense. The average expense: $2,782, or almost seven times higher than the Fed’s hypothetical $400 surprise bill.
How does this stunning statistic compare to some other developed nations?
It turns out that the state of half of US finances, deplorable as it may be is positively shining, not to mention “twice as good”, when compared to the country’s neighbor to the north, where a recent Ipsos survey on behalf of accounting firm MNP, found that more than half of Canadians are living within $200 per month of not being able to pay all their bills or meet their debt obligations. Needless to say, if $500 in savings is bad, half that amount is outright bizarre.
“With such a small amount of wiggle room, any kind of unanticipated hardship, such as a job loss or even a car repair, could send an already struggling family into financial despair,” Canada’s Global News quoted Grant Bazian, president of MNP’s personal insolvency practice, which is one of the largest in Canada. He also revealed that for 10 per cent of Canadians, the margin of error when it comes to household finances is even thinner, at $100 or less.
It gets worse as those with anything at all left at the end of the month were in better shape than many: A whopping 31% of respondents said they already don’t make enough to meet all their financial obligations.
The poll also found that while debt is causing Canadians a fair bit of stress, few appear to be overly worried or on track to buff up their monthly financial cushion. Two-thirds of survey takers said they are “less than very confident” about their ability to create an emergency fund.
And then this hair-raising finding from the survey: “Roughly 60 per cent said they don’t have a firm grasp of how interest rates affect debt repayments.” According to Bazian, the statistic helps explain why many indebted Canadians end up taking on more debt and high-cost loans. “That’s how so many end up in an endless cycle of debt,” he noted. It also explains charts such as this one, showing the harrowing difference surge in Canadian household debt, which has grown by 60% since the start of the century.
According to Global News, the concerning data also raises the question of whether Canadians understand the implications of an interest rate hike by the Bank of Canada. A decision by the BoC to start lifting its key policy rate from historic lows would raise the cost of carrying debt across the country; should rates raise enough Barclays will have to change its caption in the chart above. A one percentage point rise in the BoC’s key interest rate would likely push up variable mortgage rates by a similar amount. A variable mortgage rate that’s currently set at 3 per cent, for example, would go up to 4 per cent, which represents a 33 per cent increase in interest payments for the mortgage holder. That’s an extra $83 a month for every $100,000 in outstanding mortgage debt.
And to show just how bad the debt situation in Canada truly is, here are some more charts which are largely self-explanatory.
And perhaps the most important – and troubling – chart of all:
Thomas Piketty, Emmanuel Saez, and Gabriel Zucman have calculated that, on average in 2014, the middle class received more of the safety net than the lower class. (Photo: Unsplash/Pixabay/CC0)
Many wealthy Americans complain about the amount of government subsidies going to the poor. Their complaints demonstrate ignorance, or greed, or a total lack of fair-mindedness, or a combination of all those symptoms of entitlement at the top.
The Rich Get as Much of the Safety Net as the Poor
Thomas Piketty, Emmanuel Saez, and Gabriel Zucman have calculated that, on average in 2014, the middle class received more of the safety net than the lower class. Specifically, the 40% of American adults with incomes just below the top 10% received more in safety net government transfers (Medicare, Medicaid, food stamps/SNAP, Veterans’ benefits, etc., but excluding Social Security) than the bottom 50% of Americans (Figure 11).
“Wealthy Americans complain about ‘entitlements’ for the poor, but they keep collecting their own entitlements, to a degree that average Americans can only dream about.” Even MORE STUNNINGLY, according to the same authors, when Medicare and Social Security are both included the richest 10% on average received approximately as much in government transfers as the poorest 50% (Figure S.13).
The BIGGEST SHOCKER: When Medicare and Social Security are both included, the average household in the .01%—those with OVER $100 Million in assets—received MORE in government transfers in 2014 than the average household in the poorest 50% (Table II-TG4b). Even without Social Security, the multi-millionaires got nearly two-thirds the government transfers received by the poorest 50% (Table II-TG4).
Over 90 percent of safety net entitlement benefits go to the elderly, the disabled, or working households. This helps to explain the variousestimates that the poorest 20% of American households receive only about one-third of all government benefits, or about $250 billion of the total ‘welfare’ budget of $740 billion. That comes to about $10,000 for each of the 25 million households in the bottom quintile, an annual government subsidy that pales in comparison to the tax benefits enjoyed by wealthy households (to be described below).
The Rich Cash In on Medicare and Social Security
As the longevity of wealthy Americans increases relative to low-income Americans, they benefit more and more from Medicare and Social Security. A National Institutes of Health study found “a growing gap in projected lifetime benefits under programs such as Social Security and Medicare because higher earners are increasingly more likely to receive such benefits over longer periods of time relative to lower earners.” A Brookings report quantifies this, estimating that lowest-quintile Americans born in 1960 will receive “only 78 percent of the lifetime Medicare benefits received by the top income quintile.”
The U.S. federal tax system is progressive, and thus big incomes lead to higher federal taxes and greater investments in Social Security. The Urban Institute calculates that a married couple with two low earners will pay only about one-third the amount paid by a married couple with one high earner and one average earner. However, 20-year annuities (ages 65 to 85) yield about $22,000 per year for the low earners and about $44,000 per year for the high/average earners (see analysis here).
Much, Much MORE Entitlement Money: Tax Benefits, Almost Entirely for the Rich
According to West’s Encyclopedia of American Law, an ‘entitlement’ is “an individual’s right to receive a value or benefit provided by law.” This includes mandatory means-tested safety net programs and subsidies resulting from new or revised tax laws. Based on analyses by the Congressional Budget Office (CBO), Pew Research, the Center on Budget and Policy Priorities (CBPP), and several trusted news sources, the following is a summary of tax entitlements taken by the households of the poorest 20%, the richest 20%, and the richest 1%.
The Poorest 20% of U.S. Households Get up to $3,000 Each in Tax Entitlements
CBO estimates that about 8 percent of tax breaks in 2013, or $72 billion out of $900 billion, went to the bottom quintile, while CBPP estimates 2.8 percent of $1.1 trillion, or about $30 billion. That accounts for anywhere from $1,000 to $3,000 in government tax subsidies for the poorest 20%.
The Richest 20% of U.S. Households Get at least $18,000 Each in Tax Entitlements
CBO itemizes the ten main tax expenditures, including capital gains, employer health insurance, pension deductions, and state and local tax breaks. In 2013 over half of these benefits (or about $450 billion) went to the top quintile (25 million households). That’s $18,000 per household. CBPP’s estimate is much higher, with two-thirds of $1.1 trillion in benefits (almost $30,000 per household) going to the top quintile.
The Richest 1% of U.S. Households Get Over $120,000 Each in Tax Entitlements
Evidence that most of this goes to the super-rich is derived from various sources, including CBO, National Priorities Project, The Fiscal Times, and the New York Times. CBO estimates that 17 percent of the $900 billion in tax expenditures in 2013, or $153 billion, went to the 1.25 million households in the top 1%. CBPP’s estimate is much higher, with 23.9 percent of $1.1 trillion in benefits (over $200,000 per household) going to the top quintile.
Even MORE Lucrative Entitlements for the Rich
On top of everything else, there exists an incredible array of big-money tax breaks that primarily benefit well-positioned Americans: (1) The mortgage interest deduction for second homes, which might even be a YACHT; (2) Another luxury home benefit with UP TO A HALF-MILLION DOLLARS TAX-FREE when a couple sells their home; (3) Yet another rich-couple subsidy with properties worth up to $10 million TAX-FREE when an estate is passed on to heirs; (4) Deductions on rental properties for landlords, who are unlikely to be low-income people; (5) The $127,200 limit on Social Security taxes, which benefits only the richest 10% of Americans; (6) Tax breaks on 401(k) accounts, which are less likely to be owned by low-income people; (7) Higher education financial aid, especially from the prestigious universities that admit more students from families in the top 1% than the entire bottom 50%; and (8) Miscellaneous entitlement perks, such as business meals, gambling loss deductions, tax preparation.
And finally, for any defenders of high-end entitlements on the basis of federal tax paid, TOTAL taxes should be considered. It has been estimated that poor Americans pay about 25 percent in total taxes, while the 1% pays anywhere from 18 to 23 percent.
Wealthy Americans complain about ‘entitlements’ for the poor, but they keep collecting their own entitlements, to a degree that average Americans can only dream about.