Bridging the Income Gap

Krugman: Now That’s Rich

Via The New York Times, Paul Krugman writes: Bush Tax Cuts - Now That’s Rich. Excerpt:

According to the nonpartisan Tax Policy Center, making all of the Bush tax cuts permanent, as opposed to following the Obama proposal, would cost the federal government $680 billion in revenue over the next 10 years. 

For the sake of comparison, it took months of hard negotiations to get Congressional approval for a mere $26 billion in desperately needed aid to state and local governments. 

And where would this $680 billion go? Nearly all of it would go to the richest 1 percent of Americans, people with incomes of more than $500,000 a year. 

But that’s the least of it: the policy center’s estimates say that the majority of the tax cuts would go to the richest one-tenth of 1 percent. 

Take a group of 1,000 randomly selected Americans, and pick the one with the highest income; he’s going to get the majority of that group’s tax break. And the average tax break for those lucky few — the poorest members of the group have annual incomes of more than $2 million, and the average member makes more than $7 million a year — would be $3 million over the course of the next decade. 

How can this kind of giveaway be justified at a time when politicians claim to care about budget deficits? Well, history is repeating itself. The original campaign for the Bush tax cuts relied on deception and dishonesty. In fact, my first suspicions that we were being misled into invading Iraq were based on the resemblance between the campaign for war and the campaign for tax cuts the previous year. 

And sure enough, that same trademark deception and dishonesty is being deployed on behalf of tax cuts for the wealthiest Americans.

The book that has the Tories running scared

In The Observer, Nick Cohen praises The Spirit Level, by Richard Wilkinson and Kate Pickett, as The book that has the Tories running scared. Excerpt:

In short, their book seems reasonable and fair, but that isn't the point. The phenomenon of its success is more interesting in its way than its authors' ideas.

I went to see Andy Hull, a Labour councillor in Islington, who, like most local officials in London, is confronting vast inequalities. On the one hand, he has the Islington of popular stereotype: chi-chi restaurants and boutiques catering to City bankers and the diminishing band of liberal intellectuals who can still afford to live there.

All around is the London of housing estates with terrible levels of mental illnesses, teenage pregnancy, crime and premature death. Hull has established a fairness commission and it is attracting healthy crowds to its Spirit Level meetings .

The participants' ideas are becoming very radical, very quickly. Suppose the owners of the chi-chi shops, serving the croissants or fitting the Frost-French dresses, are not paying their workers a living wage, which in London stands at a minimum £7.60 an hour. Should Labour name and shame them? Should it organise demonstrators and tell them to test the liberalism of upper-middle-class consumers by asking them to shop elsewhere?

The panic about Wilkinson and Pickett on the right suggests to me that just because we have a Conservative government does not mean we live in conservative times.

For years, the right could argue that there was no alternative to an economic order that mandated dizzying and ever-expanding chasms between rich and poor. Now its order has been brought down by the wealthy men conservatives in all parties so feted, I think it realises that from now on it will not be able to shout down and shut up egalitarian arguments so easily.

Japan's widening income gap

Via DailyFinance.com: Japan's Economic Stagnation Is Creating a Nation of Lost Youths. Excerpt:

The gap between extremes of income at the top and bottom of society -- measured by the Gini coefficient -- has been growing in Japan for years. To the surprise of many outsiders, once-egalitarian Japan is becoming a nation of haves and have-nots.

The media in Japan have popularized the phrase "kakusa shakai," literally meaning "gap society." As the elite slice prospers and younger workers are increasingly marginalized, the media has focused on the shrinking middle class.

For example, a best-selling book offers tips on how to get by on an annual income of less than 3 million yen ($34,800). Two million yen ($23,000) has become the de-facto poverty line for millions of Japanese, especially outside high-cost Tokyo.

More than one-third of the workforce is part-time as companies have shed the famed Japanese lifetime employment system, nudged along by government legislation that abolished restrictions on flexible hiring a few years ago. Temp agencies have expanded to fill the need for contract jobs as permanent job opportunities have dwindled.

Many fear that as the generation of salaried baby boomers dies out, the country's economic slide might accelerate. Japan's share of the global economy has fallen below 10% from a peak of 18% in 1994. Were this decline to continue, income disparities would widen and threaten to pull this once-stable society apart.

Poorer Canadians less likely to survive cancer

Via The Star: Poorer Canadians less likely to survive cancer. Excerpt:

Cancer patients from poor neighbourhoods have a greater chance of dying prematurely than their wealthier counterparts, says a new study, describing a problem that persists despite universal health care in Canada. 

Much of the literature on the topic, especially in the United States, has partially explained this disparity by saying it is due to the fact that poorer people are diagnosed when their cancer is at a later stage. But this particular study of Ontario patients didn’t find that to be the case. 

“I think a lot of us were attributing much more of an impact of the stage at diagnosis, and this study really has highlighted that no, that’s not the major factor,” Heather Chappell, director of cancer control policy at the Canadian Cancer Society, said in reaction to the findings. 

Chappell said it means researchers and the medical community need to be looking at what other reasons might be at play. 

“There still is a survival disparity and we need to work to understand why that is the case and to correct that difference in outcome,” agreed lead researcher Dr. Christopher Booth of the Queen’s University Cancer Research Institute. 

The study was published online Monday in Cancer, a journal of the American Cancer Society. 

It looked at median household incomes from the 2001 Canadian census and used the Ontario Cancer Registry to identify patients diagnosed from 2003 to 2007. 

The chance of a woman from a poor community being alive five years after diagnosis of breast cancer is 77 per cent, compared to 84 per cent for affluent women, Booth said. 

Fifty-two per cent of patients with colorectal cancer from the lowest socioeconomic groups are alive five years after diagnosis, compared to 60 per cent of those in the most affluent communities. 

“These are important and meaningful differences,” Booth said in an interview from Kingston, Ont. 

“If we had a form of chemotherapy or cancer treatment that led to an improvement or difference in five-year survival of seven, eight, nine per cent — the order of magnitude we’re seeing with these differences — it would be a blockbuster home run as far as cancer treatment advances.”