The new way

The income gap between the rich and everyone else has been increasing by every major measure for more than 30 years. Much of this has been caused by globalization but that is coming to an end. One way to understand this disparity is to compare CEO salaries. In 1950 the average CEO earned 25 times as much as a factory worker and today it is 300 time more. The way to reverse this trend is to do a couple of things each year. This year the government should start taking social security tax from all earned income instead of stopping at $184,000. Second increase the child tax credit from $2,200 to $4,000. Collecting SS tax on all income would bring in $475 billion per year and increasing the child tax credit would only cost the government $100 billion. This would mean a family of four earning $100,000 would pay zero income tax or $3,000 less than they now pay. Some states are implementing state income taxes on millionaires. For this to be effective it must be national otherwise people will just relocate to another state. A 5% surtax on all earned income over $1 million per year would bring in $80 billion.

Income gap

The income gap between the rich and everyone else has been increasing by every major measure for more than 30 years. Much of this has been caused by globalization but that is coming to an end. One way to understand this disparity is to compare CEO salaries. In 1950 the average CEO earned 25 times as much as a factory worker and today it is 300 time more. The way to reverse this trend is to do a couple of things each year. This year the government should start taking social security tax from all earned income instead of stopping at $184,000. Second increase the child tax credit from $2,200 to $4,000. Collecting SS tax on all income would bring in $475 billion per year and increasing the child tax credit would only cost the government $100 billion. This would mean a family of four earning $100,000 would pay zero income tax or $3,000 less than they now pay. Some states are implementing state income taxes on millionaires. For this to be effective it must be national otherwise people will just relocate to another state. A 5% surtax on all earned income over $1 million per year would bring in $80 billion.

REE

China uses acid solvents to extract rare elements (REE) and this presents an environmental hazard. The result is that the ground water is now contaminated to the point that the Yellow River, water supply to 150 million people, is now unsafe. A new company, Phoenix Tailings is much cleaner. First off, instead of mining the rare earths, Phoenix uses tailings from existing mines, along with coal ash from closed down power plants as the source of rare earths. In processing they do not rely on chemicals but instead use electrolysis to separate out the different metals. This will allow them to catch up with China much sooner and do so in a more environmentally favorable way.

Rare earth elements

The big mistake the US made was in the mining and processing of rare earth metals. The United States was the world's leading producer of rare earth elements (REEs) from the 1960s through the mid-1980s, largely driven by the Mountain Pass mine in California. This was closed down in 2002 because of environmental concerns. Meanwhile the Chinese leader Deng Xiaoping realized the importance of these metals and famously said, The Middle East has oil, China has rare earth. After a series of bankruptcies, MP Materials acquired the California site in 2017 and is now mining and processing rare earths. Over the past 30 years China continued its production without any environmental concerns and today mines 65% of all rare earths and processes 90% of the world supply. The US is now scrambling to catch up and China is using their rare earths as a bargaining chip in negotiations with the US.

Deportations in Europe

Starting about ten years ago, European countries began to realize that they had a shortage of young people, the group that represented both the producers and consumers. In an attempt to alleviate the problem, they opened the door to immigrants. The result was increases in crime, drugs and gangs. The welfare system was overwhelmed and schools and medical facilities were over crowded. The result is that countries have undertaken massive deportation programs where over 500,000 are forced to leave each year. It was one more example of good intentions going awry. The same thing happened to Canada and they too are deporting.

Spending

Using states as experiments to determine national policy is considered helpful in setting up national policy. The "laboratories of democracy" concept, popularized by Justice Louis Brandeis, allows U.S. states to test innovative social and economic policies without risking the entire nation 39 states currently have one party control of the governor, state senate, state house and all state wide offices, 23 Republican, 16 democrat and 11 with divide government. The biggest three democratic states by population are California, New York and Illinois and the biggest republican states are Texas, Florida and Georgia. The three democratic states have a combined total debt of $2.4 trillion and the three republican states at $130 billion about 1/20 as much. The current budget for the three democratic states is $658 billion and the three republican states add up to $324 billion. Both groups have similar populations with the democratic states at 71 million and the republican states at 66 million. The top income tax rate in the three democratic states averages 9.4% and the average for the republican states is 2%. The federal government with a $37 trillion debt is much like the democratic states. This is the result spending more than income.

Veterans

When an active-duty military person dies they are eligible for government benefits and the amount depends on rank and time of service. For an E-3 with two years and a base salary of $2,836 per month the Disability and Indemnity Compensation (DIC) benefit is $1,700 for the spouse and $420 for each child. In addition, social security would provide $1,200 per month for the spouse and another $1,200 per child. For example, a young soldier age 30 with two years of service and rank of E-3 dies leaving a wife and one child. His family is eligible for $2,120 from DIC benefits and $2,400 per month from social security for a total monthly income of $4,520. The SS benefit ends when the child is 18 but starts up again when the mother is age 60. His family receives a onetime tax-free payment of $100,000. The family will continue to receive the other benefits associated with active-duty service things like subsidized housing and GI bill and most importantly healthcare. The GI bill is available for spouse and children. Veterans on partial disability can collect their disability checks and SS but not the DIC benefit. The disability benefit can be partial or full salary depending on the severity. Most of the other benefits continue other than the $100,000 tax free cash.