The Individual Retirement Account is a financial device in the US that was supposedly meant to encourage ordinary people to save for their old age. You could put up to a certain amount each year into the account and that amount could be deducted from your income, thus reducing your taxes. The money in the account would then grow tax-free as long as you did not take it out until the age of 59 ½. The idea was that you would let it grow until you needed it in your retirement. When you withdrew it then as needed, you would likely be in a lower tax bracket since you were not earning income.

That was the basic idea of the IRA. But then another wrinkle was introduced in 1997 and that was the so-called Roth IRA that was like the regular IRA except that the initial deposit into the account was not tax-deductible. But the offsetting benefit was that the money in the account was not taxable when you withdrew it at age 59 ½. Because these plans were supposedly meant for ordinary people, there was a limit to how much you could put into the account each year, with the original cap being S2,000, though that limit increased with time. If you started contributing early in life, the tax free growth could provide you with a little nest egg. In 2018, the average amount in a Roth IRA was $39,000.
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The latest jobs report showed healthy growth in hiring. But more importantly, it also showed a rise in wages.

In an encouraging burst of hiring, America’s employers added 850,000 jobs in June, well above the average of the previous three months and a sign that companies may be having an easier time finding enough workers to fill open jobs.

Friday’s report from the Labor Department was the latest evidence that the reopening of the economy is propelling a powerful rebound from the pandemic recession. Restaurant traffic across the country is nearly back to pre-pandemic levels, and more people are shopping, traveling and attending sports and entertainment events. The number of people flying each day has regained about 80% of its pre-COVID-19 levels. And Americans’ confidence in the economic outlook has nearly fully recovered.
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The report by ProPublica about how the very rich pay almost no taxes shows the problem with the tax system that taxes income and not wealth. As a result, the wealthy use devices to massively increase their wealth with things like stock options and other assets that do not get taxed until they are sold and get converted into income. But we know that the wealthy live a lavish lifestyle. So where does that money come from? Don’t they have to sell assets to get money and thus be liable for taxes on that amount? Ha! Such things apply only to peons like us.
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I have written before about one method by which huge highly profitable corporations avoid taxes. The way it works is for a big company in the US (say) to buy a small company in a country that has favorable tax laws, Ireland being the current favored nation. They then ‘invert’ the relationship, claiming that the foreign company is the parent one while the US one is the subsidiary, even though nothing else has changed. This enables them to pay the lower taxes of the other nation while enjoying all the benefits of being in the US. This practice even has a name: ‘corporate perversion’.
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Ronald Regan’s ‘welfare queen’ rhetoric propagated the myth that many Americans are lazy good-for-nothings who would take any opportunity to not work, a slander on working people that did not seem to hurt his popularity with the working class, perhaps because many people believes it to be true of other people, not themselves. The reason for pushing that myth was to justify cuts in benefits to the poor (“It is for their own good, so that they learn the value of work.”) in order to give tax cuts to the rich. Neoliberal Democrats like Bill Clinton also seized on it continue the cuts, in the name of ‘ending welfare as we know it’.
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A recent episode of the radio show Radiolab had a story from seven years ago by an award winning writer and investigative reporter Gabriel Mac who managed to get hired at an internet retailer warehouse. The show is careful not to mention the name of the company where he was a ‘picker’ and worked in a giant warehouse that was the size of about 17 football fields, referring to it by the generic name of Amalgamated. He said that at the beginning of the day they are given these scanner devices that tell them where to locate an item on the shelves to put it in a plastic bag and place it on a conveyor belt. The items seem on the surface to be placed on the shelves at random with the same item scattered all over the warehouse and placed in bins with other unrelated items. But the seeming randomness is misleading. The computer knows where things are and they have been placed so as to make collecting the items ordered by customers quicker.
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When a social affliction affects only the poor or people of color, it tends to be either ignored or treated cursorily. But as soon as the same affliction hits white people, it suddenly becomes worthy of study by social scientists and lead to calls for finding solutions. We saw this with the drug epidemic. As long as the problem of drug abuse was seen as mainly in the black community in the form of marijuana or crack cocaine, the reaction was harsh policing and punitive jail sentences, leading to the massive overcrowding of prisons and the ruination of lives and families, not to mention the numerous killings of black men by police where the initial interaction was caused by the police stopping and searching them for drugs. But when the opioid epidemic hit that largely affected white people, we have seen more humane approaches being taken, with an understanding that drug use is more a health problem than a criminal problem.
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In Trump’s final days in office, he seemed to relish the idea that things would fall apart in the US after he was out of office. He must be seething that none of his dire warnings have come true.

In October 2020, he had warned that the stock market, the only economic indicator that he cares about, would crash if Biden were elected, wiping out people’s wealth. But that has not happened. The stock market keeps rising to record levels. This does not mean that most people are doing well, but just that the investor class and the very wealthy are doing just fine.
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