Wealth and Disparity

80 of the wealthiest people in the world have a combined net worth of $1.9 Trillion.  This number equals the total net worth of the bottom half of the entire worlds’ population.

Are we really supposed to believe that these 80 folks are just that much smarter than the 3.5 billion people who represent the bottom 50% of the worlds’ population?

I wonder how much each of them pays, each year, in personal state and federal income taxes?

I wonder what % of their “real” personal income that turned out to be?

Do you suppose they ended up paying close to 35%, like many of us do?

Tax Breaks That Overwhelmingly Affect...

Economist Elliott Eisenberg, Ph.D. shares that personal income tax reform sounds great, but where can the tax cuts come from?  He looks at the five largest tax breaks in terms of dollar cost to the Treasury:

Employee Health Care = $207b
Employee Sponsored Retirement Plans = $103b
Mortgage Interest Deduction = $74b
Lower Taxes on Capital Gains = $69b
Deduction on Charitable Donations = $57b
Add it all up for a total of $510b

I believe that this years’ budget deficit was recently forecasted at about $480b.

Looks to Elliott like Congress can balance the budget, without cutting spending, by just getting rid of these 5 tax breaks.  Sounds too simple.

It is.  Problem is….these are tax breaks that overwhelmingly affect…THE MIDDLE CLASS.

Woops…..that would be me.

Capitalizing Fannie and Freddie

Fannie Mae and Freddie Mac have more than repaid the $188b they received in federal bailout monies in just 6 years.  Why are they still remitting 100% of their profits to the Treasury every quarter, prohibiting them from increasing their capital and net worth to offset potential losses due to future market fluctuations?

The Treasury needs to modify the 2008 agreement and allow Fannie and Freddie to re-capitalize.  In 2014 the combined profits of the two GSE’s will near $25b.  Once re-capitalized a case can be made to lower the higher fees being charged to consumers and make the GSE mortgage offerings less costly to taxpayers.

We need to insist that our government keep these agencies intact and allow them to refinance themselves, out of current profits, and continue to provide this most valuable government service to U.S. homebuyers, as they have for over 60 years.  The GSE’s, established in the 30’s to stimulate affordable home ownership, were a great idea then and still are today.

Remember...the $188b that was re-paid to the U.S. Treasury did not come from “all” taxpayers, as the politicians would have you believe.  Every penny has been re-paid by just those taxpayers who took out a mortgage, and paid higher loan fees, since 2008, which was a very small percentage of “all” U.S. taxpayers.

Good News For FHA

The Federal Housing Administration went from having a net worth of -$1.1 Billion to a current net worth of +$4.8 Billion.  That is a 500% improvement since the 2008-09 mortgage melt down.  The improvement has been gained on the backs of those who obtained FHA mortgages since 2008.  So, only those American taxpayers, who obtained a mortgage in the last 6 years, have paid the price to recapitalize FHA, not every American taxpayer as the politicians would have you think.

These relatively few American taxpayers paid for recapitalization with increased annual mortgage insurance premiums, which have risen to a whopping 1.35% of the mortgage, balance per year.  Now that FHA is recapitalized, there are a few in congress who are suggesting that the annual insurance premium be lowered in an effort to stimulate borrowing and home purchases.