This is a quote and graph from one of those ‘how to save your retirement’ survival webinars. Not a big fan of selling, but this excerpt reveals an all-important truth:
And as you know, wages have been flat for 40 years. That’s no way to get ahead.
But that’s not how the wealthy operate. They don’t settle for wages. They establish ownership and take a percentage of profits.
Consider the difference . . .
Even during the “lost decade” we just endured, corporate profits are up 210%. Now compare that to household income, which is down 7%.
Now it’s obviously not practical or possible for everyone to start a business, but you can become an owner and take a percentage of profits by acquiring stocks.
The truth of this statement has important implications for anyone trying to exist in a free society with a market economy. It also has strong implications for what kind of policies we should be demanding out of Wash. DC. (whether you are a fan of the TP or OWS):
- Lower capital taxes, at least for middle and low income taxpayers
- Taxfree savings accounts for major expenditures like healthcare and education
- Taxfree retirement accounts without limits
- A greater balance between taxes on incomes, wealth and consumption
- Greater transparency over financial policies
- Elimination, or severe reduction, of the corporate income tax (this only favors those who control the corporation)
- Better rules on corporate governance to defend shareholder/stakeholder interests
- Tax policies that favor workers taking more compensation in equity/profit participation
- Tax policies that favor equity over debt (or at least stop favoring debt) in corporate finance
- Tax policies that favor productive investment in public corporations over things like housing subsidies.