"The L-Curve" - Tour of the US Income Distribution

"The L-Curve"
By David Chandler

Okay, ya'll, this is it. This may be the most important thing you read ... today. Okay, seriously, this is very important. We, the people, really need to understand this. And then do something about it ... dammit!

http://www.lcurve.org/

(snip)

• People on the vertical spike can use their influence single-mindedly and very effectively. A single billionaire can get the undivided attention of any politician he wants, any time he wants.  If he doesn't get what he wants he can, in fact, "fight city hall," the statehouse, and even the federal government.  People on the horizontal spike must pool their limited individual power and organize to have any effect at all.  This is a very difficult thing to manage, in practice.

• The mainstream media has been bought up by people in the "vertical spike."  The primary channels for information and expressed opinion are controlled and filtered by a small, powerful group on the vertical spike whose interests are not representative of the majority of Americans.  Even when there is no direct political message the programming is tailored to the perspectives and sensitivities of large corporations.  The business of media is to sell advertising.  Programming is simply the hook to hold an audience until the next commercial.  Serious examination of ideas of any kind is seen as counterproductive because  it may alienate or bore part of the potential audience.  The result is nonstop sensationalistic binges of O.J., Princess Di, Monica, and Elian.  The growing media monopoly dilutes and distorts the national dialog, and thereby destroys the basis for democracy.  We must find ways to rebuild community and learn to talk to each other directly.

• When taxes are cut, whose taxes are cut and whose programs are cut?  What kinds of taxes are being cut and what kinds of taxes (whether they are called taxes or not) are being imposed?  Sales tax and use fees tax primarily the horizontal spike.  The pre-Reagan progressive income tax drew more from the vertical spike. 

• The flat tax would shift the burden downscale even more.  The sales pitch for this shift usually focuses on "simplification."  Simplification is unrelated to the issue of who the money is coming from.  You could have a simple progressive tax just as easily as a simple flat tax. The proposal to eliminate the income tax entirely would be disastrous.  Those on the vertical spike would escape virtually all of their obligations and the burden of government would be born almost entirely by those of us on the horizontal spike, both through increases in other forms of taxation and reduction of services.  The income tax originally taxed ONLY the vertical spike.  This is the direction tax reform needs to take if it is to be truly considered "reform."

• Can the people on the horizontal spike take control of their own destinies and truly make this a nation governed in the best interests of the people?   If so, how?

• Is the L-Curve "good" or "natural" or "inevitable"?  What are the alternatives?  The economy is a complex system, but it is essentially a human invention.  It can be "managed" (or influenced) in many ways.  If it is not managed intentionally, then it is managed (or manipulated) by those who hold political and economic power, typically to their own advantage.  It is not enough to create a strong economy.  It is just as important to ask how the benefits of the economy are distributed through the population.  A truly democratic society needs to find ways to manage the economy to benefit the population as a whole.  This is not being done. 

(snip)