Wall Street Journal columnist Daniel Henninger is calling the new budget the White House released last week “a work of literature.” He means no compliment.

Henninger and his fellow apologists for grand private fortune consider the new Obama budget a work of reprehensible public policy fiction, a blueprint for “large wealth transfers” that amount to an unconscionable tax on “national success.”

Henninger and friends need to get a grip. Those wealthy paragons of “national success” they so admire would survive quite comfortably the adoption of any or all of the Obama budget’s new taxes.

Indeed, even if Congress adopted every new tax this budget advances, not one wealthy American would next year face a top-bracket tax rate higher than 39.6 percent. Back in Ronald Reagan’s first term, income in America’s top bracket faced a 50 percent tax rate. The republic survived.

So why all the squeals of anguish out of right-wing fan clubs for rich people? Is the anger over the new Obama budget just more conservative political theater?

Not really. The tax proposals in the budget plan released last week actually do signal a turn — toward more genuine tax progressivity — on the part of the Obama White House. The right seems to sense that.

The tax proposals in the new Obama budget plan released last week signal a turn toward more genuine tax progressivity.

We can see this new White House turn in two proposals the budget for 2013 promotes, one narrow and quite specific, the other broad and vague.

The narrow pitch addresses dividend income.

Some background: The Obama White House has always supported the eventual expiration of the 2001 and 2003 Bush tax cuts for wealthy taxpayers. But the White House, until last week, has focused only on the Bush tax cut that sliced the tax rate on top income-bracket income from 39.6 to 35 percent.

Last week, for the first time, an Obama budget acknowledged that the Bush years had also cut the tax rate on dividend income down to 15 percent, from 39.6 percent. The Obama White House had previously let this tax cut slide.

Not anymore. The new Obama budget advocates an end to preferential tax treatment on the dividend income that goes to wealthy taxpayers. Couples making over $250,000 would under this new budget face a 39.6 percent tax rate on their dividends, the same as they did in the Clinton years.

Capital gains income, on the other hand, would continue to receive preferential treatment under the new Obama budget, only less of it. America’s wealthiest now pay just a 15 percent tax on the capital gains they make trading stocks and other assets, the main reason why they pay so little of their incomes in taxes. 

The new White House budget has a plan to offset the continuing preferential treatment for capital gains.

The Obama budget has this 15 percent capital gains tax rate rising only to 20 percent. But the new budget has a plan to offset this continuing preferential treatment for capital gains. Americans  “making over $1 million,” the budget proposes, “should pay no less than 30 percent of their income in taxes.”

The new Obama budget gives this “Buffett rule” no other specifics. This lack of detail doesn’t particularly matter one way or another right now, since Congress as currently constituted is not going to adopt the Buffett rule in any shape or form this year — and everyone on Capitol Hill knows it.

In this charged political environment, the new Obama budget essentially serves as a campaign manifesto, a declaration of where the Obama administration wants to go in a second term.

The big tax question on this declaration: Does the administration want to go far enough — toward its stated goal of “a simpler, fairer, more progressive tax system than we have today”?

The answer gets tricky. The Obama budget tax framework, if adopted, would no doubt leave the tax system significantly more progressive. A 30 percent millionaire minimum tax would all by itself have a substantial impact. In 2008, the last year with data available, the nation’s top 400 taxpayers only paid 18.2 percent of their incomes in federal income tax.

Add to this 30 percent Buffett rule the dividend tax hike and other proposals the White House reiterates in the new budget — the return to a 39.6 percent top-bracket rate, the repeal of the “carried interest” loophole that enriches hedge fund kings, a limit on the benefits the wealthy can claim from tax deductions — and the nation would have a distinctly more equitable and progressive tax code.

In 1953, taxpayers who made over $1 million paid far more of their incomes in federal tax than millionaires would pay under the new White House budget.

The effective tax rate on Americans who make over $1 million currently averages around 25 percent. In 2013, under the Obama budget, millionaires would likely average a federal income tax bill that equals somewhere between 30 and 35 percent of their incomes.

Not chopped liver. But not adequate either. The current White House tax vision for 2013 and beyond simply leaves too much money on the table — money the rich have siphoned off from America’s 99 percent, money that could be rebuilding the American middle class.

A little history can be useful here. In 1953, the heart of our middle class golden age, taxpayers who made at least $1 million — in today’s dollars — paid far more of their incomes in federal income tax than millionaires would pay in 2013 under the new White House budget. Our 1953 rich, after taking advantage of every loophole they could find, paid taxes at nearly a 55 percent effective rate.

But we don’t have to go back 60 years to find an American rich more heavily taxed than our rich would be under the new White House budget. Just 30 years ago, after the first round of Reagan tax cuts, millionaires ended up paying, after loopholes, nearly 39 percent of their 1983 incomes in federal tax.

The 2013 budget won’t get us back to 1983, much less 1953. But the budget does move us in the right tax direction. That counts. And, besides, any tax plan that really steams our guardians of “national success” does offer pleasures aplenty.

Comparing Tax Plans: Obama 2013, Reagan 1983, Ike 1953 is an article on Inequality.org.

Towers Watson, the corporate consulting powerhouse, last week shot out to clients a cheat sheet for dealing with that “unflattering headline about your company’s executive pay.”

Two years ago, lawmakers in Congress wrote into law a series of curbs on corporate executive pay practices.

This coming spring, the Towers Watson advisory counseled, be prepared for news articles that may “mislead the reader into thinking” that your corporate board is taking “actions that are not in shareholders’ best interests” — articles with headlines like “CEO Pay Rises Dramatically in 2011.”

The Towers Watson warning could hardly be more timely. The new annual CEO compensation reports will start appearing late next month, and all signs are pointing to another big corporate executive pay uptick, maybe as much as the 36.5 percent pay hike for top 500 CEOs reported for 2010.

Few analysts had expected this latest surge in executive pay. Two years ago, after all, lawmakers in Congress had written into law a series of curbs on corporate executive pay practices, as part of the widely celebrated Dodd-Frank Wall Street Reform and Consumer Protection Act.

Dodd-Frank’s executive pay provisions give shareholders more information — and say — over executive pay decisions. And they give regulators much more authority to quash lavish incentives that encourage reckless executive behavior.

So what went wrong? Why hasn’t Dodd-Frank slowed the CEO pay spiral? Is Dodd-Frank’s approach to CEO pay reform somehow fatally flawed?

Dodd-Frank’s most far-reaching CEO pay provisions still haven’t gone into effect.

No one really knows — for a simple reason. Dodd-Frank’s most far-reaching CEO pay provisions still haven’t gone into effect.

Who deserves the blame for this perverse state of affairs?

Courts deserve some. Last July, for instance, a U.S. Court of Appeals panel “vacated” a new rule federal regulators had prepared to put teeth into the Dodd-Frank provision that could help dissident shareholders challenge corporate directors who rubberstamp excessive executive pay awards.

But much of the blame rests on federal regulatory agencies themselves. These agencies have been flinching, ever since Dodd-Frank’s passage, under intense corporate pressure. Regulators are dragging their feet and shying away from any real exercise of the new authority Dodd-Frank gives them.

Last week, a U.S. Senate hearing flashed some light on that flinching.

The Dodd-Frank statute, Columbia Law School’s Robert Jackson told a Senate Budget subcommittee, entrusts in the Securities and Exchange Commission and other federal agencies “unprecedented authority to ensure that bonus practices never again endanger financial stability.”

Federal regulatory agencies have been flinching under intense corporate pressure.

Under Dodd-Frank, Jackson explained, regulators can “prohibit any bonus that gives bankers excessive pay.” But an initial set of Dodd-Frank regulations that federal agencies proposed last April, he noted, don’t even prohibit the most brazen of financial executive greed grabs, the “hedging” that financial executives do against their own company’s stock.

Executives hedge by placing bets in derivative markets that their firm’s share value will plummet — at the same time they’re stuffing their pockets with pay incentives to raise that value up ever higher. Hedging along these lines helped AIG insurance chief Hank Greenburg to $250 million when AIG collapsed in 2008.

On other Dodd-Frank executive pay provisions, the SEC and other federal agencies haven’t bothered to issue weak regulations. They’ve issued no regulations at all. The most glaring example: Dodd-Frank’s now infamous — in corporate circles — section 953(b).

This obscure Dodd-Frank provision, guided into law by Senator Robert Menendez from New Jersey, requires corporations to annually reveal their CEO pay, the pay of their median employee, and the ratio between the two.

Menendez had a simple goal in mind. He wanted all shareholders — and all Americans — to know how much individual CEOs make as a multiple of what their typical workers take home. Corporate boards of directors do not currently have to reveal this information.

One Dodd-Frank provision requires corporations to annually reveal their CEO pay, the pay of their median employee, and the ratio between the two.

Corporate execs and lobbyists didn’t see this Menendez mandate coming. They were too busy working to water down various other elements of the pending Dodd-Frank package to notice. Now they’re mobilizing feverishly to stop the pay ratio disclosure Dodd-Frank mandates.

In the House of Representatives, these power suits have engineered Financial Services Committee approval of a bill that would repeal the Menendez mandate. But that repeal is going nowhere in the current Senate. Corporate America’s plan B: Push the SEC to delay the release of the rules needed to enforce the pay ratio disclosure mandate — until the Senate changes.

Last month, 23 top national business groups — a heavy-hitter line-up that included the U.S. Chamber of Commerce and the CEO all-star Business Roundtable — sent SEC chair Mary Schapiro a letter urging the SEC to “resist rushing into proposing regulations.”

The agency has so far resisted any urge to rush quite nicely. President Obama signed Dodd-Frank into law in July 2010. The spring 2011 annual corporate meetings came and went without any pay ratio disclosure rules on the books. The spring 2012 annual meetings will come and go the same way.

And so might the spring 2013 corporate annual meeting season, since the SEC still hasn’t set any firm deadlines for getting the needed disclosure rules written.

Endless SEC footdragging has public interest watchdogs up in arms.

This endless SEC footdragging has public interest watchdogs up in arms. Americans for Financial Reform, an umbrella group that includes the AFL-CIO, is calling the corporate call for more disclosure rule discussion a cynical move “to stifle the rule, not to enhance the rulemaking process.”

Lawmakers supporting pay ratio disclosure are pushing back, too. Representative Keith Ellison, a Democrat from Minnesota, last week began collecting lawmaker signatures for a letter pressing the Securities and Exchange Commission to move forward with dispatch on the ratio rule-writing process.

In 1980, notes Ellison, major U.S. CEOs averaged $624,996 in annual pay, about 42 times the pay of typical American factory workers. By 2010, big-time CEO pay had jumped to $10.8 million, or 319 times median worker compensation.

“Section 953(b) was intended,” says Ellison, “to shine a light on figures like this at each company.”

At last week’s Senate Banking subcommittee hearing, senator Sherrod Brown from Ohio stressed that protecting U.S. taxpayers must mean “putting an end to risky compensation packages that allow Wall Street to reap all the rewards when times are good, but stick taxpayers with the bill when things go bad.”

Not everyone on Capitol Hill agrees. The ranking Republican on the Senate Banking subcommittee that Sherrod Brown chairs, Senator Bob Corker from Tennessee, is feeling no angst about the nonexistent enforcement of Dodd-Frank’s most important curbs on executive pay excess.

Corker last week declared that the Dodd-Frank regulations were “working.” We have “to be careful” on executive pay, Corker added, what with “populism running rampant” and people taking “about the 1 percent and the 99 percent.”

Why do we have to be careful? Any overly enthusiastic clampdown on executive pay, Corker would go on to explain, might have our nation’s finest CEOs pick up their marbles and go someplace else. Warned Corker: “Populism can drive a lot of talent out we want to see in the system.”

The same talent, presumably, that crashed the U.S. economy.

How Power Suits Subvert the Law of the Land is an article on Inequality.org.

But Congress is once again going to sell federal workers down the river.

If the proposed deal goes through Congress and is signed by the President, the employee-contribution portion of the Social Security tax will remain at the current 4.2% reduced rate through the end of 2012.

It will return to the normal 6.2% rate in 2013, unless the reduced rate is extended again or made permanent after the November elections.

To pay for this reduced rate, Congress plans to cut government contributions to federal worker retirement plans.

In other words, all workers will pay less for their Social Security retirement pensions, but federal workers will pay more for their government employer retirement pensions.

The amount of money at stake in the federal pension contributions is only a small sliver of the money involved in the Social Security tax cut.  Federal workers aren’t being targeted because it will make a real difference to the deficit.

Federal workers are being targeted out of pure mean-spiritedness.

Federal worker pay has already been frozen for 2011 and 2012.  Meanwhile consumer prices rose on average 3.0% in 2011 and is likely to rise further in 2012.  That means that federal worker pay is falling farther and farther behind inflation.

In real terms, federal workers have already taken a serious pay cut, and now their pensions are on the line as well.

In real terms, federal workers have already taken a serious pay cut, and now their pensions are on the line as well.

It’s not like we can’t afford to pay our civil servants.  In actual dollars (not adjusted for inflation) US gross domestic product (GDP) rose 4.2% in 2010 and 3.9% in 2011.  Federal worker pay could have risen at the same rate with no damage to the economy.

Instead, federal workers are being told to take what is in real terms a pay cut at the same time that the country is getting a tax cut.  That’s just not right.

There’s a better, fairer way to pay for the Social Security tax cut: extend Social Security taxes to cover all income.

Currently, people pay no Social Security tax on wages over $110,100 and no Social Security tax at all on non-wage income.  Extending Social Security taxes to cover all income would more than make up for the reduction in rate to 4.2%.

The fair way to reduce the tax rate is to expand the tax base.  Make everyone pay a little instead of making a few people pay a lot.

And don’t drag federal worker pay into the debate.  If you think federal workers are overpaid, go apply for a federal job.  There are no waiting lists.  Federal workers have it hard enough without Congress playing politics with their paychecks and pensions.

Federal Workers Should Not Have to Pay for the Social Security Tax Cuts is an article on Inequality.org.

By Salvatore Babones

Levels of income inequality in America today are running at record levels. Activists from the Occupy movement have placed rising inequality firmly on the national agenda, and inequality looks to figure prominently in the 2012 election campaigns.

The Gini coefficient was first defined in a 1912 paper by an Italian economist.

All this makes inequality statistics suddenly newsworthy, but how do statisticians measure something as slippery as inequality? Some people obviously have more than others, but how does that difference translate into numbers that represent the level of inequality for an entire society?

Anyone following the inequality debate so far has probably heard of the Gini coefficient. America’s Gini coefficient is 46.9. Or 37.0. Or maybe as high as 57.4. Really, it depends who you ask.

The Gini coefficient was first defined in a 1912 paper by the Italian economist Corrado Gini (1884-1965). The coefficient measures the degree the degree of concentration in a country’s income distribution. Social statisticians today use many different inequality measures, but none more than the Gini coefficient.

The Gini coefficient amounts to a kind of percentage and can run from 0 to 100. A Gini of 0 represents 0 percent concentration in a country’s income distribution. In a country with a Gini coefficient of 0, everyone receives exactly the same income.

A Gini coefficient of 100 represents 100 percent concentration in a country’s income distribution. In a country with a Gini of 100, one person receives all of the country’s income. Everyone else gets nothing.

The official Gini coefficient for the United States has shot way up from the all-time low set in 1968.

In between 0 and 100, Gini coefficients are harder to interpret. A Gini coefficient of 50 represents 50 percent concentration in a country’s income distribution. What does it mean to have 50 percent concentration in a country’s income?

A Gini of 50 could mean that half the people share all of the income while the other half get nothing. In other words, a country that literally consisted of haves and have-nots in a 50-50 split would have a Gini coefficient of 50.

This scenario, of course, isn’t very realistic. Everyone, no matter how poor, has to have some income to live. There are no literal have-nots.

We could also have a Gini coefficient of 50 with the top 10 percent of a country’s population very well-off, the next 50 percent more or less equal, and the bottom 40 percent very poor.

With some fiddling around the edges, that’s more or less the situation in America today.

According to the Census Bureau, the official Gini coefficient for the United States was 46.9 in 2010, the most recent year with data available. This is way up from the all-time low of 38.6 set in 1968.

Income inequality statistics can differ depending on how income is defined.

Gini coefficients can be used to measure the concentration of any distribution, not just the distributions of income. Higher concentrations translate into higher inequality. Lower concentrations mean lower inequality.

For example, wealth inequality in America runs much higher than income inequality. New York University economist Edward Wolff estimates the Gini coefficient for household wealth — net worth — in the United States to be 86.5, based on 2009 data. That’s much higher than any income inequality estimate.

Leaving aside wealth and other forms of inequality, even income inequality statistics can differ depending on how income is defined.

The most common definition of income used by the Census Bureau and other statistical agencies is total money income of a household, excluding capital gains. All of the members of a household are assumed to share in the household’s combined income.

Household income includes wages, salaries, interest, dividends, alimony payments, child support, Social Security payments, and any other cash transfers. It doesn’t include food stamps, Medicare, or other non-cash benefits.

A major gap in the measurement of income inequality is the exclusion of capital gains, profits made on increases in the value of investments. Capital gains are excluded for purely practical reasons. The Census doesn’t ask about them, so they can’t be included in inequality statistics. 

Real levels of income inequality in America run much higher than the official Census Bureau figures would suggest.

Obviously, the rich earn much more from investments than the poor. As a result, real levels of income inequality in America are much higher than the official Census Bureau figures would suggest.

Edward Wolff, working with Federal Reserve Board data that included capital gains, but not government transfer payments, put the figure at 57.4 for 2006.

How does America’s Gini coefficient compare to those of other countries? Comparative data on income inequality are reported by the Organisation for Economic Cooperation and Development.

The OECD reports three different Gini coefficients for the United States and other countries (see accompanying table). The first covers the Gini coefficient for wages earned from work. The second traces overall income inequality. The third measures inequality in total living standards, including government-provided health and education benefits.

According to the OECD, the Gini coefficient for income inequality in the United States is just 37.0. The OECD is highly secretive about its methodologies, so it’s impossible to know why this is so different from the official figure of 46.9 reported by the U.S. Census Bureau.

Whatever exact procedures the OECD uses, it claims to use the same procedures for all countries. According to the OECD, the Gini coefficient for wages is highest in Italy (46.5) and the United Kingdom (45.6). The United States comes in third-highest out of the 18 developed countries for which data are available.

Including the value of government-provided health and education benefits makes the United States look even more unequal compared to other developed countries.

After other sources of income are included, however, the United States is by far the most unequal of all 18 countries. The United States (37.0) is well ahead of number two Portugal (34.7) and number three United Kingdom (34.5).

The United States scores worse mainly because Social Security, unemployment insurance, and other cash benefits in the United States contribute much less to income than comparable programs in other countries.

Including the value of government-provided health and education benefits makes the United States look even more unequal compared to other developed countries. In this final comparison the U.S. Gini coefficient (30.3) is still worse than number two Portugal (29.1) and far worse than number three Italy (26.2) and all other developed countries.

By this last measure, the most equal countries in the world are the usual suspects: Denmark (19.4), Norway (19.3), and Sweden (18.1).

So is America’s Gini coefficient 46.9 (Census Bureau), 37.0 (OECD), or 57.4 (Edward Wolff based on Federal Reserve data)? It depends what you mean by income. If by income you mean all the money that households get from all sources, including both government transfers and capital gains, then it’s probably around 50, give or take a point.

So we’re right back to the haves and have-nots. That we’re a society of haves and have-nots may not be literally true, but it’s more than just a metaphor. America is suspended roughly half-way between full equality and a situation in which all of the country’s income is concentrated in one person’s hands.

In other words, we’re half-way between a socialist utopia and an absolute monarchy. America in 1968 was hardly a socialist country, but it was much closer to the utopia. Maybe it’s time to turn back the clock on income inequality. Utopia doesn’t sound so bad.

U.S. Income Distribution: Just How Unequal? is an article on Inequality.org.

We’ve been hearing arguments like these since the 1980 election, when Ronald Reagan beat Jimmy Carter on a platform of reducing taxes on the wealthy. They were wrong then, and they’re wrong now.

The truth is that taxes on investors and the wealthy are lower now than at any time since the 1920s.  They hit rock bottom in the 2000s.

Our slowest-growth decade since the 1920s?  The 2000s.

Growth was even slower in the 2000s than in the 1930s.  That’s right, slower than during the great depression.

America’s taxes on the wealthy have been at historically low levels for thirty years now, but job creation is lower than ever.  For the past five years there’s been no job creation at all.

The economy has been creating jobs at slower and slower rates since the end of the 1970s.  It may seem hard to believe, but the 1970s were actually a jobs paradise compared to today.

Growth was even slower in the 2000s than in the 1930s.

Jobs growth was faster in the 1970s — when taxes on the wealthy were 70% — than they have been at any time since.  The 1970s were even better than the 1990s.  It’s only by today’s low standards that the 1990s seem like they were such a good time.

The solution?  Raise income taxes.  Raise them on everyone, but most of all raise them on the wealthy.

Why do high taxes on the wealthy bring more jobs for the rest of us?  It’s all a matter of what people do with their money.

The wealthy don’t live in our economy.  They live in a Plutonomy all their own.  Most of their income gets spent on two things: investment and luxury goods.

Today, in the fifth year of a recession that’s turning into a new Great Depression, luxury goods sales are at an all-time high.  That’s the Plutonomy.  The Plutonomy is not in recession.

But the wealthy also invest.  Does this investment create jobs?

It does, but it doesn’t create American jobs.

In today’s global investment markets money follows the highest returns.  With China growing at 10% to our 2%, the higher returns are in China.  That’s where the investment flows.

When you tax high incomes, you take money that would have been invested globally and give it to the government to spend, and almost all government spending is in the United States.

Taxing high incomes also puts a damper on luxury consumption.  That’s a side effect we can live with.

Should the poor and working class also pay higher income taxes?  You betcha.  Everyone shared in the Bush tax cuts, rich and poor alike.  Everyone can afford to go back to 1999 levels of taxation.

Tax and spend. Those three dirty words are now the key to economic recovery in America’s Realonomy.

But down in the working class Realonomy of the American economy there’s not much income tax to be paid because there’s not much income.  That has to change.

Give the poor more income and in return let them pay a little more tax.  That’s a fair deal.

How do we get them that income?  Tax and spend.

Take the money people would invest in China, take the money that people would spend on that extra TV for the kids’ bedroom, and spend it on things we really need.

Tax and spend, so we can have high-quality schools with low student-teacher ratios.  Tax and spend, so we can have pleasant, attractive national parks.  Tax and spend, so we can send put people to work helping our elderly and disabled live more fulfilling lives.

That’s right.  “Tax and spend.”  Those three dirty words are now the key to economic recovery in America’s Realonomy.

Get out the bleach.  It’s time to tax and spend our way to recovery.  Sometimes the simplest solutions are the right ones.  This is one of those times.

To Grow the Realonomy, Tax and Spend is an article on Inequality.org.

Life sometimes imitates art. Life also sometimes imitates political cliché. The cliché in this case: the notion that tunnel-vision political reporting has reduced campaigns for American public office to nothing more than mere “horse races.”

The super PAC run by Romney cronies has collected $1 million from 10 men of immense means.

This year, in the struggle for the Republican Presidential nomination, that “horse race” analogy has essentially become a literal reflection of reality.

The real horse racing industry follows a simple time-worn pattern: A wealthy connoisseur of horse flesh buys a thoroughbred. The wealthy connoisseur keeps racing that thoroughbred until the connoisseur loses interest.

In the current GOP Presidential “horse race,” we see the exact same pattern. Wealthy connoisseurs of political talent pick a candidate. These wealthy connoisseurs then keep that candidate racing until they lose interest.

Foster Friess, a billionaire mutual fund executive, hasn’t yet lost interest in Rick Santorum. Friess has personally bankrolled the “super PAC” that has enabled Santorum to stay in the primary hunt.

Sheldon and Miriam Adelson, the billionaire casino mogul couple, haven’t yet lost interest in Newt Gingrich. The Adelson family has single-handedly supplied $10.5 of the $12 million that has gone into the super PAC that’s keeping Gingrich in the nominating race.

Super PACs are now playing a larger role in politics than the candidates’ own personal campaigns.

Mitt Romney, meanwhile, is leading that race, but only because he has more billionaires on his side than anyone else. Four of these billionaires from the hedge fund industry — Paul Singer, Julian Robertson, Robert Mercer, and John Paulson — have each contributed $1 million to the cause of Mitt.

In all, the super PAC run by Romney cronies has collected $1 million from 10 men of immense means, $2 million from one other, and at least $100,000 each from almost 40 additional politically inclined super rich, more than enough to fund the $17 million TV ad campaign that bounced Romney into the nomination lead.

This White House horse race isn’t going to end, of course, until November. By that time, news analysts are predicting, total spending on the 2012 Presidential race will have likely reached over $2 billion, making this year’s election the most expensive in the history of the known universe.

Super PACs — quasi “independent” committees that can accept donations of unlimited size — will do the bulk of that spending. These super PACs, the Los Angeles Times noted last week, are now playing a larger role in politics than the candidates’ own personal campaigns, mainly because candidate campaign committees can accept no donation larger than $2,500.

A string of court decisions have made that $2,500 limit a dead-letter elsewhere across the political landscape. Wealthy individuals and the corporations they run can now contribute as much as they want to political committees that maintain a nominal “independence” from the campaigns of the candidates they support.

The wealthy are shoveling even more of their loot into politics than the disclosures that came out last week indicated.

These super PACs do have to disclose their donors, and the latest disclosures came last Tuesday. But the disclosures now required leave a good chunk of the campaign finance scene in the dark. Super PACs have been setting up subsidiaries that can qualify for nonprofit status so long as less than half their money goes to politics. These “nonprofits” don’t have to reveal their donors.

The bottom line: The wealthy are shoveling even more of their loot into politics than the disclosures that came out last week indicated. In effect, says Campaign Legal Center policy director Meredith McGehee, we have entered “a world of unlimited money in politics.”

In this world, she adds, “those who can marshal enormous amounts of wealth” can “drown out the voices of the average Americans.”

Those who do this marshaling, for their part, never fail to emphasize the nobility of their political engagement. Take, for instance, Harold Simmons, the Dallas billionaire who has dropped $8.6 million into super PACs backing an array of rich people-friendly candidates and causes over the last year.

“Mr. Simmons is a passionate conservative, and he has been for quite some time,” his spokesman, Chuck McDonald, told the press last week.

MacDonald went on to add that Simmons — a leveraged buyout king now worth an estimated $9.6 billion — has no specific policy agenda in mind when he’s making his contributions. He simply believes “in conservative ideology.”

This conservative ideology that has Simmons so passionately committed just coincidentally meshes up quite nicely with the huge payoffs deep pockets like Simmons can ensure themselves via victory on election day.

Just one political decision alone — the tax treatment of so-called “carried interest” — can make an annual difference of tens and even hundreds of millions of dollars for Simmons and his fellow billionaires. Consider the biggest superstar in the hedge fund firmament, Romney-backer John Paulson, a Wall Street whiz who pocketed $4.9 billion in 2010 and another $3.7 billion in 2007.

Most of Paulson’s hedge fund income comes as “carried interest” subject to just a 15 percent federal capital gains tax rate, a tax rate well below the 35 percent top marginal rate on “ordinary” income.

In other words, the preferential tax treatment for carried interest all by itself saves hedge fund types like Paulson $20 million on every $100 million in carried interest income they collect.

Republicans in the Senate, with some Democratic help, have repeatedly blocked attempts to repeal this preferential treatment over recent years. But the Democratic senator who has been the most pivotally hedge fund-friendly, Chuck Schumer of New York, now says he’ll vote to repeal the carried interest loophole.

That makes the occupant of the White House all the more important to wheeler-dealers like John Paulson and his friends.

“Of course these guys are going to give a million dollars,” as U.S. senator Al Franken from Minnesota noted last week. “What a bargain — what a bargain to give that to a candidate who they know will veto a bill that makes the carried interest subject to the top” income tax rate.

All the major GOP candidates have so far pledged their fealty to the cause of keeping carried interest exempt from the ordinary top tax rate. That shouldn’t shock anyone, given last week’s super PAC campaign contribution disclosures.

What should shock? That America’s billionaires — given how much at tax time the 2012 horse race could cost them in carried interest income alone — aren’t giving super PACs even more than they already have.

America’s Plutocrats Play the Political Ponies is an article on Inequality.org.

Federal worker pay has already been frozen for 2011 and 2012.  Meanwhile consumer prices rose on average 3.0% in 2011.  The Federal Reserve Board’s target inflation rate for 2012 and 2013 is 2.0%.  That means that real federal worker wages have fallen 3.0% already and will fall a further 2.0% this year.

If the House of Representatives gets its way, real federal worker pay will fall a cumulative 7.0% in real terms by the end of 2013.

President Obama, on the other hand, is asking for a 0.5% raise for federal workers in 2013.  Even under the “socialist” Obama plan, federal workers will take a 6.5% cumulative cut in real pay by the end of 2013.

To put this in perspective, top corporate executive pay rose, on average, 36.5% in 2010 alone.  Figures for 2011 are not yet available.

Even under the “socialist” Obama plan, federal workers will take a 6.5% cumulative cut in real pay by the end of 2013.

Leaving aside corporate executives, there’s one big reason why federal worker pay shouldn’t go down in a recession: it doesn’t go up in a boom.

Many private sector professionals got great raises and big bonuses in 2006 and 2007.  No one except executives and bankers is getting a bonus this year, but base salaries still reflect those historical increases.  Pay goes up in good times and stagnates in bad times.

Bonuses for federal workers in 2006?  0.0%.  Bonuses for federal workers in 2007?  0.0%.  Raises for federal workers in those two years?  Less than inflation.  Federal workers live in the Realonomy with the rest of us, not in the Plutonomy of the bankers and executives.

In fact, federal worker pay for any given position has never risen more than 4.8% in a single year since 1980.  Back in 1980 it rose 9.1%.  Consumer prices that year rose 13.4%.

When federal workers start getting outrageous bonuses in good times, it’ll be fair to freeze their pay in bad times.  Until then, it simply isn’t.  Share the wealth, share the pain.  Don’t, don’t.

Bonuses for federal workers might be a good idea, but I don’t expect to see them in my lifetime.

The people who want to cut federal worker pay — and this includes the President, who has effectively supported a 6.5% cut in real pay over three years — justify the cuts by pointing to the budget deficit.  They say there’s no money.

As executive and banker bonuses show, the money is there.

When federal workers start getting outrageous bonuses in good times, it’ll be fair to freeze their pay in bad times.

In actual dollars (not adjusted for inflation) US gross domestic product (GDP) rose 4.2% in 2010 and 3.9% in 2011.  If these gains had been distributed absolutely equally throughout the economy, federal workers should have received raises of 4.2% in 2010 and 3.9% in 2011.  They got 0.0% and 0.0%.

Someone is getting the raises.  Those GDP increases went somewhere.  They didn’t disappear into thin air or get exported to China.  They represent the increase in US national income after all those payments to China.

The truth is that it’s not about the availability of money.  It’s about the distribution of money.  For bankers and executives in the Plutonomy to get 20% and 30% raises, someone in the Realonomy has to get no raise at all.  Lately, that someone has been the federal worker.

People, it’s not that hard.  You don’t need calculus, a Ph.D., or a background in macroeconomics.  The economy grew 4.2% in 2010 and 3.9% in 2011.  Where are the federal worker raises?  Where are your raises?

Ask the bankers and executives.  Ask your boss.  Don’t balance the budget on the backs of federal workers.  Maybe you’ve had things even worse than them, but that’s not their fault.  Blame the people who got the outrageous bonuses, not the people who didn’t.

Outrageous Bonuses for Federal Workers is an article on Inequality.org.