Economic Justice

Introduction

Nowadays, it can’t be deny that most countries around the globe are experiencing economic crises. Even the United States of America, thought to be the place of a greener pasture, experiences these kind of crises and tries to make effective solutions in how to resolve such  problems. It is very much noticeable and obvious that most of the people around the world are suffering from starvation, hardships in how to meet their daily needs and the prejudices regarding with wealth, power, and a means of approaching to basic necessities. According to a researched made by the American Friends Service Committee, it stated that there are 1.2 billion people live in intense poverty.

In America, there are 45 million Americans without any health insurance and one in three cannot have a decent housing. In 1996 up to 2000, there were more than 60 percent of U.S. corporations didn’t pay federal taxes. The median weekly wage for an American worker was $625 when the total net worth of America’s 400 wealthiest individuals reached to $955 billion.

The American Friends Service Committee continued that the real essence of economic justice is to build a fair economy that will work for every individual; which means fair trade policies that give protection and security to workers’ rights to arrange and to acquire a living wage for their work at home and abroad.  It also includes budget and tax policies in which corporations and wealthy individuals pay their fair share, that extend support to good schools and childcare, pay affordable healthcare and housing, retirement security and a safety-net for those in need (See “Learn About”. American friends service committee).

Paul Nagle commented in his article that ‘ the International Monetary Fund and the World bank are the reasons that many of the world’s poverty-stricken nations are still very poor after export and other conventional forms of internal revenues’ (See P. Nagle, “Economic Injustice?” The IMF & World Bank).

*Poverty*

            In an article written by Isabel V. Sawhill, she commented that poverty is one of America’s most persistent and serious dilemmas in the country. The United States produces more per capita than any other industrialized country and presently devoted more than $500 billion per year or about 12% of its gross national product- to public assistance and social insurance programs like Aid to families with Dependent Children (AFDC), Social Security, Food stamps, Medicare, and Medicaid. Despite of United States’ wealth and with these mentioned efforts to bring down income inequality, poverty is more happening frequently in United States compared to any industrialized countries in the world.

There were 33.6 million Americans who were poor in 1990 which almost 14 percent of the population that which was conducted by the Bureau of Census. Isabel V. Sawhill continued that since World War II, another problem with the poverty measure arises from the dramatic shift in household composition. There are smaller but more fragmented households are more common nowadays than in the past few years which means that some poor households were formed voluntarily for the sake of privacy and autonomy for their members. To some degree that several people have willingly sacrificed their access to the economic resources of spouses, adult children or parents and some of the increase in poverty may actually represent a development in well-being.

Moreover, Sawhill added that the incidence of poverty also higher among households headed by women. Though in 1959, the poverty rate among these households decreased from 4.9 percent to 37.2 percent in 1990; they remain far more likely to be poor than other types of households. This higher incidence of poverty, together with the rising share of households headed by women has led to what the researchers call the “feminization of poverty” with an increasing fraction of the poor in female-headed households.

This fraction arose from 17.8 percent to 37.5 percent in the middle of 1959 and 1990. The immediate growth of households headed by women and unrelated individuals has left a larger share of the population in poverty (See I.V. Sawhill, “Poverty in the United States”. The library of economics and liberty. The concise encyclopedia of economics.)

            In an article published by the infoplease website showed that in 2003, the poverty rates for the Northeast was 11.3 percent, Midwest was10.7 percent, South was 14.1 percent, and in West was 12.6 percent all were unchanged from 2002, leaving the South with highest rate. Two of the four regions have shown increases in the number of people in poverty from 2002 up to 2003 which the number in the Midwest had risen from 6.6 million to 6.9 million and the number in the South had risen from 14.0 million to 14.5 million (See “Poverty in the United States”. Infoplease: All the knowledge you need).

            In a researched conducted by Robert E. Rector, September 15, 2004, showed that on August 26 of the said year, the U.S. Census Bureau released its annual poverty figures which show the percentage of persons who are poor rose from 12.1 percent in 2002 to 12.5 percent in 2003. He added that poverty is a lagging economic indicator. Formal recessions usually last less than a year. On the other hand, he added that the poverty rate almost always continues to rise for several years after the recession ends. In November 2002, the last recession officially ended but poverty rate did not stop to rise in two subsequent years which was in 2003 and 2004.

The latest recession was comparatively mild and had a limited effect on poverty especially in child poverty. In the recession that was started in 1980, the poverty rate of all individuals rose by 3.3 percent over three years. The impact of the latest recession on child poverty has been modest. Below are illustrations made by Robert Rector (See R. Rector, “Understanding Poverty and Economic Inequality in the United States”. Research welfare. September 15, 2004).

            In a speech given by made by Roberta Spivek, September 14,2003, she declared that there were two wars which the United States was  presently engaged in which were the war in Iraq and the war at home. She viewed poverty as a quieter war that involves violence and the society’s indifference to it. She also compared poverty like a war because poverty can kill or main individual.

She added that its victims are mainly civilians and the most vulnerable are the children trapped in poor schools, battered women, immigrants who don’t speak the language, and older adults living on a Social Security check. The poverty in United States rarely generates a heated public debate and it motivates few demonstrations especially by the middle class and no candlelight vigils (See R. Spivek, “The Violence of Poverty: Remarks to Chestnut Hill Friends Meeting”. American friends service committee. September 14, 2003). The graph below was taken from wikipedia, the free encyclopedia.

            The National Center for Children in Poverty has their studies about the low-income children in the United States as of 2004. They found out that ‘more than 1/3 of the children in the United States live in low-income families which means their parents earn up to double what is considered poverty in the said country. The federal poverty for a family of four in 2004 was $18,850, thus- 16 percent of American children or more than 11 million lived in poor families in 2002 which means their parents’ income was at or below the federal poverty level. These parents are typically unable to provide their families with basic necessities like stable and decent housing and reliable child care.

There were about 37 percent of American children or more than 26 million lived in low-income families in 2002. Their parents made less than 200 percent of the federal poverty line (FPL). These families were prone to face material hardships and financial pressures just like for those families who are officially counted as poor. Most children in low-income families have parents who are employed full-time and year around. There were 56 percent of all children in low income-families or 14.6 million who have at least one parent who works full-time and year around.

There were about 28 percent in low-income families or 7.3 million who have at least one parent who works part-time or full-time, part year and just 16 percent or 4.2 million who do not have an employed parent. The Northeast and Midwest, children in urban areas are more likely to live in low-income families and in the South and West, children in rural areas more similarly to live in low-income families. (See National Center for Children in Poverty. “Low-Income Children in the United States (2004)”.).

            On the other hand,  the incontext Indiana website ( November 2000) showed the condition of Indiana. It stated that Indiana had the third-lowest poverty rate in United States according to the United States Census Bureau. On average in 1997 up to 1999, Indiana residents lived in poverty. Nationally, poverty afflicts 12.6 percent of the population or 34.4 million people. There were about 34.4 million equals the entire population of Indiana times six, and they all live in poverty. Looking closer to home, Indiana has the fewest number of people in poverty compared to its surrounding states. This figure below was made by State of Indiana and Indiana University Partnership for Economic Development.

Poverty levels by state are often used to distribute federal funding for programs such as the Children’s health Insurance Program, head Start and the National School Lunch Program. Workforce-development Block Grant allocations are also influenced by state poverty rates. These programs are far more effective at redistributing to the nation’s wealth than changes to the people’s tax structure according to the Census Bureau’.  (See Incontext State of Indiana and Indiana University Partnership for Economic Development. “Poverty in the United States”. Vol. 1, No. 10. November 2000).

*Inheritance*                                                                                                                                              Barry W. Johnson and Martha Britton Eller advocated the topic about inheritance and taxation. They said that most of the 20^th history and key points throughout American history, the Federal government has relied on estate and inheritance taxes sources of funding. In 1916, the modern transfer tax system was introduced which provides revenue to the Federal government through taxes on transfer of property between living individual as well as through a tax on transfer of property of death. Opponents claim that transfer taxation creates a disincentive to gather capital and is detrimental to the growth of national productivity.

The controversy over the role of inheritance in democratic society and the property of taxing property at death is not new, but rooted firmly in arguments that raged since Western society joined from its feudal foundations. Central to both historic and current debate is the divergent characterization of inheritance as either a “right” or a “privilege”. They traced the American ideas concerning the rights of individuals in the new republic from the writings of English philosopher John Locke. Writing in the last half of the 17^th century, Locke suggested that each citizen was born with certain natural or God-given rights. Citizens have a right to own as much property as they could employ their labor upon but not to own excessive amounts at the expense of the rest of the society.

Moreover, B. W. Johnson and M. B. Eller added that in the years immediately preceding the War Between the States, revenue from tariffs and the sale of public lands provided the bulk of the federal budget. Inheritance taxes were a source of revenue for many States. At the beginning of 19^th century, Supreme Court Justices John Marshall and Joseph Story defended an individual’s natural right to own a property. Nevertheless, their belief that inheritance was a civil and not a natural right affirmed the States’ right to regulate inheritances. The advent of the Civil war again forced the Federal government to look for additional sources of revenue and a federal inheritance tax was enacted in the Tax Act of 1862.

Even this issue is the source of controversy; the inheritance tax was commended in the Congressional Globe as a “large source of revenue, which could be most conveniently collected”. The repeal of the Civil War inheritance tax was accomplished with little public notice. Then again, inheritance and the responsibility of government to ensure equal opportunities for its citizenry would invoke extreme debates by the close of the century.

IN America, the populist movement was also calling for limits on inheritance and changes in tax laws to make very wealthy ‘pay their fair share.’ In spite of those controversies and extreme debate, the inheritance tax was made law by the War Revenue Act of 1898. A duty on the estate itself, not on its beneficiaries, the 1898 tax served as a precursor to the present Federal estate tax Rates of tax ranged from 0.75% to 15% which depend both on the size of the estate and on the relationship of legatee to decent (See B. W. Johnson and M. B. Eller, “Federal Taxation of Inheritance and Wealth Transfers”).

*Practical Ethics*

            An article published by NHBA Ethics Committee in a website, November 1997, stated that ‘the Ethics committee recently was asked to give an opinion on whether it is allowable under the New Hampshire Rules of Professional Conduct for an attorney to advertise that he or she is a “million dollar advocate” or is a member of the “Million Dollar Advocates Forum”. The committee decided to address the issue in the form of practical ethics article because it has not previously addressed the issue as to the propriety of certain advertising under the Professional Conduct Rules (See NHBA Ethics Committee. “Lawyer Advertising: Million Dollar Advocate”. November 1997).

References

1. “Learn About”. American friends service committee.

                       http://www.afsc.org/economic-justice/learnabout.htm

2. Sawhill, I.V., “Poverty in the United States”. The library of economics and liberty.

                       The concise encyclopedia of economics. Http://www.econlib.org/library/

                        enc/povertyintheUnitedStates.html

3. Rector, R., “Understanding Poverty and Economic Inequality in the United States”.

                        Research welfare. September 15, 2004.

                        Http://www.heritage.org/research/welfare/bg1796.cfm

4. Spivek, R., “The Violence of Poverty: Remarks to Chestnut Hill Friends Meeting”.

American friends service committee. September 14, 2003

Http://www.afsc.org/economic-justice/TheViolenceofPoverty.htm

5. Johnson, B. W. and Eller, M. B., “Federal Taxation of Inheritance and Wealth

                                    Transfers.” Http://www.irs.gov/pub/irs-soi/inhwlttr.pdf.

6. “Poverty in the United States”. Infoplease: All the knowledge you need.

                                    Http://www.infoplease.com/ipa/A0104520.html

7. Nagle, P., “Economic Injustce?” The IMF & World Bank.

                                    Http://www.subboard.com/generation/articles/97301346092363.asp

8. NHBA Ethics Committee. “Lawyer Advertising: Million Dollar Advocate”.

                                     November 1997. Http://www.nhbar.org/pdfs/peat11-97.pdf.

9. National Center for Children in Poverty. “Low-Income Children in the United States

                         (2004). Http://www.nccp.org/pub_cpf04.html

10. Incontext State of Indiana and Indiana University Partnership for Economic

                                     Development. http://www.incontext.indiana.edu/2000/

 november00/news.html