Custom «Park Avenue» Essay Paper

Introduction

An Upward Income Distribution due to the Social Welfare Policies, based on the Tax Cut Programs

The film “Park Avenue: Money, Power and American Dream”, directed by Alex Gibney, criticizes the main conceptual point, regarding the chances of success and presence of opportunities to end one’s life in the better social class, owing to one’s hard work and decidedness (Gibney, 2012, 1:56). The filmmaker sets the concept in the environment of the monopoly game, where the rich players achieve success faster and come to understand that they deserve it (Gibney, 2012, 5:11). The film’s hypothesis about income inequality, when the gap between the rich and poor is symbolized as a Grand Canyon, is explained by the declining of the share of middle-class income from 81% to 18 % in almost three decades (Hacker & Pierson, 2010, p. 15). The tax cut program, whose artificial initiatives aimed for the public good, was launched, due to its political feasibility and slashed fair opportunities of the average Americans to compete, in order to survive (Bartels, 2008, p. 15).

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Moreover, the filmmaker states that hyper concentration of  income at the top 1% became a major concern, due to the reduction of the social mobility with the highest unemployment rate of 0,47 among other industrial democracies (Gibney, 2012, 7:50).

Furthermore, submerged tax policies did not function through the lobbying of the free market economic ideas, but through the Americans’ voluntary subsidizing of the private sector (Mettler, 2011, p. 18). Political scientists argue that effectively promoted public subsidization followed by reduction of the regular tax rates, and subsequent decreasing of the household value, will increase a gap between the owners and renters (Mettler, 2011, p. 24).

Therefore, the film’s main idea is based on the concept of promotion of the artificial social welfare policies to the Congress that positions the citizens unaware of the reform’s efforts and relinquishes a large portion of their income for the amorphous benefits of 740 Park Avenue billionaires (Gibney, 2012, p. 19:50).

Exploitation of the Lower-Class’ Income through Individuals’ Subsidizing of the Private Sector

The film supports the idea that the current tax policy did not only allow over 400 richest people to have more control over the country’s economy that 150 million people have, and in addition, contributed 2,9 million to the national debt during George W. Bush’s administration (Gibney, 2012, 9:29). Moreover, funding of the anti-government ideas were artificially disguised by the concepts of freedom and prosperity brought negative economic feedback that represents the correlation between the rate of the tax and debt levels (Hacker & Pierson, 2010, p. 15). Mitt Romney’s supporter Paul Ryan proposed “The Path to Prosperity” program, based on the abovementioned ideas of prosperity that proposed to cut tax rates even lower that they were before (Gibney, 2012, 33:28). Political scientists and economists claimed that Ryan’s rescue plan would not only cut food stamps by 134 billion in the next 10 years, but could shred the safety net by 7 million people (Gibney, 2012, 38:00). In macroeconomic terms, government tax cuts stimulate consumer spending, earning and profit rise that lead to high income and higher demand of money (Iceland, 2012, p. 106). Therefore, investment spending will be decreased because increased banked money will raise interest rates, and make the funds’ borrowing   more costly (Iceland, 2012, p. 111).

This multiple effect is favorable for the financially capable people, who may seek benefits from the tax breaks (Mettler, 2011, p. 24). However, third-party organizations and businesses will be the largest winners in such conditions because their industries will be promoted by the subsidized individuals on the grounds of submerged policies (Mettler, 2011, p. 24). Therefore, the Americans with household incomes of $ 100, 000 received 69 % from the Home Mortgage Interest Deduction policy, and 55% from the tax-free status of retirement policy, that accumulated in the top 15% of the upward income distribution scale (Mettler, 2011, p. 23).

Furthermore, the Park Avenue billionaires, who have the lowest tax interest rates and receive income from the effective lobbying, are protected from the interest rate increase by the prescriptions in the tax code under the section “carried interest” provisions (Gibney, 2012,  p. 19:59). The provision predetermines substantial returns for high risk investments of the largely unregulated speculative funds, mostly spent on the notorious anti-government campaigns (Hacker & Pierson, 2010, p. 51). Moreover, the tax rules where written when the private equity funds did not exist, the percentage that they get as a management fee is not considered as an income, and therefore, cannot be charged with the tax (Hacker & Pierson, 2010, p. 229).

Therefore, social welfare is represented as conflict between the resources needed to address the contemporary social problems and the political unwillingness to resolve the dilemma of the current social policy (Epstein, 2011, p. 7). The problem is even worsened when the public sector unions have officially lost power to restrain the government from imposing taxes on pensions and medical bills that the citizens could not cover (Hacker, 2006, p. 139).

“Privatization” of Social Security and Inaccessible Medical Care within the Context of the New Reforms

The film briefly embraces the issue of the budget repair bill, signed by the newly elected Wisconsin governor that eliminates almost all collective rights for public sector unions (Gibney, 2012, 55:00). The issue brings to light the worthiness of the retirement savings since they are regulated by the companies that are based on the principles of the stock market (Hacker, 2006, p. 111). A 401k mainly as a type of the retirement savings benefits people with high income, and does not guarantee that the entire worked amount will be returned for the retired worker (Hacker, 2006, p. 112). Moreover, current changes to the payment status of the retired workers force them to stay employed within the same company for the entire year because if they decide to quit their working place before the required period, these retired will not receive a benefit in a form of 401k contribution (Epstein, 2011, p. 3). According to the general statistics, nearly a third of retired Americans lost 50% of their financial wealth between 1992 and 2002 (Hacker, 2006, p.113). This example helps to demolish the ideas of the equal opportunity and effective results of the hard work since the current privatized structure aimed to rearrange Social Security structure to be fostered by the institutional and structural discrimination (Ambrosino et. al, 2008, p. 154).

Furthermore, health costs cannot be considered as beneficial for the middle class because these costs exceed the growth of their earnings, making it more difficult to cover the required insurance (Hacker, 2006, p. 139). According to business insurance statistics, the health care expenditures reached 2,6 trillion by 2010, placing unaffordable burdens on employers and workers because employer-sponsored premium coverage had increased by 97 %, forcing the majority of the citizens apply for Medicare and Medicaid (Geisel, 2012). Therefore, adding to the unturned sources of the retirement income, unaffordable health care insurance brings broken benefits to the large majority of the middle-class and lower-class Americans.

Increased Political Knowledge of the Public Masses for Adequate Expression of Opinions

The film gives the basic concepts of the unfair and upward income distribution, unsolved social issues that are not considered politically and financially feasible, and lack of opportunities, due to the reduced social mobility, caused by unfavorable conceptualization of the poverty (Gibney, 2012, 5:37). The filmmaker claims that it is impossible to struggle out of the extreme poverty because the citizens do not conceptualize it as the absence of the sufficient items, which are required to sustain decent standards of living, but see poverty as exploitation of the ruling class (Gibney, 2012, 7:35).

The concepts of social welfare and political knowledge are interconnected in the film’s plot. The filmmaker is trying to increase the contemporary concern that mass media negatively influences the level of the citizen’s active participation in the politics, due to the lack of information about the current reforms. Moreover, the film increases awareness of the college degree importance for the sufficient and efficient competition within the social mobility aspects. The film claims a rate of 19% unemployment only in South Bronx district, where social mobility stagnated, due to the impossibility to apply for a job without a college degree (Gibney, 2012, 6:35).

The film also raises issues of the conceptual deservedness, giving an example of the Park Avenue billionaires, whose morality is based on the target of getting richer and richer every day (Gibney, 2012, 56: 11). On the other hand, some unprivileged classes understand deservedness in the light of the cultural hopelessness and indifference that above all comprises low income and predetermines inability to take advantage of the offered upward mobility (Ambrosino et. al, 2008, p. 154). The film’s content also covers the principles of the novel “Atlas Shrugged”, written by Ayn Rand, in which the most productive citizens refuse to support the capital growth, due to their exploitation by increased taxation and go on strike (Gibney, 2012, 30:06). The filmmaker counteracts Rand’s concepts and financial plan of the Romney’s protégé, and underlines absurdity of both, considering the financial unreality of these concepts.

The film will connect with the mass public, increase its political knowledge of the deception of the artificial benefits of the amorphous policies, and will help the citizens to understand the content of the prosperity that the government leaders’ entail with the promotion of the new reforms. The public will be informed with the peculiarities of the economic pie distribution and understand its upward heading.

The filmmaker interviewed the scientists of the political and economical fields, who are familiar with the peculiarities of the winner-take-all concepts, and the principles of the free market. The film supports the idea of the limited benefits for non-rich, taking into account that current tax policy does not provide a true meritocracy, when a person could reach success and wealth through hard work (Ambrosino et. al, 2008, p. 154).

Conclusion

The film “Park Avenue: Money, Power, American Dream” brings to light reasons of the unresolved social welfare problems, based on the amorphous benefits of the tax cut policies that the upper class gets from the economic pie distribution. The film conceptualizes poverty as exploitation by the ruling class of the Park Avenue billionaires, who lobby their anti-government ideas to the Congress and receive revenues that are not considered as an income, owing to the government’s unwillingness to change undue code prescriptions.

The filmmaker supports the concept of the Winner-Take-All economy, where free-market principles are reinforced by the favorable rewards for individuals, who voluntary subsidize the private sector, getting advantage of the reduction of the household’s value. The concept centralizes the upper class as a main beneficiary of the tax cut policy, when the 740 Park Avenue billionaires’ incomes have the lowest interest tax rate, due to the setting of the tax code and prescription of the inheritance system.

The film discloses the main aspects of the currently active tax policy and its affect on the hyper concentration of income in the upward heading that reached 81% by 2007. The income distribution is correlated with the poverty conceptualization that is affected by the reduced social mobility and limited benefits for non-rich. Furthermore, the film briefly touched the issue of the broken benefits related to the unworthiness of the retirement savings within the 401k program and increased cost of the healthcare bills. With examples of the Wisconsin’s budget repair bill and Paul Ryan’s “The Path to Prosperity” plan, the filmmaker stresses out how the social welfare can be paralyzed by the growing income inequality and increased national debt that could shred the safety net by 7 million people in the next ten years.