In regard to the tax break for the wealthy continuing, Obama was wanting to only continue it for households earning less than 250k and letting the break for higher incomes expire.
I found this from fact check org:
http://www.factcheck.org/askfactcheck/what_percentage_of_the_us_population_makes.html
The tax break would otherwise been phased out for about 2% to 3.1% of households.
I'm all for a tax break for companies that hire american workers but the matter of compensation is another problem and is a complex one, partially tied to the economy, partially tied to the power given the employer either by law and/or competition.
Economics increasingly fascinates me. If I may muse on the subject from a "non-economist" point of view using an extrapolation strategy I learned in physics to test the validity of theories and concepts. I'll reduce it to a very simple equation:
If an economy is made up of two people (a world of two people, A & B) and each has one dollar to create a simple example: PersonA can say to the other, if you change the oil in my car, I'll pay you 1 dollar. PersonB has such a skill so he changes the oil for a dollar and the now only personB has two dollars and the other has no money. The guy with two dollars (personB) says, hey, I hear you are a doctor and I broke my leg changing your oil, how much will it cost me. PersonA says, I can do that for 10 dollars. PersonB says, hey, I only have 2 dollars. PersonA says, Ok, I'll do it for two dollars and PersonB will gladly pay all his money since fixing his broken leg is absolutely necessary and not discretionary. Now personA has two dollars and personB has no money. You can introduce debt into the equation, but that only delays the inevitable, that there is only so much wealth in the world (in the subject world, 2 dollars). It seems to me, wealth is when you have more money left over after paying for survival. Some people in the economy (personA in the example) have more power to command more in exchange for their services due to their position in the market or to how necessary their services are to survival.
Its not total dollars that counts but how many dollars among how many people. As the world population swells, total dollars has to increase; however, what a dollar represents is worth proportionately less. I don't fully understand it at this point, but it seems to me capitalism (the best thing humans have found yet) is fundamentally flawed. That "relatively" wealthy people (with lots of discretionary income) can only exist when there are those able to command more for what they do relative to other individuals. So everyone being wealthy is not achievable, and it would remove the entrapreneurial incentive, hence the failure of communism.
China is not communism but a hybrid of central government and capitalism. They solve their problem by isolationism and controlling their currency, this way they can live in a unique economic bubble of their own. So the trick is, it seems we are paying them so little for their product and maintaining our superiority in earning power; however, a person living in China has about 7 times the buying power than we do, so even if we pay them 1/7th the amount of the US dollar, in effect, we are paying them the equivalent buying power.
However, the US was able to exploit others in other countries to obtain more wealth and due to certain labor laws and economic growth, able to have a thriving middle class. Now we are becoming less powerful and able to command our price for what we do, so we are moving toward an "unwealthy nation".
It seems that capitalism alone doesn't have an answer and I wish I knew the answer. An ability to colonize and spread our population to other planets would create new opportunities for growth and inequality. IMHO....
