Taughannock Falls

Taughannock Falls
from: althouse.blogspot.com

Tuesday, August 3, 2010

Carving up the pie

A new report based on data recently released by the Congressional Budget Office shows in stark terms the increasing concentration of our nation's wealth in fewer hands. Over the last three decades we have moved from a situation of massive inequality to one of mind-boggling inequality. Even in 1979 the top fifth (or 20%) took a very large portion of the national income. By 2007 this had become an obscenely huge portion of the national income. This is easily visualized with the help of these pie charts to the left. In 1979 80% of Americans were still able to control slightly more spending power than the wealthiest 20%. By 2007 the top 20% actually took more than half of the national after-tax income. The steady erosion of the relative position of the middle class and the poor is striking. But even more remarkable is the explosive growth in income of the very wealthiest among us. The top 1% have increased their share of national income much more dramatically than other wealthy folks in the top fifth.

We must remember something about this data. The numbers here reflect only income wealth that is actually reported to the IRS. Is it possible that some folks in the top 1% might have some money stashed in accounts in Switzerland and the Cayman Islands that they forget to mention to Uncle Sam? As Sarah Palin might say-- "you betcha!" How much wealth do school teachers or short-order cooks have tucked away out of sight? They don't have fancy lawyers or money to fly to Zurich.

So, what's the point? It's not "class warfare" to remark on how much better the wealthy have fared than the rest of us. It's a simple statement of fact. When a modest increase in taxes on the wealthiest is proposed, the howls of protest are deafening. Yet such an increase would not really change the situation. When one considers that more than half of the national income belongs to the wealthy, all of a sudden advertising makes more sense. Sure, businesses and politicians would like everyone's support. Yet the spending power of the wealthy simply dwarfs that of everyone else. Their interests are never ignored. Instead of crying over the supposed unfairness of asking multi-millionaires to fork over a bit more cash on April 15th, politicians in Washington might consider the real unfairness of asking the vast majority of American taxpayers to live in fear of sickness or injury. Instead of insisting that we can't afford health care for all, maybe we should start asking how a great nation could allow so many middle-class families to go bankrupt and lose their homes because of medical bills.

Any capitalist economy is going to produce significant disparities in wealth. This in itself is not a reason to advocate the destruction of capitalism. Yet capitalism does not have to be heartless to flourish. A billionaire can afford to pay the workers at his company a living wage without having to sell his vacation home in Aspen or the south of France. Rich people enjoy so much of our bounty that asking them to help out a little more seems only right.

1 comment:

timberwolf said...

Ulysses, do all of these numbers reflect only annual income subject to federal income tax? In other words are assets (real estate, unsold stocks, bonds, privately held businesses, etc.)not taken into account here? In that case the disparity would be even larger.