Watching the news or reading any article remotely about the economy and I’m sure you’ll hear about the 1%. What does that actually mean though? Yeah, ok it means the really rich guys, right? Ok, ok, the super-duper, ultra-mega rich guys! Even still, what does that mean for most Americans?
There’s an excellent YouTube video that I found this week that accurately and easily describes a complex and not very well understood problem of income inequality. For most Americans we have an idea of what we think the issue looks like. The rich get richer – we all seem to grasp that, but how much more the rich keep getting richer is far more destructive than we realize. This breaks it down into easier to digest pieces, but still expect to be nauseous with disgust.
What’s interesting to me is that despite the obvious systematic theft from the middle and lower classes, the same group being stolen from constantly support policies & ideals that keep them poor. For instance, I had a conversation with a woman using a story about a college student to give an analogy about earning your own way and keeping what you earn. On its face it sounds good, but dig a little deeper and it unravels. Three out of four rich Americans (according to Forbes Magazine) got their wealth by inheritance not by education, effort, or merit. People with money are convinced they “earned it” and deserve it, so everyone else must be “stupid or lazy” to justify their unearned luck. The few who actually earn their money through work never see, or soon forget, that their “success” is owed also to armies of other people that made their good fortune possible – in other words, it is Socialism that makes wealth possible.
As if it isn’t insulting enough that the wealthy aren’t paying their fair share of taxes, we are also finally starting to realize that Americans aren’t even paid fairly for the work they already do.
This chart represents the productivity and real median family income growth 1947–2009. There has been a widening gap between productivity and median incomes since the 1970s. So while Americans are working just as hard – or even harder – they aren’t making any more money. As you can see, the rich are getting disproportionately richer by reallocating that money back into their own pockets. Now with the passage of legislature like Citizens United corporations and businesses are able to buy politicians who willingly pass law & legislation making it even easier to keep themselves wealthy. Currently, U.S. companies can deduct from their corporate taxes some expenses of moving facilities overseas. Democrats said 2.4 million jobs have been outsourced in the past 10 years.
“It is wrong that American workers subsidize a corporate decision to pack up American jobs and ship them overseas,” Democrat John Walsh was quoted as saying.
Since much of the wealth is caught up in inheritance, what happens to all of that money? Surely estate taxes help to feed money back into our system, right? Today, 99.8 percent of estates owe no estate tax at all, according to the Joint Committee on Taxation. Only the estates of the wealthiest 0.2 percent of Americans (roughly 2 out of every 1,000 people who die) owe any estate tax. This is because of the tax’s high exemption amount, which has jumped from $650,000 per person in 2001 to $5.43 million per person in 2015. Yet, because the wealthy have gotten wealthier over the past three decades or so, the estate tax produces a lot of money. Counting both revenue losses and added interest costs, complete repeal of the estate tax would cost the government close to $1 trillion between 2012 and 2021, according to the Center on Budget and Policy Priorities. So if we were hoping that at some point money might be funneled back into the very system that helped them become wealthy to begin with, the answer is no.
So, what do we do? We can’t even call ourselves a Democracy anymore according to a study done by Princeton. A government for the people by the people was a great idea while it lasted, but for now we are ruled by an elite class. We are now living in an oligarchy; a small group of people having control of a country.
The real question is how long we will allow this to continue?
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