“There’s class warfare, all right but it’s my class, the rich class, that’s making war, and we’re winning,” Warren Buffet, CEO Berkshire Hathaway and third richest man in the United States.
In 2006 Mr. Buffet compiled a spreadsheet on the taxes paid by himself and everyone in his office, mostly secretaries and clerks. He found that he paid a tiny fraction of his income in taxes while those working for him paid much more of their income into taxes. He asked the simple question, “How can this be fair?” As far as I know he hasn’t found an answer.
In 1970 the top 1% owned 13% of the wealth in the United States. By 1993 they owned 40% of the total wealth. Today they own close to 80% of the stocks, bonds and real estate in the country. In 1992 the 400 richest people in the US averaged $24 million/year. By 2000 that income grew to $174 million each.
Did those 400 people work harder between ’92 and 2000? Did they stay longer at the office? Did they take on more risk or responsibility? Nope, the tax code changed. Nothing else, just the tax code.
The really sick part of it is how they’ve recruited us, the working people, to fight the class war for them. Somehow they’ve convinced us that if we just keep giving tax cuts to the wealthy we will someday become wealthy ourselves when in actuality the working men and women have seen their incomes decline over the last three decades. Between 1969 and 1996 the middle quintile of incomes saw a decrease in disposable income of 1.5% and from 1996 to 2000 another 2% (measured in constant dollars adjusted for inflation, source: US Census Bureau). We continually vote against our own best interests.
The facts are simple and unassailable; the outcome inarguable. The economic policies of the last thirty years have increased the gap between the wealthy and all other income levels (wealthy being the top 5% of incomes; $250k adjusted gross income/individual, $500k agi for couples).
The highest progressive tax rate in the ‘50s was 91% and un-earned income was taxed the same as wages. During those decades the median income growth was 3.4%/year. Beginning in 1980 with the change in economic policy to “supply side” or “trickle down” which cut top tax rates to 35% the median income growth rate dropped to 1.8%, not enough to keep up with inflation. Corresponding to those income growth rates was the growth of the GDP. Since the introduction of Reaganomics in 1980 all measures of growth, save one, have slowed. That one measure is the growth of the Mega Rich. Don’t take my word for it; see Alan Greenspan about it, he’s the one who gave me those numbers.
The change in tax code not only rewards the higher incomes but has shifted the burden of taxes from un-earned income to wages. Un-earned income is money gained from investments, capitol gains and the like. It’s called UN-EARNED income for a reason. As a result of the tax policies begun under Reagan and brought to their fullest under Dubya the rich got richer, the poor got poorer and the middle got to shoulder most of the burden.
While I don’t wish for a return to everything the ‘50s had to offer, like the racism, xenophobia and sexual discrimination, the economic and tax policies were good for the whole country. Like Reagan said, a rising tide raises all ships. Let us go about the raising of the tide and stop building bigger ships.
http://www.nytimes.com/2006/11/26/business/yourmoney/26every.html Ben Stein interviews Warren Buffet.
http://www.endgame.org/primer-wealth.html wealth distribution as reported by the US Census Bureau
http://query.nytimes.com/gst/fullpage.html?res=940CE1DD113BF935A15755C0A9659C8B63 400 richest people in US
http://findarticles.com/p/articles/mi_m1132/is_11_53/ai_85047831 Decline in both economic growth and median income between 1950 and present; Alan Greenspan.
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