Over the past 30 years, the top 10% have had their taxes reduced and their income increased while the middle class has lost ground:
Average Hourly Earnings in 2008 Dollars:
1972 = $20.06
2008 = $18.52
A 7.6% decrease.
The Gap Between the Richest and the Poorest has grown.
Gap Between the Share of Capital Income earned by the top 1% and the bottom 80%:
1980 = 10%
2003 = 56%
A 5.6 times increase.
The Probably of Moving Up from the Bottom 40% to the Top 40%:
1945 = 12%
1958 =Â 6%
1990 =Â 3%
2000 =Â 2%
Income Increase/DÂecreases from 1990 to 2005:
CEO = 290.2%
S&P 500 = 141.4%
Coporate Profits = 106.7%
Production Workers = 4.3%
Minimum Wage = -9.3%
Reagan’s Tax Cuts Increased the Wealth in the Top 1% by 19%
Bush’s Tax Cuts Increased the Wealth in the Top 1% by 10%
Effective Tax Rates:
1960 = 72%
2004 = 38%
1960 = 18%
2004 = 18%
The Top 50% have 97.5% of the wealth.
The Top 10% have 70.5% of the wealth.
The Top 1% have 33.8% of the wealth.
The Top 1% own 90.3% of the stock and bonds.
At this stage, adjusting the income tax (either by changing marginal tax rates and/or by closing loophole, denying deductions, etc) to redistribute wealth from high earners to low wage households would be like rearranging the deck chairs on the Titanic. Over the past thirty years US households have seen not only a shocking redistribution of income toward top earners, but also a consequent, massive and damaging inequality in wealth (as opposed to income).
It is time to consider a wealth tax: a sizable one off levy on the wealth of every household, corporation, trust or other legal person with assets of over say $2m. ideally the levy would be progressive with those with fortunes in excess of say $100m paying the lion’s share. The proceeds could be used to repay debt, make infrastructure investments, finance financial aid, healthcare and income transfers to poorer households.
Any student from Economics 101 will grasp the likely stimulative effect of this sort of wealth transfer since those with lower incomes (and less wealth) are more like to consume what they are given. Also, if the tax were enacted in a way that rules out it being levied again for a considerable period, the effect of incentives to work, save, invest etc of those who are assessed the tax would be minimized.
Now THAT would be a class war worth fighting.