INCOME INEQUALITY

The number of millionaires in America increased 16% last year — in this economy.  The richest 1% of Americans now hold financial wealth that is six times greater than the financial wealth of the entire bottom 80% of Americans!  Income inequality in the U.S. is now greater than it has ever been in the last 100 years, and is much greater than it was in the thirty years following World War II (by the way, when the tax rates on the wealthy were much higher).  The U.S. now has one of the highest levels of income inequality, and is one of only a few developed countries where inequality has increased since 1980. 

Our country has become a far more unequal and unfair society.

The Southern Economic Journal found in a study that “71% of American economists believe the distribution of income in the U.S. should be more equal, and 81% feel that the redistribution of income is a legitimate role for government.”

Alan Greenspan said in June of 2005, “As I’ve often said…this (increasing income inequality) is not the type of thing which a democratic society — a capitalist democratic society — can really accept without addressing.”

Income inequality disrupts and roils societies by provoking rage, resentment and class tensions.  We believe that these inequalities are actually what is behind the bitter hostilities we hear on talk radio, and are at the heart of the tea party movement.  America doesn’t seem fair any more, and at the moment, the anger and rage unleashed in our nation — by the loss of opportunity to “better our station in life” — is directed at the government.  And, not without reason.

Our government has sold out to corporations and the wealthiest among us.  The wealthy are not paying their fair share in taxes — they pay only 15% on investment income, vs. 35% on earned income paid by the highest tax bracket of working Americans.  The “trickle-down theory” of economics has failed miserably, but our government has yet to dismantle the system.

Republicans are hell-bent to eliminate the Estate Tax on the wealthiest among us, which was promoted in the early 20th century by President Theodore Roosevelt and steel baron and philanthropist, Andrew Carnegie — as a way to attack this concentration of wealth at the top that they thought was a serious threat to democracy.  And even billionaires Bill Gates and Warren Buffett have spoken out in support of the Estate Tax.  In 2007 Warren Buffett told Congress that without an Estate Tax the U.S. is at risk of becoming a “dynastic plutocracy.”

Unless Congress revises the law by January 1st (which they are expected to do) the total of estates that would be impacted in 2011 could go from 5,500 last year to 44,200 next year.  And yet, even with that huge increase in the number of families taxed on inheritance that is less than 2% of the 2.5 million Americans who will die next year.  That figure is historically a very low-level — in the 1970s the percentage was 7.6, when the Estate Tax exemption was at $230,000 in today’s dollars.

The rich get richer, the poor get poorer, and the middle-class is slipping downward.  There is definitely something seriously wrong and desperately unfair with our economic and tax systems.

The number of American multimillionaires rose last year, while American workers continued to suffer.  The unemployment rate is stubbornly high, millions of Americans lost their homes and worker’s wages have stagnated for decades.  The U.S. is unique among industrialized nations in its enormous income inequality. 

Data from the U.S. Department of Labor tells us that if this inequality stays at its current rate, the gap in incomes in our nation “will resemble that of Mexico by year 2043.”  And, the Oligarchy and Corp-tocracy now running our country will not care — after all, they got theirs and too bad for everyone else!

The American people — through their inattention and lack of understanding — are allowing the wealthy ruling class to destroy the American Dream, and that dream is at the heart of what our nation means to us and to the rest of the world.  Yes, the government is at fault — at fault for deregulating corporations and cutting taxes for the top wealthy 1%, and for allowing this powerful upper class to amass so much wealth and power to the detriment of the rest of the American people and our nation.

And yet, when the administration suggests that it would be helpful to return the tax rates on the wealthy to the levels enacted by Ronald Reagan, the Republicans and Blue Dog Democrats scream, “Socialism!”  Alan Greenspan is one of those American economists who feel that our nation must address this income inequality issue if we are to survive and prosper as a country.  Last time we checked, Alan Greenspan is NOT a Socialist!

The American people are angry.  But, they need to focus their anger on the right target.  It is corporations and the top 1% of the wealthy, and their Washington lackeys, that deserve our wrath.  The current diffused and generalized rage against “the government” isn’t targeting those that are, at the core, responsible;  and only until we hold the guilty accountable will we begin to turn our nation in the right direction. 

Only when we realize that our nation has become a ‘by the wealthy/for the wealthy’ aristrocracy, and focus our demand for change on those people, can we begin to save the Amerian Dream.