When President Obama recently unveiled his plan to pay down the deficit, congressional Republicans’ first reaction was to call it “class warfare” because his plan calls for increasing taxes on the wealthy and recovering revenue that we currently give away as a nation to powerful corporations in the form of tax loopholes.
Republicans have some nerve calling the President’s plan “class warfare.” Since the 1970s, both Republican and Democratic administrations alike have accepted or embraced conservative economic theory, which holds that massive tax cuts, corporate welfare, and fewer regulations are the key to prosperity for everybody. The results of these policies speak for themselves.
By every objective measure, the rich have been getting richer in this country, while all other families have been losing ground.
There is no shortage of hard data.
Surveys and research done by the U.S. Census Bureau and the U.S. Department of Commerce show that income inequality has been on the rise since the 1970s. Among well developed countries, the United States stands out as having the biggest gap between the rich and the poor.
Data from the Census Bureau shows that as of last year, the top 20 percent of American households (those making at least $100,000 or more) received nearly half of all income earned in the United States. Households below the poverty line received only 3.4 percent. That is a ratio of 14.5 to 1, compared to about 13.6 to 1 in 2008, and a historic low of 7.69 to 1 in 1968 – the year America elected Richard Nixon.
Data from Bard College and the Federal Reserve, meanwhile, shows that the top 1 percent of Americans controls 34.6 percent of the nation’s net worth. The bottom 90 percent controls only 26.9 percent of America’s net worth.
According to the Center for Responsive Politics, the median net worth for members of Congress is $912,000. A member of Congress has a one-in-two chance of being a millionaire.
The average CEO makes an astonishing 185 times more what the average worker makes, according to 2009 data from the Economic Policy Institute (EPI).
Jacob Hacker of Yale and Paul Pierseon of the University of California-Berkeley have calculated that the top one percent have experienced a total gain of $673 billion more in annual income since 1979. The bottom 20 percent, on the other hand, have experienced a total loss of $136 billion since 1979. In fact, every income group not part of the top 10 percent – which means the bottom 90 percent – has experienced an overall loss.
Hacker and Pierson came up with these numbers by estimating what incomes would have been had all income groups realized the same growth rate between 1979 and 2005 as they did in the decades before.
The increase we’ve seen in income inequality has been inexplicably accompanied by tax policy that consistently favors the wealthy. The situation is so bad now that some Americans who have benefited from it are speaking out, loudly and forcefully. Warren Buffett recently penned an op-ed for the New York Times urging Congress to “stop coddling the super rich.” Patriotic Millionaires for Fiscal Strength, a group of courageous investors and entrepreneurs who want Congress to raise their taxes, has repeatedly debunked claims by Republicans that raising taxes on the wealthy would hurt the economy.
“Because of staggering disparities in income between the top one percent and the rest of income earners, the top one percent earns far more in income than it pays in taxes compared to other income groups, even when taking into account that it pays proportionately more taxes,” the millionaires noted in a July letter to House Speaker John Boehner.
Republicans, of course, have their own wealthy supporters who like our broken system – and want to keep it that way. Among them are the Koch brothers, who spent astonishing sums of money last year to help get Republicans elected. Curiously, in 2008, the Koch brothers’ net worth was approximately $38 billion, and their firm employed 80,000 people. Today, after three years of recession, their net worth is $50 billion, but the number of people they employ has dropped to 67,000.
Those last juxtaposed figures alone should make it perfectly clear who has really been on the losing side of “class warfare.”
To see the sources of the data referenced in this column, visit http://npi.li/classwarfare.
Andrew Villeneuve, a 2005 Redmond High graduate, is the founder and executive director of the Northwest Progressive Institute, a Redmond-based grassroots organization. Villeneuve can be reached at andrew@nwprogressive.org.
