, who was Secretary of Labour in the Clinton Administration from 1993 to 1997, has a very interesting blog
on the current state of affairs that contains any number of useful observations.
I recently came across one of his posts
which laid out some rather compelling facts about the grossly uneven
distribution of wealth in America and how it is that we have come to be
in a situation where we can't pay for the things that any civilized
society really should be able to fund.
great surprise, but nearly everyone in America has bought into the idea
that we need to radically reduce expenditures rather than give any
thought at all to increasing revenues through taxation, specifically by
taxing those who can most afford it – the super rich.
We have heard this before, but the numbers, as I say, are compelling.
I do recommend that you read Reich's post in its entirety, but here are a few interesting bits:
typical 30-year old male (if he has a job) is earning the same as a 30-year old male earned three decades ago, adjusted for inflation.
bottom 90 percent of Americans now earn, on average, only about $280
more per year than they did 30 years ago. That's less than a 1 percent
gain over more than a third of a century. Families are doing somewhat
better but that's only because so many families have to rely on two
This may not sound
catastrophic, but, and here's the rub, the American economy is more than
twice as large now as it was thirty years ago. So, Reich asks, where
does all the money go? And the obvious answer is: to the top:
richest 1 percent's share of national wealth has doubled – from around 9
percent in 1977 to over 20 percent now. The richest one-tenth of 1
percent's share has tripled. The 150,000 households that comprise the
top one-tenth of 1 percent now earn as much as the bottom 120 million
In so many ways, I have to say that I don't care what one's politics are. This is just wrong.
you might think that with the economy growing so rapidly over the past
30 years, those benefiting the most would be called upon to kick in a
bit more. You would be wrong. The power of the super rich has been such
that they have been able to make just the opposite happen:
the 1940s until 1980, the tax rate on the highest earners in America
was 70 percent or higher. In the 1950s, it was 91 percent.
Ronald Reagan the top rate dropped to 28 percent. Under Bill Clinton it
rose to 39 percent and then under George W. Bush dropped to 36 percent
(which is, of course, where the Republicans want to keep it).
Reich goes on to talk about big slashes to estate taxes and capital gains taxes, but you get the picture.
add insult to injury, Reich makes the point that even before the
current economic downturn the middle class's share of the nation's total
income had shrunk while their tax burden had grown as they paid bigger
chunks of their income in payroll taxes, sales taxes, and property taxes
than they did before.
A lot of right wingers
want to talk about common sense. Well, it makes no sense to me that
public services and programs that the middle class and poorer Americans
count on are poised to get the axe while this gross, and relatively new,
uneven distribution of wealth in America does incredible damage to the
fabric of the country.
The obvious point that
Reich makes is that we need to hike taxes on the super rich -- not that
this is going to happen any time soon.
are going to continue to vilify public sector employers and big
government in general. We are going to let big money buy all the means
of mass communication and politicians it needs to convince everyone
that what we really need is smaller government, which is just another
way of saying that people, a growing number of people, will simply have
to do without what they need to live a decent life.
more equitable scheme of taxation would go a long way to solving the
problems we are told can only be solved by massive cuts, but that would
simply seem to make too much sense.
I'll give Professor Reich the last word:
this and we can afford to do what we need to do as a nation. Do this
and you prevent setting the middle class against itself. Do this and you
restore some balance to a distribution of income and wealth that's now
dangerously out of whack.
Labels: income inequality, Robert Reich, taxes, U.S. economy