by ROBERT REICH
A record share of the nation’s wealth is in the hands of billionaires, who pay a lower tax rate than the average American. This is indefensible
On Tuesday, the Congressional Budget Office released a study of trends in the distribution of family wealth between 1989 and 2019.
Over those 30 years, the richest 1% of families increased their share of total national wealth from 27% to 34%. Families in the bottom half of the economy now hold a mere 2%.
Meanwhile, a record share of the nation’s wealth remains in the hands of the nation’s billionaires, who are also paying a lower tax rate than the average American.
How do the ultra-wealthy justify their wealth and their low tax rates? By using three myths – all of which are utter rubbish.
The first is trickle-down economics.
Billionaires (and their apologists) claim that their wealth trickles down to everyone else as they invest it and create jobs.
Really? For more than 40 years, as wealth at the top has soared, almost nothing has trickled down. Adjusted for inflation, the median wage today is barely higher than it was four decades ago.
Trump provided a giant tax cut to the wealthiest Americans, promising it would generate $4,000 increased income for everyone else. Did you receive it?
In reality, the super-wealthy don’t create jobs or raise wages. Jobs are created when average working people earn enough money to buy all the goods and services they produce, pushing companies to hire more people and pay them higher wages.
The second myth is the “free market”.
The ultra-rich claim they’re being rewarded by the impersonal market for creating and doing what people are willing to pay them for.
The wages of other Americans have stagnated, they say, because most Americans are worth less in the market now that new technologies and globalization have made their jobs redundant.
Baloney. Even if they’re being rewarded, there’s no reason why the “free market’ would reward vast multiples of what the rich were rewarded with decades ago.
The market can induce great feats of invention and entrepreneurship with lures of hundreds of thousands or even millions of dollars – not billions.
As to the rest of us succumbing to labor-replacing globalization and labor-saving technologies, no other advanced nation has nearly the degree of inequality found in the United States, yet all these nations have been exposed to the same forces of globalization and technological change.
In reality, the ultra-wealthy have rigged the so-called “free market” in the US for their own benefit. Billionaires’ campaign contributions have soared from a relatively modest $31m in the 2010 elections to $1.2bn in the most recent presidential cycle – a nearly 40-fold increase.
What have they got for their money? Tax cuts, freedom to bash unions and monopolize markets and government bailouts. Their pockets have been further lined by privatization and deregulation.
The third myth is that they’re superior human beings.
They portray themselves as “self-made”rugged individuals who “did it on their own” and therefore deserve their billions.
Bupkis. Six of the 10 wealthiest Americans alive today are heirs to fortunes passed on to them by wealthy ancestors.
Others had the advantages that come with wealthy parents.
The Guardian for more