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Wealth and Income Inequality: America’s Moral Crisis
person
Don't believe everything you thinkThe liminal space Veteran
Less than one tenth of one percent of our population is holding a sum of wealth approaching three times the size of the US economy that is anticipated to more than double within the next decade, the earnings on which does not contribute to Medicare, Medicaid and Social Security. And the wealthiest in America quintupled their income during the heart of the Great Recession. To propose cuts to food stamps and unemployment benefits for the victims of the Great Recession during a time of increasing poverty and poverty-related deaths, without shared sacrifice at the top, represents nothing less than a moral crisis for our country.
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Warren Buffet, the second wealthiest individual in America behind Bill Gates (ref), has advocated over the past several years to raise taxes on the wealthiest of Americans. Using himself as an example, he paid 17.4% on his taxable income last year (around $40 million), a lower level than any of the other 20 individuals in his office (range 33% to 41%, average 36%). The reason for this is that the “mega-rich pay income taxes at a rate of 15 percent on most of the earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class; typically they fall into the 15% and 25% income brackets, and then are hit with heavy payroll taxes to boot” (ref).
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Mr. Buffett is right when he said in 2006: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning”
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Retaining Tax Benefits for the Wealthiest While Cutting Safety Nets: A Few Other Statistics (ref)
•The richest 400 Americans hold more wealth than 154 million Americans, half the US population. They paid 30% of their income in taxes in 1995, but only 18% now.
•The average millionaire saves $136,000/year due to reduced taxes, a sum greater than the highest income level in the lower 80% of America (and, by definition, there are no taxes paid on those savings).
•One percent of America holds 40% of this country’s wealth, more than the lower 90% of America combined, and holds almost half of all investment assets that produce income at lower tax rates without payroll taxes that contribute to Social Security, Medicare, and Medicaid.
•Between 1975-2010, income of the top 0.1% of income earners quadrupled and for the top 0.01% quintupled. During this same time period worker productivity increased 80%, and yet the income shift has resulted in a shortfall of $400/week for the typical American family.
•From 2009 – Q4 2010, 88% of income growth went to corporate profits (i.e. CEOs) while just 1% went to workers.
http://www.artonissues.com/2011/08/income-and-wealth-inequality-americas-moral-crisis/
There's a lot of good charts and graphs and many other well reasoned arguments in the article.
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One argument that we often hear from the right is that of equality of opportunity vs. equality of outcome. I think that this is a false choice. No one wants to take all the money away from wealthy people and spread it out so that everyone makes the same amount of money. What we are talking about is maintaining a society where a child from a lower income home has the opportunity to get a quality education and secure a stable life for themselves. As it is right now a child is much better off being born into a wealthy family that can afford a prestigious primary and secondary education than a child is being born smart and ambitious to a poor family. This is more of an aristocracy than a meritocracy. All I want is to see a country where an individual can reasonably expect to house and feed themselves and their families with hard work and effort. When %1 of the population owns %50 of the wealth education and infrastructure for the rest suffers.
...
Warren Buffet, the second wealthiest individual in America behind Bill Gates (ref), has advocated over the past several years to raise taxes on the wealthiest of Americans. Using himself as an example, he paid 17.4% on his taxable income last year (around $40 million), a lower level than any of the other 20 individuals in his office (range 33% to 41%, average 36%). The reason for this is that the “mega-rich pay income taxes at a rate of 15 percent on most of the earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class; typically they fall into the 15% and 25% income brackets, and then are hit with heavy payroll taxes to boot” (ref).
...
Mr. Buffett is right when he said in 2006: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning”
...
Retaining Tax Benefits for the Wealthiest While Cutting Safety Nets: A Few Other Statistics (ref)
•The richest 400 Americans hold more wealth than 154 million Americans, half the US population. They paid 30% of their income in taxes in 1995, but only 18% now.
•The average millionaire saves $136,000/year due to reduced taxes, a sum greater than the highest income level in the lower 80% of America (and, by definition, there are no taxes paid on those savings).
•One percent of America holds 40% of this country’s wealth, more than the lower 90% of America combined, and holds almost half of all investment assets that produce income at lower tax rates without payroll taxes that contribute to Social Security, Medicare, and Medicaid.
•Between 1975-2010, income of the top 0.1% of income earners quadrupled and for the top 0.01% quintupled. During this same time period worker productivity increased 80%, and yet the income shift has resulted in a shortfall of $400/week for the typical American family.
•From 2009 – Q4 2010, 88% of income growth went to corporate profits (i.e. CEOs) while just 1% went to workers.
http://www.artonissues.com/2011/08/income-and-wealth-inequality-americas-moral-crisis/
There's a lot of good charts and graphs and many other well reasoned arguments in the article.
---
One argument that we often hear from the right is that of equality of opportunity vs. equality of outcome. I think that this is a false choice. No one wants to take all the money away from wealthy people and spread it out so that everyone makes the same amount of money. What we are talking about is maintaining a society where a child from a lower income home has the opportunity to get a quality education and secure a stable life for themselves. As it is right now a child is much better off being born into a wealthy family that can afford a prestigious primary and secondary education than a child is being born smart and ambitious to a poor family. This is more of an aristocracy than a meritocracy. All I want is to see a country where an individual can reasonably expect to house and feed themselves and their families with hard work and effort. When %1 of the population owns %50 of the wealth education and infrastructure for the rest suffers.
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Comments
I remember viewing an Adam Carolla rant on utube where he blamed all this on the movement 20 years ago to give participation trophies to each kid, regardless of their capabilities or actual effort. Seems like the compassionate thing to do for a kids ego, but are we really helping prepare them to make it on their own? Adam is a bit over-the-top in his rant, but I recognize some valid points.
I'm going through this with my kids... it's a different mindset than when I was growing up.
The report by Sean Reardon, a Stanford professor of education and sociology, shows that the income achievement gap--the difference in the average standardized scores between children from families at the 10th percentile of income distribution and children at the 90th percentile--is now "nearly twice as large as the black-white achievement gap."
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According to Reardon, the reasons the income achievement gap has grown include the following:
•The income gap between the richest and poorest families has grown over the past 40 years;
•High income families invest more time and resources into promoting their children's "cognitive development" than lower income families;
•High income families increasingly "have greater socioeconomic and social resources that may benefit their children;"
•Income inequality has led to more residential segregation by income level rather than race, which in turns means that high income children have access to higher quality schools and other resources.
http://www.huffingtonpost.com/2011/11/21/income-achievement-gap-al_n_1105783.html
Some of the reason for the gap is simply due to wealthy families often being better educated and placing a higher value on education than poorer families. I agree with you @Telly03 that overpraising kids can lead to complacency and laziness.
Children from wealthy families have an advantage and maybe its always been so and maybe one could say its deserved. I don't want it to be that way though, I want the government to shape public policy so that a capable individual from a poorer family has just as much ability to succeed as one from a wealthy family. I don't think the government should do it by handicapping the well off, they should strengthen schools and programs not that give people handouts but give them help to succeed.
"Emily Beller and Michael Hout examine trends in U.S. social mobility, especially as it relates to the degree to which a person's income or occupation depends on his or her parents' background and to the independent contribution of economic growth. They also compare U.S. social mobility with that in other countries. They conclude that slower economic growth since 1975 and the concentration of that growth among the wealthy have slowed the pace of U.S. social mobility."
http://www.ncbi.nlm.nih.gov/pubmed/17036544
I feel that politics moves in cycles, the conservative ideology has dominated for a while now. At first there were many good solutions to the economic stagnation and beaurocratic waste, but once those problems were solved they kept pushing the agenda and sent us off kilter. Eventually things will get bad enough and progressive politics will take hold, problems will be addressed and things will get better. These ideals will probably become entrenched and lead to more stagnation and bloat. And so on... and so on...
I think each time we learn a little more and move forward but I think it will be a while before the people of earth find that middle way. Lets hope we don't kill ourselves in the process.
But my point was that he once made a very interesting statement about how property taxes work in the US. I'm pretty sure it was a comment about how his taxes for 6000 sq. ft, (and we don't know how big the lot is, but it looks like at least a double or triple-sized lot) are much less than taxes on apartments in some parts of the country. And he was saying that's not right, he would be willing to pay more in taxes, he wants to pay his share for the common good. Something like that.
http://billmoyers.com/episode/on-winner-take-all-politics/
But to place all of this nation's eggs in the basket of "equality of opportunity" is not fair, in my opinion. There is a certain "bounty" that -- well, partly good luck in being located where we are, the work of our ancestors, and, American history have handed down to us that ought to be shared amongst all who are Americans.
There are those who say that a reasonable standard of health care is not a "right", and I guess that's true. But, although it's a negative word these days, I would argue that a reasonable standard of health care is an "entitlement" -- something that each American deserves, based on that concept that Americans ought to share in the "bounty" of this nation.
I look at my own sister. I don't think she deserved to have a life equal to mine. She quit high school one month before she would have graduated...I worked my way through 7 years of university. Without exaggerating, I can say that she worked fewer hours in her whole life than I worked in one year. She chose to drink and take drugs. I chose to remain sober and off drugs. The quality of housing she could afford was low, but satisfactory. The quality of food she could eat was low, but satisfactory. Usually she didn't own a car, but could use public transportation. The clothes she could afford were Walmart. I always did better than she in all those categories and more. And that's fair, in my view. BUT, she deserved to share in the "bounty" of America in what I would refer to the basic elements of life -- health care being the best example.
So for me, equality of opportunity -- a valid concept. But in regard to some basic standard of life -- equality of sharing America's "bounty" ought to also be a valid concept.
I always gave our nationally award winning band teacher a lot of credit, because when receiving much deserved kudos for his work, he would often point out that he started off with the talent of mostly students who were taking private music lessons and who attended the National Symphony, etc. before he even raised his baton. And, most of the band students were White or Asian. Same with our orchestra, which was often called on to play at events where the Governor was in attendance. Our chorus didn't win many awards -- that was more the average kid who didn't have the advantages.
Our consistently award winning math team was also made up of mostly White and Asian students, many of whom received private tutoring, went to SAT prep courses, attended summer programs at universities, and so forth.
Our "everyday clubs" were attended more by the average or low income kids.
Unfortunately, many people, including many of our teachers, couldn't see the differences in opportunity that our kids faced.
http://articles.sfgate.com/2011-07-08/business/29750157_1_susan-thompson-buffett-warren-buffett-retailers
http://abcnews.go.com/blogs/business/2012/01/warren-buffett-to-match-republicans-tax-donations/
The harder thing is getting happy.
Good luck everyone
And yeah I plan on watching the other 2. I can post them once they're viewable.
@vinlyn Well, there was the robber baron age, and all that. But that tendency toward extremes, I though, was fairly successfully addressed by the New Deal and other innovations, along with the GI Bill after WWI and II. In the 40's, 50's and 60's, didn't the middle class grow? There weren't the huge income disparities then that there are now. By all means, fill me in if I'm missing something.
I'm just saying that in my view that upper class is always there. Its fortunes sometimes adjusting to other factors, sometimes its fortunes (literal and figurative) rising, sometimes falling.
The Rockefellers are still around, obviously. I think tax incentives back in the middle of the 20th Century resulted in their setting up several charitable foundations. Others like them did the same. Also maybe not a bad thing. I wonder what their tax rate used to be, back in the day? Before Reagan. I wonder if they were able to evade taxes like the corporations do now.
http://billmoyers.com/episode/on-winner-take-all-politics/
Someone mentioned people border-crossing to do the work that we won't, that is very true, however what has also become evident is that Affirmative Action is now failing. It has not been reviewed or revised since its inception.
The population has changed drastically since we have such lax immigration here in the USA, and even the census shows that there is far less of an ethnic distribution/disparity.
Because of AA, and now the change in ethnic distribution, it is by far more difficult for a white male to both find a job, and also get financial aid for tuition, unless he is a veteran, for which preferential treatment is given. Especially here in Virginia.
Surely I am not the only one who has noticed this, however it is not discussed or addressed because of the global guilt pounded into our heads because of the Holocaust, slavery, and Ellis Island immigrants "having built this country". I wonder just how long we will have to continue to pay that debt.
Some of the bazillionaires like Buffett and Gates are doing good work, and have set up foundations, then there are the ones like Trump who just take and do nothing for anyone. I hope that Mr. Buffett can mobilize the other fat cats and inspire them to lighten their wallets even just a little.
There is something inherently wrong with a system that will cut services to the poor before raising taxes for the rich...but it is the rich who run this place, so there's your answer. Not gonna happen.
Just my 2 cents
I am not aware of the backlash you speak of,much less this legislation. I have never seen it on the news sites or heard it on the news.
Also, I am not saying it should be done away with, just that since times have changed it should be adjusted accordingly so no one suffers from inequity. I do not find that to be at all racist or sexist. Times change, and so must legislation.
It's kind of like being "politically correct", we have PC'd ourselves into awkward silence.
Oh, and this just in: Warren Buffett Puts His Money Where His Mouth Is
http://finance.yahoo.com/news/impressed-delighted-warren-buffett-matches-204656439.html
Hubris -- the efforts to modify AA are not big news headlines right now, but it's a story that has been going on for years. Try a Google search: "modify affirmative action".
The court ruled that the university couldn't use race as a criterion for admission. That sent shock waves through university admissions offices throughout the US. Some universities adopted an economic criterion instead, saying they'd set aside a certain number of spots for economically disadvantaged but deserving students, figuring they'd catch minority students that way.
But as a result of all these changes, Black enrollment in law schools and med schools has fallen significantly. I don't know about enrollments in undergraduate degree programs.
Also,as an aside, there are precious few scholarships out there for non "minorities" (minority is not really factual anymore, since ethnic diversity has increased), and the ones that are there require you to be an activist of some sort, or you do not get the money...that in and of itself is a political agenda. No such thing as a free ride. LGBT scholarships come to mind, since I was researching them for a friend in school.
re: current, or relatively recent, developments on the Affirmative Action front: sorry, can't point you to any articles. They do come up from time to time, but I've got nothing off the top of my head. Maybe check the NY Times?
What scholarships require you to be an activist? I've never heard that.
I have no degree, and there are reasons for that which I will not go into now, however I desperately want to go back to school, but I'd be paying debt to the grave. So it's a catch 22.
Can't save for retirement without money,can't have money without a degree, can't have a degree without money,but the money you make won't pay for the degree so you can't save for retirement....Uhhhhh, yeah.