Wealth Inequality Is the Problem.
April 22, 2022
To commemorate Tax Day (April 15) in the United States, Oxfam America’s Vice President of Advocacy Alliances and Policy Gina Cummings published a stark reminder of the times we are living in. “The billionaire wealth explosion in this country comes at a time of historic inflation hitting working families, compounded by the expiration of critical social safety nets put in place at the start of the pandemic to protect America’s most vulnerable. The impact on real people is devastating, leading countless families to slip into poverty. The ongoing failure of our nation’s leaders to implement a more equitable tax system is a stain on democracy.”
To support this warning, the organization published the results of a recent review of the wealth and earnings of 735 Billionaires using data from Forbes that found “America’s 735 billionaires are worth $4.7 trillion—an astonishing 62 percent increase over the past two years. Worker earnings have increased by only 10 percent over the same time, while food costs are up by more than a third (according to the USDA), contributing to an actual decrease in real earnings.”
735 men and women have “earned” or perhaps more accurately “skimmed and hoarded” $4.7 trillion dollars. That averages out to almost $6.4 billion dollars per person. That is, by my math, more than 52,000 times the median net worth for all Americans ($121,700). That number seems large, and it leaves half of us falling below that number. The gap is even worse for the BIPOC population.
We gather more and more data that tell us the same story. The rich are getting richer and leaving more and more of us trailing behind. “The top ten percent of households own 76% of all wealth in the U.S., while the bottom 50% of households own just 1% of all wealth.” That translates to millions and millions struggling for basic necessities.
This is, from my perspective, the most significant challenge our nation faces in 2022. The imbalance is so blatant that it rots the nation’s soul. As people search for reasons that their lives are harsh and that the future does not seem brighter, they look for those they can blame and for a leader to follow. There is always a “them” to blame for the despair and a demagogue waiting to rub salt in their wounds. There is always someone to point them to the ones they can hate and fear and keep the rotten system from being fixed. People of Color become an easy target, one with centuries of history to point to. Foreigners become “illegals” and provide another easy target. Add “intellectuals,” the eastern elite, the LGBTQ+ community, non-Christians and you have a whole bucket of targets to focus upon and serve as a distraction from where the focus should be.
Anywhere but at the men and women who control wealth and power.
We have more than enough wealth in our nation to make life better for us all. We have more than enough wealth in our nation to make life easier and more secure for us all. We just have to make the collective decision to use that wealth for our common benefit.
But this strategy does not work if we are unwilling to free ourselves from the mythology that we each get what we deserve from life. If we are rich, it is because we were smarter and worked harder. And if we are struggling it is because we have not worked hard enough and we were not smart enough.
The rules are broken, and the system is tilted. It has been tilted to benefit those with wealth and power. It has been tilted to allow them to add to their fortunes. Just days before Oxfam published its analysis of wealth, ProPublica, used a trove of leaked tax records to demonstrate just how rigged our system is in favor of the rich. For the years 2013-2018, they were able to compare the effective tax rates for the highest earners as compared to the average US tax filer. From their review of this dataset, the 400 highest earners “make an average of at least $110 million each year. A typical American making $40,000 would have to work for 2,750 years to make what the lowest-earning person in this group made in one. On average, the rate of income tax that people pay does climb as incomes ascend into the top 1%, but when you get to the range of $2 million to $5 million, that trend stops. The group earning in this range, composed mostly of business owners and workers with extremely high salaries, paid an average income tax rate of 29% from 2013 to 2018. After that, average tax rates actually drop the further up in income you go.”
Hidden in this data is one more fact. We pay taxes on our income, not on our wealth. Many of the wealthiest men and women pay little or no income tax because they have little or no taxable income. They can support their lifestyles by borrowing against their wealth or by using the many loopholes that they have been able to build into our tax system to keep their tax bills low while still spending on their mansions and yachts.
Deflection has been their game for decades. As long as they can keep the political waters aboil in arguments about everything but this broken system their wealth and power are protected. And they will not abandon it willingly.
Jeffrey Winters, author of the 2011 award-winning book Oligarchy and Director of the Equality Development and Global Studies program at Northwestern University, was recently interviewed by the Institute for Policy Studies’ Omar Ocampo. Winters said that if we wish to build a country that lives up to its visions, we must recognize that “oligarchs and elites will never give that which is not taken. We cannot wait for them to share their wealth and power. Any sharing of wealth and power and equality and justice has been won by meeting power with power. It’s the only way politics works. Any time we have seen major advances of people from below it’s because they organize.”
He looked back at what allowed the dramatic actions of the New Deal amidst the pain of the Great Depression. “The amount of mobilization that occurred for three decades before the Great Depression made the deep policy changes of the New Deal possible. When the 2008 fiscal crisis happened, there were no unions and no mobilization. That bailout was on the terms of the oligarchs. It was a missed opportunity because we weren’t ready. One of the most important reasons to organize is not for instant gratification, but to be ready when there is an opportunity and a moment for real deep change.”
If we do not recognize this, we may quickly find we have gone beyond the point of no return. We will find ourselves governed by the hubris of the wealthy, marked recently by these words from Elon Musk. “ “If you care about the reality of goodness instead of the perception of it, philanthropy is extremely difficult. SpaceX, Tesla, Neuralink, The Boring Company are philanthropy. If you say philanthropy is love of humanity, they are philanthropy.”
We need to stop letting the rules be set for us. We need to ignore the voices of the demagogues who tell us “They” have cheated, rigged the ballot box, changed the rules against us, and taken our success from us. Yes, we have to worry about our electoral system and our courts and the brutal fights taking place over a new desire by some to re-live the days of the puritans. We have to recognize the centrality of racism in our systems and daily lives. We have to stand for the principles we believe in, and trust that they can pierce the smoke and the deception that divides us now.
Michigan State Senator Mallory McMorrow showed us how in a stunning 4 minutes on the floor of the Michigan State Capital. “I learned that service was far more important than performative nonsense like being seen in the same pew every Sunday or writing ‘Christian’ in your Twitter bio and using that as a shield to target and marginalize already marginalized people…I know that hate will only win if people like me stand by and let it happen.”