The 99 Percent Keeps Growing
Kerry Wakely | Nov 08, 2011 | Comments 0
A recent Congressional Budget Office (CBO) study revealed that the richest 1 percent of Americans has gotten richer in the last 30 years while everyone else has only seen modest improvement, but anyone who has been paying attention to Occupy Wall Street probably already knew that.
It’s easy to write off the occupiers as jealous or lazy individuals who are directing their anger unfairly at more successful Americans, but such a view is glossing over the ugly truth. In one of the worst economic climates in American history, the largest portion of American income is flowing to the top and the gulf between rich and poor is growing at a staggering rate. It is only natural to be a little annoyed about this fact.
The CBO report compares the average after-tax income of Americans from 1979 to 2007, and found that the top 1 percent saw their income increase by 275 percent, while middle-class income increased only 40 percent and the poorest saw a small 18 percent increase. In terms of actual dollars, the top 1 percent made on average $165,000 or more annually in 1979, but now make $347,000 or more. The top fifth of Americans made on average $51,289 in 1979 and have managed to increase the average to $70,578 in 2007. The 20th percentile, unfortunately, only increased their 1979 average of $12,823 to $14,851. These numbers also mean that the top 1 percent, which used to make 8 percent of all income, now makes 17 percent, while the bottom 20 percent makes 5 percent of all after-tax income when they used to make 7 percent in 1979. As a whole, the middle class has also seen a decline, as the top 20 percent, formerly earning 43 percent of all income, now make 53 percent.
All of these statistics simply confirm what Americans have intuitively known for a long time now: the wealthy are increasingly better off, even as the economy continues to languish. The last three decades have been a great time for corporations and banks, with a string of Republican presidents and even the single Democrat in between the Bush administrations all contributing to de-regulation, welfare and tax reform. The report does not even account for the additional aid of the bank bailouts of 2008.
At a time when Republicans are crying foul over his “class warfare,” it is convenient that they don’t include this report’s findings as an example of that war. They may argue that the 1 percent earned every penny (ignoring the lucrative tax loopholes that have been imbedded in the tax code since the mid-1990s, or the two generous Bush tax cuts in the decade afterward), but the fact is that while a great number of Americans are out of work and earning a smaller slice of the income pie than they did in the 1970s, Republicans are nevertheless demanding that they make more sacrifices while protecting that far better-off 1 percent from paying anything more in taxes.
President Obama’s jobs plan, while not nearly good enough to truly rectify the growing economic divide, would at least put Americans back to work and put a little money in their pockets with his payroll tax cut; but in addition to preventing much-needed tax revenue coming from those who can easily afford it, they will not even support a plan that would put Americans back to work (and, one would expect, allow them to better be able to make those financial sacrifices Republicans demand, from additional taxes to cuts in welfare programs).
A bracketed tax plan like the one we have in place now at least accounts for the discrepancy between rich and poor, so of course Republicans also advocate a flat tax, guaranteeing that all people would pay the same rate, something that sounds fair on the surface but would only perpetuate the existing chasm. The rich would still keep the bulk of their ever-increasing wealth (and most likely be given a lesser rate in the process) while everyone else would be stuck with the same rate, regardless of how much they actually make, in many cases forcing the poorest Americans to pay more in taxes than they do now.
Mistaken policies and a screwed-up tax code have allowed the wealthy to reap even more at the expense of everyone else. The Republicans argue that their policies are meant to preserve equality of opportunity. However, most Americans cannot take advantage of the loopholes and write-offs used by corporations, nor are they actually helped by the de-regulation championed by the GOP, which resulted in the environment that created the economic collapse and forced the bank bailouts. If government cannot help to repair the growing imbalance in economic fortune, then I am hard-pressed to think of a more important role for it in the domestic arena.
Kerry Wakely is a fourth-year political science major. He can be reached at kwakely@uci.edu.
Filed Under: Opinion
