by Janice Van Cleve
If the Occupy Wall Street movement has accomplished anything so far,
it is to underscore the huge income disparity in this country and
indeed around the world. Framing the message as a simple, direct
contrast between the 1% and the 99% is clever, compelling, and really
catching on.
By any measure, most of us can identify with the 99%. Did you get a
government bailout in the last three years? No? You are in the 99%.
Did you receive a ginormus bonus this year? No? You are in the 99%.
Has Ben Bernanke (chair of the Federal Reserve) or Timothy Geitner (US
Treasury Secretary) cut you any sweetheart deals lately? No? You are
in the 99%. Did you recently buy an election or a senator? No? You
are in the 99%.
Very smartly, the Occupy Wall Street movement has positioned itself as
the spearhead of the vast majority of Americans. While we may not be
camped out in front of City Hall or marching in the streets, we can
hear that the protestors are singing our song. They are out there as
a visible demonstration of our frustration and anger. They are
showing the rest of us that we are not powerless. They are showing us
that we can reframe the debate about our economy. We can shine a
spotlight on the 1% and illustrate how far removed they are from the
reality of the 99% in the mainstream. So who are these people In the
1%?
Based on the records of the Internal Revenue Service as published by
The Week magazine (November 4 issue), it takes an annual income of
just above $516,000 to qualify as one of the richest 1% in America.
Who makes that kind of money? We all know the big bankers, hedge fund
managers, and securities traders are up there, but according to The
Week, they only constitute 14% of the super wealthy. Another third
are from non-financial firms – like Wal-Mart. One example is Alice
Walton. The Wal-Mart heiress spent $65 million for one painting for
her new museum of art in of all places, Arkansas. At the same time,
Wal-Mart workers slave away at minimum wages and are actively
prevented from forming a union. One out of six of the 1% are in the
medical field (presumably Big Pharma) and one in twelve is a lawyer.
Here’s the kicker – over half of U.S. senators and representatives are
in the exclusive 1% club. Is it any wonder that Wall Street gets
bailouts at public expense and the 99% get foreclosures? Is it any
wonder that members of Congress enjoy single-payer health care that
they deny the rest of us?
Now this 1% claims they pay more taxes than the 99%, and they have a
point. Just looking at tax rates, according to the nonpartisan Tax
Policy Center, the 238,000 American households with annual taxable
incomes of $1 million or more will pay an average of 29% while what’s
left of the middle class, those taking home $50,000 to $75,000, will
pay 15%. Yet the records show that 7,000 of the 1% paid no taxes at
all. Warren Buffett even confessed that he paid half the tax rate of
his secretary! Obviously a simplistic flat tax like 9-9-9 would hand
the 1% a huge tax break while the 99% would end up paying 18% in
taxes.
The 1% claim they already pay 40% of all federal income taxes. So
what if they do? They own a third of the total cumulative wealth of
the United States and every year they take home 21% of the total
incomes. As Elizabeth Warren, Obama’s appointee for Wall Street
watchdog and now running for US Senate from New York, pointed out so
well, the richest 1% made their money thanks to the infrastructure
paid for by the public and the property laws passed by the public that
enabled them to get that wealth and keep it. They owe a larger chunk
of their incomes back to the public.
The Republicans claim that forcing the 1% to pay higher taxes would
stymie job growth. Oh yeah? In the 1950′s the highest tax bracket
paid 91% but the economy not only paid off the debts from World War
II, it thrived. The highest tax bracket was 70% in the 1970′s and
over 50% during all but the last two years of the Reagan presidency.
President Clinton raised taxes on the super rich from 31% to 39.6% in
1993 and the economy boomed. We even enjoyed a budget surplus.
Conversely, President Bush cut taxes on the super rich and the economy
stagnated. The 1% are not the so-called “job creators” that the
Republican politicians make them out to be.
Bailouts, tax breaks for corporations, and incentives for the 1% don’t
work to improve the economy either. All that public money that bailed
out Wall Street banks did not translate into easier credit for small
businesses and homeowners. The 1% used the money to buy out each
other. If they were “too big to fail” in 2007; they are many times
bigger now.
Such a gross income gap is not sustainable. The 1% cannot continue to
exploit the advantages of America, which all of us built, to benefit
only themselves. They cannot continue to expect the 99% to support
them in good times and bail them out in bad times. Sooner or later
one of three things always happen: 1) they run out of people to
exploit and their tottering towers come crashing down like a Lehman
Brothers collapse, 2) in their greed they attack each other and bring
world wide ruin like the Great Recession, the Great Depression or even
World War I, or 3) the 99% wake up and force a national course
correction like the French or Russian revolutions.
America was built on the hope and promise that if you worked hard or
had a good idea, you could make a good living, maybe even climb the
economic ladder, and provide a better life for your kids. Without a
middle class ladder, however, there is no hope and the 1% become
isolated in their narrow, little, and unstable make-believe world.
Janice Van Cleve’s book – AMERICA: COURSE CORRECTION – outlines many
of the reforms that are needed to return our country to a sustainable
future. Excerpts may be seen at www.jvox.doodlekit.com
<http://www.jvox.doodlekit.com>. Copyright 2011.
