Where Does Your Money Go?
By Paul Buchheit
17 November, 2007
Countercurrents.orgAmerica is experiencing the greatest disparity between rich and poor since the Great Depression, with an income gap that is worse than anywhere else in the developed world. Yet some analysts justify it as beneficial to the economy. Income concentrated among the rich inspires innovative ideas, risk-taking, and new products that benefit everyone. The rich are receiving 'performance pay' for a job well done, while the poor experience smaller but meaningful gains.
This argument may satisfy some of the skeptics, but a look at the facts will reveal the injustice. Since 1980 wage earners have not been paid what they're worth. Worker productivity has risen steadily since 1980, but compensation has remained stagnant. A recent study calculates that an average two-income family today has less disposable income than one-income families had 30 years ago, largely because of escalating home mortgage, health care, and child care costs. Single female householders have the highest poverty rates.
Meanwhile, 13,500 privileged Americans have more income than the 96,000,000 poorest Americans. Conservative groups claim that these wealthy U.S. households pay more than their fair share of income taxes. However, when social security and sales taxes are included, the typical wage earner pays about a 40% overall tax, about the same percentage as Americans with million dollar incomes.
The inequity is made more extreme with the income tax cuts. A study by Citizens for Tax Justice notes that over the ten-year period from 2001 to 2010 the richest one percent of Americans are scheduled to receive tax cuts averaging $34,000 per year. For the 20% of families with the
lowest incomes, the average tax cut will be $77.And then there's the matter of the shrinking corporate income tax. The portion of federal revenue derived from corporate income tax has decreased from 33% in the 1950s to 11.9% in 2005. Eighty-two of our largest corporations paid no tax in at least one of the first three years of the Bush administration. In Illinois, almost half of the state's corporations with sales over $50 million paid no taxes from 1997 to 2005.
More and more, our money is going to an elite group of corporate money experts, almost exclusively men. Some hedge fund managers made over a billion dollars in 2006. The money 'earned' by one person would pay the salaries of 40,000 Wal-Mart workers, who are mostly women.
In a country that values democracy and equal opportunity, those who support income inequality as a long-term benefit should ask themselves if any one man is worth 40,000 workers, and they should get to know some of the millions of people who have little to show for making our country more productive.
Paul Buchheit is a professor with the Chicago City Colleges, co-founder of Global Initiative Chicago (GIChicago.org), and the founder of fightingpoverty.org. He is the editor and main contributor to the forthcoming book "American Wars: Illusions and Realities" (Clarity Press). He has contributed to commondreams, counterpunch, alternet, and countercurrents.
[email protected]
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