Tuesday, November 08, 2011

On the urge to occupy [Bryan]

I'm not a huge fan of the "protest-left," so I have mixed feelings about the Occupy Wall Street people. I think their energies could be much better employed actually engaging in partisan politics, like the Tea Partiers did when they took over the agenda of a major political party.

However, there is no denying that the OWS folks have brought attention to a real problem. You don't have to be a militant egalitarian to acknowledge that a country is sick when it has such vast and growing income disparities as we have now. The top 1% has done really, really well over the past 30 years, much better than other income groups. This has led to an enormous amount of political power given to a small group of people (almost an oligarchy).

Meanwhile, conservatives' unrelenting goal seems to be to preserve and extend lower tax rates for these favored few -- notwithstanding our big deficits, crumbling roads and bridges, and a decimated public service sector. Mitt Romney's economic plan, to name just one example, would include a $6.6 trillion tax cut that would primarily benefit wealthy individuals and corporations (source), thus making the all of these trends even worse. Personally, I don't have anything against people who have made a lot of money, at least when it is made through their hard work and initiative rather than through social privilege and bailouts. I wouldn't mind making more money myself. Asking people who have done very, very well over the past 30 years to pay a moderately higher tax rate seems both fair and pragmatic. You don't have to "hate the rich" to see this is good policy. Conservatives who are concerned with social stability should recognize this as much as anybody.

Anyway, below I've prepared a fun array of charts (fun for me anyway) to illustrate what is happening and why.

The above chart tells the story told in terms of the growth of average income. The income of the top 1% (the red bar) has grown much more than the average family income (the blue bar) since 1979.

Above is roughly the same information broken down by income group. The income of the the top 1% (the red line) has grown by an astonishing 281%, much more than other groups.

Here is story told in dollar amounts. Again, massive growth for a few, while everyone else is flat.

The story by income share. Key point: The growth in income of the top 1% has come at the expense of other groups. A rising tide is not lifting all boats.

Here is one reason why this has happened: Tax rates for the wealthiest have plummeted lately, even as they make much more money.

Meanwhile, many corporations still pay no taxes. It is true that America on paper taxes corporation at a fairly high rate compared to other countries (perhaps too high). However, the loopholes and subsidies allow many corporations to pay a tiny fraction of their assigned tax rate.
Another reason for the stagnation of the middle class has to do with the declining influence of unions. Again, you don't have to think unions are perfect (I sure don't) to recognize that they have played an important role in making sure that everyone benefits from economic growth.

2 comments:

roger said...

hmm. I'm not entirely convinced that money "guarantees" increased political power...

Bryan and Ellie said...

Fair enough. But money certain helps if one wants political power, no? There is a reason that the average income of a member of congress is much, much higher than the average of his or her constituent.