Multi-billionaire Warren Buffett has acknowledged that the super-rich have waged class warfare on the middle and lower classes, and they have decisively won the conflict. The last three to four decades have witnessed a massive redistribution of wealth from the middle class to the top 1 percent.
A 2011 study by the Congressional Budget Office stated that between 1979 and 2007, the average income of the top 1 percent of households increased 275 percent, while that of the middle 60 percent of households only increased 40 percent. The Bush recession disproportionately harmed the middle and lower classes, further exacerbating this inequality.
Tax policies that favor the rich have substantially contributed to this financial disparity. The top 1 percent possessed 42 percent of the country’s financial wealth in 2010. This top 1 percent paid only 21.6 percent of total taxes in 2009.
From 1979 to 2007, the top 400 incomes increased 392% while their average tax rate decreased 37%. In the 1960s, the typical corporate CEO’s income was equal to the incomes of 40 workers; in 2007 that ratio was over 1 to 300. Most of the income of the super-rich consists of capital gains and dividends, which are taxed at a lower rate than income earned from actually working at a job. This is one reason Mitt Romney gets away with an effective tax rate of 14 percent on $13.7 million annual income, while workers who earn 1 percent of his income pay roughly twice the percentage in taxes. This huge tax advantage is justified by “job creation.” But where are all these jobs created by the privileging of certain sources of income? In China? With the massive increase in the fortunes of the super-rich, we would be blessed with an abundance of jobs and a very low unemployment rate if the trickle-down notion of economics was actually valid.
Multi-millionaires and billionaires are pouring hundreds of millions of dollars into efforts to elect Republicans. Why are they doing this? Not to benefit the middle class. They are convinced that Romney/Ryan and other Republicans will serve their interests by deregulating Wall Street and perpetuating, even expanding, tax policies that benefit the rich. The inequality of wealth in this country is already bad enough. If the wrong politicians are elected this November, things will get a lot worse for the vast majority of us.
Robert Blake is a Columbia resident.