We're Not Broke, Just Twisted: Extreme Wealth Inequality in America

Unnecessary Austerity, Unnecessary Shutdown
By Chuck Collins, Alison Goldberg, Scott Klinger, Sam Pizzigati

Reversing tax giveaways to the super-rich and the nation's largest corporations could raise $4 trillion within a decade and avert possible government closures.

"We're broke."

Or so claim governors and lawmakers all over the country. Our states and our nation can no longer afford, their plaint goes, the programs and services that Americans expect government to provide. We must do with less. We need "austerity."

But we're not broke. Not even close. The United States of America is awash in wealth. Our corporations are holding record trillions in cash. And overall individual wealth in the United States, the Credit Suisse Research Institute reported this past fall, has risen 23 percent since the year 2000, to $236,213 per American adult.

We have, these indicators of overall wealth suggest, survived the Great Recession quite nicely. So how can average families — and the national, state, and local governments that exist to serve them — be doing so poorly? Why do "deficits" dominate our political discourse? What explains the red-ink hurricane now pounding government budgets at every level?

This Tax Day report identifies two prime drivers behind our current budget "squeeze."

One, we have indeed become wealthier than ever. But our wealth has become incredibly more concentrated at our economic summit. U.S. income is cascading disproportionately to the top.

Two, we are taxing the dollars that go to our ever-richer rich — and the corporations they own — at levels far below the tax rates that America levied just a few decades ago. We have, in effect, shifted our tax burden off the shoulders of those most able to bear it and away from those who disproportionately benefit from government investments the most.

These two factors — more dollars at the top, significantly lower taxes on these dollars — have unleashed a fiscal nightmare. Can we wake up in time to avoid the crippling austerity that so many of our political leaders insist we must accept?

This report offers both an analysis of our current predicament and a series of proposals that can help open our eyes to a far more equitable — and brighter — future.

Key Tax Facts

15,753: The number of households in 1961 with $1 million in taxable income (adjusted for inflation).

361,000: The number of households in 2011 estimated to have $1 million in taxable income.

43.1: Percent of total reported income that Americans earning $1 million paid in taxes in 1961 (adjusted for 2011 dollars)

23.1: Percent of total reported income that Americans earning $1 million are likely to pay in taxes in 2011, estimated from latest IRS data.

47.4: Percent of profits corporations paid in taxes in 1961.

11.1: Percent of profits corporations paid in taxes in 2011.

http://inequality.org
http://ips-dc.org

Category:

News & Politics

Tags:

• Taxes
• US
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• Inception
• Chuck
• Collins
• Alison
• Goldberg
• Scott
• Klinger
• Sam
• Pizzigati
• austerity
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• Equality
• Inequ

[PeachMcD]

The cure: a constitutional amendment clarifying that corporations are NOT PERSONS. Corporations have no conscience, no limit to their lifespan, and no purpose except to amass profit. Calling them 'persons' and giving them constitutional rights was the undoing of democracy and the beginning of fascism (which Mussolini defined as the "melding of corporation and state."

[BillGoose1313]

I don't have a problem with "the wealthy" - it's this disturbing trend of "ultra-wealth" which bothers me. Having millions is no longer enough now people want 100's of millions or billions in their portfolio and they're obtaining it through destruction of the country rather than building it up the way the wealthy did at the turn of the century.

[stupidtrooper501]

@nyctoo i can assure you most corporate start ups are not very successful that's why they are classified as high risk investments. if he (romney) is investing in successful companies it because he is investing in companies with good track record, something that start ups don't have.

[stupidtrooper501]

@nyctoo funny thing is the more the market is left alone the more it fucks up, how else do you explain the the 2008 crash. oh right it was freddie mae and fannie mac that caused it and not the market shift from long term safe investments to short term risky investments, deregulation of CDCs and the lack of a crackdown on predatory lending

[nyctoo]

@stupidtrooper501 How is his money spent recklessly if he was investing in successful companies? If he made money, it seems smart to me.

[nyctoo]

@stupidtrooper501 More government? Haha, no thanks. Everything the government does besides war, fails. Let the free market work itself out, and it will, well, until the government comes along and fucks it up.

[stupidtrooper501]

@stupidtrooper501 sorry "so his money is NOT spent recklessly"

[stupidtrooper501]

@nyctoo the rich only pay payroll tax up to the current limit of about $100,000 that means that after you earn $100,000 the rest is payroll tax free, and that's IF you earn your money through salary. Romney wouldn't invest in little start ups that may or may not succeed as a smart investor he would instead go for companies that are successful so his money is spent recklessly.

[stupidtrooper501]

@nyctoo the middle class and small business would not be crushed by an increase in capital gains tax because most small businesses are proprietorships so Mr. rich couldn't buy socks for small business M because they don't exist. another point is that after 2009 thought the stock market stabilized the US still lost jobs. lastly it is actually the government that does a better job of investing in small companies because the gov is not as interested in the returns as investors are

[nyctoo]

@stupidtrooper501 And to add to that, small businesses started by the middle class would be crushed if the capital gains tax were raised. Businesses like Facebook wouldn't exist because the rich would be more frugal on what business would be successful for them to invest in. It would crush the small business sector and stifle innovation.

[nyctoo]

@stupidtrooper501 Romney gets his money for 15% because of the capital gains tax. That is money he receives from the sale of stocks, bonds, precious metals and property. Guess how be bought those things originally? He bought it with the money he earned that was taxed via the income tax. So basically he is taxed on investing in something that will become successful, and then it does, and he profits. WTF are you talking about other wise? He rich pay payroll tax and sales.

[stupidtrooper501]

@nyctoo yes but the rich pay less payroll tax, sales tax, etc. apart from that most of those 50% don't pay income tax because they are too poor. lastly income tax is only one fifth of all the revenue for the government. besides care to explain how Romney is estimated only have 15% tax rate on his income?