The Congressional Budget Office on Tuesday released a study of household wealth distribution trends between 1989 and 2019.
During those 30 years, the richest 1% of families increased their share of the total national wealth from 27% to 34%. Families in the lower half of the economy now own just 2%.
Meanwhile, a record share of the country’s wealth remains in the hands of the country’s billionaires, who also pay a lower tax rate than the average American.
How do the super-rich justify their wealth and lower tax rates? Using three myths – all of which are absolute nonsense.
The first is the economics of distribution.
Billionaires (and their advocates) claim that their wealth flows to everyone as they invest it and create jobs.
really? For more than 40 years, with wealth soaring at the top, almost nothing has been taken away. Adjusted for inflation, average wages today are barely higher than they were four decades ago.
Trump offered a massive tax cut to the richest Americans, promising that he would bring in a $4,000 increase in income for everyone else. did you receive it?
In fact, the wealthy do not create jobs or raise wages. Jobs arise when ordinary working people earn enough money to buy all the goods and services they produce, which leads companies to hire more people and pay them higher wages.
The second myth is the “free market”.“.
Rich people claim that they are rewarded through the impersonal market for creating and doing what people are willing to pay for.
Other Americans’ wages have stagnated, they say, because most Americans are less valuable in the market now that new technologies and globalization have made their jobs redundant.
Bullshit. Even if they were rewarded, there is no reason why the “free market” would reward enormous multiples of what the wealthy were rewarded with decades ago.
The market can bring about great breakthroughs of invention and entrepreneurship with the temptations of hundreds of thousands or even millions of dollars – not billions.
As for the rest of us to succumb to labor-displacing globalization and labor-saving technologies, no other developed country has nearly the degree of inequality that exists in the United States, yet all of these nations have been exposed to the same forces of globalization and technological change. .
In fact, very wealthy people own fake The so-called “free market” in the United States for their own benefit. Billionaires campaign contributions rose from a relatively modest $31 million in the 2010 election to $1.2 billion In the most recent presidential term – almost 40 times.
What did they get for their money? Tax cuts, freedom to crush unions, market monopolies, and government bailouts. Their pockets have been lined up through privatization and deregulation.
The third myth is that they shigher than humans.
They portray themselves as “self-made” Cruel individuals who “did it alone”, thus deserve Billions of them.
Bobkis. Six out of 10 The richest Americans alive today are heirs to the fortunes they inherited from their wealthy ancestors.
Others had the advantages that come with wealthy parents.
Jeff Bezos’ garage-based start-up was funded by an investment of a quarter of a million dollars from Jeff Bezos fathers and mothers. Bill Gates Mother She used her business contacts to help get the software deal with IBM that Microsoft made. Elon Musk came from a family that is said to own shares in emerald mine in south africa.
Don’t fall in love with these three myths.
Flow-down economics is a cruel joke.
The so-called free market has been discredited by the huge campaign contributions of the super-rich.
Don’t mock the rich as “self-made” superior people who are worth their billions. They were lucky and had relationships.
In fact, there is no justification For the extraordinary concentration of wealth today at the top. It distorts our politics, falsifies our markets, and gives unprecedented power to a handful of people.
The last time America faced anything similar was at the beginning of the 20th century.
In 1910, former President Theodore Roosevelt warned That “a small class of wealthy and economically powerful men, whose chief aim is to retain their power and increase their power” could destroy American democracy.
Roosevelt’s answer was to tax wealth. An estate tax was enacted in 1916, and a capital gains tax in 1922.
Since that time, both have eroded. As the rich accumulated more wealth, they also gained more political power – and used that political power to lower their taxes.
Teddy Roosevelt understood something about the American economy and the now re-emerging wealthy, even more extreme and more dangerous. We must understand it, too – and act.