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The 1% and the 47%


US Politics & Gov't  (tags: abuse, americans, candidates, corruption, dishonesty, elections, ethics, healthcare, housing, lies, media, politics, propaganda, republicans )

Kit
- 760 days ago - truth-out.org
Liberals and others have given Mr. 01 Percent Mitt Romney a well-deserved spanking for his vicious comments on "the 47 percent" at an elite fundraiser earlier this year.



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Kit B. (276)
Monday September 24, 2012, 2:18 pm
(Photo: Jim Wilson / The New York Times)


The narcissism of the few.

Liberals and others have given Mr. 01 Percent Mitt Romney a well-deserved spanking for his vicious comments on "the 47 percent" at an elite fundraiser earlier this year. I am referring, of course, to the following noxious statement we recently learned the Republican presidential hopeful made to an elite gathering of right wing election investors in the Boca Raton mansion of private equity manager Marc Leder last May:

"There are 47 percent of the [American] people who will vote for the president no matter what....there are 47 percent who are with whom, who are dependent on government, who believe they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it....That's an entitlement. And the government should give it to them. And they will vote for this president no matter what."

"These are people who pay no income tax. 47 percent of Americans pay no income tax. So our message of lower taxes doesn't connect...my job is not to worry about those people. I'll never convince them to take personal responsibility and care for their lives..."[1]

It is hard to process the moral and intellectual idiocy of this rant. Here is the fantastically opulent arch-parasite Romney a man who made an "equity capitalist" fortune destroying working class jobs and storing his profits in overseas tax havens mocking the elementary civilized notion (once memorably enshrined in the U.S.-signed United Nations' Universal Declaration of Human Rights[2]) that human beings are entitled to food, health care, and shelter. Does he really believe that nearly half of all Americans think of themselves as "victims" who rightfully depend on government in a country where most support work requirements for public family cash assistance (introduced in the name of "welfare reform"15 years ago) and where 58 percent of the population believes they belong in the category of "the haves," not "the have-nots"[3] (this even as the U.S. Census Bureau announced that half the U.S. population is officially poor or low-income)[4] Does Romney really think that close to half the population takes no personal responsibility for their own lives? And that receiving any assistance from the government (i.e., a Medicare check, Veterans benefits, Social Security payments) is an abdication from such responsibility?

For what its worth (very little in Romney and Leder's insulated .01% world), the majority of U.S. households pay more than a quarter of their income in total taxes, including payroll, local, state, and sales levies as well as federal income taxes. This is a higher tax rate than Romney and other hyper-affluent folks pay, as billionaire Warren Buffett points out. As New York Times columnist Nicholas Kristof observed last Thursday, "the 47 percent" (actually closer to 46 percent) Romney ridiculed for not paying federal income taxes "includes many...modestly paid workers and retirees who have contributed far more meaningfully to America than some who can shell out $50,000 to attend a fund-raiser like the one where Romney spoke in May...What," Kristof asks, "about the underpaid kindergarten teacher in an inner-city school? What about young police officers and firefighters? What about social workers struggling to help abused children?"

Did Romney really mean to denounce as indolent moochers American troops who pay no federal income taxes as they slog through deadly tours of imperial duty in Afghanistan and who depend on government benefits when they return to "the homeland"?

"One lesson," Kristof notes, "is the narcissism of many in today's affluent class. They manage to feel victimized by the tax code even as they sometimes enjoy a lower rate than their secretaries and ride corporate jets acquired with the help of tax loopholes."[5]

Deepened Inequality and the 1 Percent's Tax Burden

That's very well said, but let's dig a little deeper. Do the wealthy few pay a disproportionate share of the nation's income taxes? Yes, actually they do. As Wall Street Journal reporter and author Robert Frank notes in his latest book The High-Beta Rich:

"Just as they've taken over the consumer economy with their outsized incomes, spending, and wealth, America's millionaires are also becoming the dominant funders of the federal and state governments."

"The top 1 percent of Americans now earn 20 percent of the nation's income and pay more than 38 percent of its federal income taxes. For many state governments, their share is even higher. In New Jersey, the top 1 percent of earners paid 40 percent of income taxes in 2008. In New York, the 1 percent pay about 42 percent, with Wall Street and the financial services business accounting for more than 20 percent of all state wages. In Connecticut, residents making more than $1 million a year (near the top half of the top 1 percent) accounted for more than a quarter of the state's income taxes."[6]

At both the federal and state levels, the disproportionate share of revenue coming from "the 1 percent" has risen in recent decades. Does this reflect an upsurge of progressive taxation on behalf of the supposed "47 percent" moocher mass that Romney identifies with the Democrats, the purported party of government dependency? No, it doesn't. It's mainly about the stunning concentration of wealth and income that occurred over the last three-plus decades, culminating the in New Gilded Age of 1990 to 2007, when the number of millionaire households in the U.S. doubled from 5 to 10 million and the number of U.S. households with more than $10 million of net worth rose from a quarter a million to more than half a million. This all took place while wages and salaries stagnated for most Americans.[7]

During the nation's weak expansion between 2002 and 2007, the top 1 percent (3 million people) received fully two-thirds of the nation's income growth. The other 99 percent got "one-third of the gains to divide among 310 million people."[8]

It got worse after the Great Recession, itself very much a result of the nation's extreme economic inequality (see below). The top 1 percent garnered no less than 93 percent of the nation's gains during 2010, the first full year of technical economic recovery.[9]

Some states (Frank mentions Maryland, New Jersey, New York, and California) have hiked top tax rates and introduced "millionaire taxes" to enhance revenue. Still, as Frank notes:

"The bulk of the increase [in the share of income taxes paid by the top hundredth] ...is driven by the growing share of the national income going to the top 1 percent. The top 1 percent of earners in the United States accounted for 20 percent of income in 2008, more than double their share in the 'magic year' of 1982. In California, the top 1 percent accounted for quarter of state income, up from 14 percent in 1993...If America has become a land of representation without taxation, with the bottom 40 percent paying little or no federal income taxes, it's largely because so many Americans are now underrepresented in the country's income pyramid (emphasis added)."[10]

"Failure By Design" in the Best Democracy Money Can Buy

Why has the income structure shifted so dramatically towards the top, making state and federal governments more and more dependent on the wealthy for revenues? That, interestingly enough, is largely a matter of government policy on behalf of "the 1%" in America, "the best democracy that money can [and did] buy." U.S. economic growth since the late 1970s has been slow and unequally distributed thanks to a number of regressive policy choices that have served the rich and powerful at the expense of ordinary working people and nearly everyone else. The problem has not been that that "the economy" has been broken by the supposed "invisible hand of the market" or other forces allegedly beyond human control. The real difficulty is that the "human-made" U.S. economic system has been working precisely as designed to distribute wealth and power upward. This outcome has been achieved with the visible political hand of policy. As Joshua Bivens of the Economic Policy Institute showed last year in his important study Failure By Design: The Story of America's Broken Economy, the following interrelated, bipartisan, and not-so "public" policies across the neoliberal brought this terrible outcome across the long neoliberal era:

Letting the value of the minimum wage be eroded by inflation. Slashing labor standards for overtime, safety, and health. Tilting the laws governing union organizing and collective bargaining strongly in employers' favor. Weakening the social safety net. Privatizing public services. Accelerating the integration of the U.S. economy with the world economy without adequately protecting workers from global competition. Shredding government oversight of international trade, currency, investment and lending. Deregulating the financial sector and financial markets. Privileging low inflation over full employment and abandoning the latter as a worthy goal of fiscal and economic policy. These policies increased poverty and suppressed wages at the bottom and concentrated wealth at the top. They culminated in the Great Recession, sparked by the bursting of a housing bubble that resulted from the de-regulation of the financial sector and the reliance of millions of Americans on artificially inflated real estate values and soaring household debt to compensate for poor earnings. Thanks to flat wages and weak social expenditures, the tepid expansion of the early 2000s (the weakest upward business cycle on record)[11] depended on an unsustainable upward climb of home prices. The epic collapse that followed generated millions of foreclosures and devastated savings and net worth across the working and middle classes. It brought an official unemployment rate that reached 10 percent (real unemployment went considerably higher) and the longest recession since before World War II. The crash was foreseen by many, including financial interests who failed to warn households on the dangers of taking out more debt to buy homes. It didn't have to happen. As Bivens notes:

"Policy makers found plenty of resources to throw at tax cuts aimed disproportionately at corporations and the very rich and at wars abroad. And when partisan politics demanded it, resources were also found to enhance Medicare coverage by adding a prescription drug benefit but only when bundled with flagrant giveaways to pharmaceutical companies and other corporations. If even a fraction of these resources had found their way into well-targeted interventions to boost the job market, the decade could have been very different, with wage growth supporting living standards instead of debt...."

But faster wage growth would have "threatened the only economic indicators that performed above-trend in the 2000s: growth in corporate profits."[12] And that was unacceptable to the corporate and financial elites who dominate policy by virtue of their wildly disproportionate wealth and power, regardless of which of the two dominant political organizations holds nominal power in the White House and/or Congress.

Democrats are barely less prone to challenge the basic plutocratic policy mix for a number of reasons, including the ever-skyrocketing cost of elections, which serious candidates cannot hope to meet without massive backing from the filthy rich.

If Romney and their ilk want to know why the rich bear such a large share of the nation's income tax burden to pay for "big government" these days, they should look at how they influenced big government precisely to serve their interests to concentrate wealth and income in ever fewer hands, to downgrade the middle and working classes, and to expand the ranks of the poor. As the rich never admit, they aren't really anti-government. They are for big government that serves elite interests and punishes the rest. When their so-called free market medicine replete with giant doses of corporate welfare (the Pentagon System is a leading example) impoverishes the rest of us (and enriches the few) so much that we rely on them like never before for the revenue to keep government running, they mock us for thinking (in accord with the quaintly idealistic Universal Declaration of Human Rights) that we are "entitled" to food, shelter, health care, clothing, and economic and social security We are instructed to stop our "dysfunctional" thinking about "Who Moved My Cheese,"[13] take a whiff of tough-love self-help smeller salts, and scurry on to sniff out new opportunities that don't actually exist under the rule of the nation's unelected and interrelated dictatorships of money and empire: "Take 'personal responsibility' for your fate in this world we made for you, or starve and die, you bothersome little mice-people![14] You have no right to government assistance that is reserved for the rich and powerful, like everything else." It's a curious command from those who have become ever filthier rich thanks in great part to big government's role in serving and protecting the already well-off.
**** see Visit Site for full list of foot notes ***


By Paul Street, ZCommunications | Op-Ed | Truthout |
 

JL A. (275)
Monday September 24, 2012, 2:19 pm
A couple of stand out sentences:
"It is hard to process the moral and intellectual idiocy of this rant."

"Why has the income structure shifted so dramatically towards the top, making state and federal governments more and more dependent on the wealthy for revenues? That, interestingly enough, is largely a matter of government policy on behalf of "the 1%" in America, "the best democracy that money can [and did] buy." U.S. economic growth since the late 1970s has been slow and unequally distributed thanks to a number of regressive policy choices that have served the rich and powerful at the expense of ordinary working people and nearly everyone else"

"As the rich never admit, they aren't really anti-government. They are for big government that serves elite interests and punishes the rest. When their so-called free market medicine replete with giant doses of corporate welfare (the Pentagon System is a leading example) impoverishes the rest of us (and enriches the few) "

And, as the old Laugh-In show used to say, "That's the truth........." and apparently at least 47% of Americans know these are the truth and so aren't buying the "idiocy" of the myth being spewed...
 

pam w. (191)
Monday September 24, 2012, 4:19 pm
JL....if I could give you another GREEN STAR...I would! Here's an IOU.
 

Terry King (109)
Monday September 24, 2012, 4:31 pm
I'm neither a member of the 1% or the 47%. I'm just the guy that pays 25% Federal Income Tax, 12% State Income Tax, and 9% California Sales Tax. Guess who Mitt will be calling on to shoulder the burden for the 1%ers!
 

Kit B. (276)
Monday September 24, 2012, 5:02 pm

Ain't it great, we are all lumped into a group of slackers because we will not vote for this man. We don't pay a state income tax in Texas, yet we have more then enough hidden taxes to keep us constantly paying. Just the property taxes alone are enough to keep us hoping for a break.
 

Jennifer C. (172)
Monday September 24, 2012, 5:23 pm
Thanks for the article.
 

Dandelion G. (380)
Monday September 24, 2012, 6:23 pm
"Failure By Design" in the Best Democracy Money Can Buy"

Letting the value of the minimum wage be eroded by inflation.
Slashing labor standards for overtime, safety, and health.
Tilting the laws governing union organizing and collective bargaining strongly in employers' favor.
Weakening the social safety net.
Privatizing public services.
Accelerating the integration of the U.S. economy with the world economy without adequately protecting workers from global competition.
Shredding government oversight of international trade, currency, investment and lending.
Deregulating the financial sector and financial markets.
Privileging low inflation over full employment and abandoning the latter as a worthy goal of fiscal and economic policy.

But, hey, everyone should be ok, after all they still allow us to have our guns and bibles. Come to Florida you even have the Stand Your Ground rule. Those westerns these white politicians grew up with must of given them a real longing for the good ole' days of the OK Corral. Women in the kitchen, modest dress down to their knees, work for next to nothing from sun up to sun down, health care is what you could do for each other or you died, yup, the good ole' days of the Railroad Barons now replaced with the Oil Barons.

 

Dandelion G. (380)
Monday September 24, 2012, 6:24 pm
typo above.....modest dresses down to their ankles.....
 

Dave C. (216)
Tuesday September 25, 2012, 9:41 am
heard an interesting stat that Pre-Reagan the 1% had 7% of the US wealth, now 25%.......
Dow nearly 100% above when Mr. Obama took office....no prosecutions of malpractice investment policies.....BIG POLLLUTION AND POISON (lets be honest and not just say OIL) getting record profits and little supervision......

seems like the 1% keep winning......and "small government" Greedy OIL POLLUTING politicians want to intercede more in deciding who votes and who one can marry and creating war.....

PEOPLE POWER!!!
 

Nancy M. (202)
Tuesday September 25, 2012, 11:42 am
Dave C- I have seen similar statistics. The middle class is losing ground for sure.
 

Tamara Noforwardsplz (185)
Tuesday September 25, 2012, 3:04 pm
Noted. Since I am disabled and collecting disability for the rest of my life, I guess I am one of the losers that make up the 47%.
 

Kit B. (276)
Tuesday September 25, 2012, 3:30 pm

I'd have to disagree with Tamara on that. The reason we all pay into social safety nets is because we all know that any one of us at time could be disabled, could be left without a means of support. That is where I want to see money going, I don't believe that disability is something to brag about nor be embarrassed about, it's just a part of life. Caring for each other is what gives us humanity.
 

marie c. (168)
Tuesday September 25, 2012, 4:45 pm
Noted thanks Kit
 
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