Wealth inequality in America worse than you think it is

This video on wealth inequality in the U.S. has gone viral within days, and for good reason. It painstakingly goes through several graphics to get across some basic, staggering facts about who owns America.

The data used in the video is from 2007. Data from 2010 show that it’s getting even worse. There has been a 4% shift in the distribution curve from poorer to wealthier. The top 10% of the population own 77% of wealth (up from 73%), and the bottom 90% own 23% of wealth (down from 27%).

Net worth and financial wealth distribution in the U.S. in 2010 (Source: Wolff, E. N., The Asset Price Meltdown and the Wealth of the Middle Class, New York: New York Univ., 2012)
Net worth and financial wealth distribution in the U.S. in 2010 (Source: E.N. Wolff, The Asset Price Meltdown and the Wealth of the Middle Class, NY: NYU, 2012)

If you want some really in-depth numbers, including the jaw-dropping racial disparities, see this article by G. William Domhoff of the University of California, Santa Cruz. The bottom line: “Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.”

The video is not only presents the facts so we can “get” them but points out the gap between reality and perception. We get that things are skewed. Yet we so vastly underestimate the extent of wealth inequality that you have to wonder whether the myth of a classless America is so impermeable and right-wing propaganda so relentless, that we simply can’t see what is staring us in the face.

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Tent of Dreams: A final act of defiance

by John Zangas

It was the final act of defiance by Occupy DC, a group of people who had given their last ounce of effort in protest, their last will in a park occupation–against a system we saw as repressive. In the previous three years, millions of people had lost their homes, and millions more had lost their jobs and savings. Ordinary people climbing the ladder to the American Dream slipped and lost their foothold forever.

Why did we erect the Tent of Dreams? The bankers and stock traders on Wall Street, who nearly destroyed the economy by the summer of 2008, silently slipped under the radar of legal prosecution. Yet occupiers who expressed dissatisfaction with lack of economic opportunity were being arrested by the thousands, merely for exercising their First Amendment right to dissent. What drove us was the fundamental imbalance of power, which was made even more apparent as the Occupy movement unfolded. Occupiers were arrested around the country in an arbitrary enforcement of the law, while financial managers went unpunished, still raking in millions in fraudulent profits.

Four days before we raised the Tent of Dreams, the U.S. Park Police had left official letters on our tents, warning us that we were no longer welcome. We knowingly were breaking a federal statute which forbade sleeping in tents in public parks.

So we created a symbol of a dream–a huge blue tarp painted with falling stars, symbols, and statements of hope. Just before noon on January 30, we used long poles and strung it up over the statue of McPherson, a brass symbol of state power. We encircled it and chanted, “We are the 99 percent!” and defiantly willed the state to come and take it down!

We hunkered down and stayed together under the blue tarp, taking turns on the nightwatch for an imminent police raid. It did not come the first exuberant night, nor did it come on the second or third nights. Guitars played, drums beat, coffee was served. Camaraderie kept us assured that we were doing the right thing. Defiantly we stood together, sleepless sentinels against the inevitable.

Some of us managed to stay up the first night until dawn without sleep under that blue tarp in a “sleep strike.” We persevered for four days and nights before the last of us caved in to exhaustion. By the fifth day, our fear turned into boredom.

Little did we know that the raid police planned for February 4th would change us forever.

Taxes hitting Romney hard–really, really hard

Mitt Romney estimates his federal income tax rate to be 15%, and here’s a point of comparison with the rest of us, the so-called 47%. As the chart shows, federal income taxes include individual income tax rate, payroll tax, corporate tax and estate tax–not just taxed salaries and wages, and capital gains. (Hard to know why capital gains would even be included under this strict definition of federal taxes–oh, except that it’s mainly the victimized wealthy class paying them.)

So, Mitt Romney is paying the same effective tax rate as an American household making $50,000. Just happens to be the median income. Of course, if Mitt is shelling out $2 million dollars to meet his 15% pound of flesh, he’s suffering a whole lot more than a family of four handing over $7,500. That’s just obvious. It’s penalizing success!

Tax the corporations, tax the uber-wealthy

Photo by Lisa Norwood

It’s tax day, 2012! As you press the key to electronically file your taxes, or make the frenzied trip to the post office as I did, let’s contemplate another year when Congress wailed over the country’s debt yet failed to tax corporations and the super-rich.

This just in: Senate Republicans blocked the proposed minimum tax on top earners known as the Buffett Rule. No surprises there.

Common Dreams has two good articles addressing the plight of the rich in America. “Five Reasons Why The Very Rich Have NOT Earned Their Money” gives you some facts to back up what you intuitively know: American workers aren’t losing ground because they’re lazy.

So workers have TRIPLED their productivity over 30 years while the richest 1% have TRIPLED their share of income. Worker pay remained flat as the top 10% took almost all the productivity gains since 1980.

Tax victimhood is the refuge of the rich. Titans of entrepreneurship are carrying average American leeches on the back of their tax burdens, right? Well, no.

Real tax rates for the richest Americans have gone way down over the last 30 years, from 34% in 1980 to 23% in 2006. Yet the 1% claim they pay most of the taxes. They don’t, if all taxes are considered. Based on recent data from the Center on Budget and Policy Priorities, the total of all state and local taxes, social security taxes, and excise taxes (gasoline, alcohol, tobacco) consumes 22% of the annual incomes of the poorest quintile. For the top 1% of Americans, the same taxes consume less than 10% of their incomes.

In “The Rich Are Different from You and Me – They Pay Less Taxes,” Bill Moyers gives us the straight story on corporate profits and gluttonous CEO’s:

In a story headlined, “For Big Companies, Life Is Good,” The Wall Street Journal reports that big American companies have emerged from the deepest recession since World War II more profitable than ever: flush with cash, less burdened by debt, and with a greater share of the country’s income. But, the paper notes, “Many of the 1.1 million jobs the big companies added since 2007 were outside the U.S. So, too, was much of the $1.2 trillion added to corporate treasuries.”

To add to this embarrassment of riches, the consumer group Citizens for Tax Justice reports that more than two dozen major corporations  – including GE, Boeing, Mattel and Verizon — paid no federal taxes between 2008 and 2011. They got a corporate tax break that was broadly supported by Republicans and Democrats alike.

Last year, among the 100 best-paid CEOs, the median income was more than $14 million, compared with the average annual American salary of $45,230. Combined, this happy hundred executives pulled down more than two billion dollars.

Also not to be missed: The Nation features a slide show of “Ten CEOs Who Tax-Dodged Their Way to Riches.”

The 1 Percent isn’t a figment of the 99 Percent’s imagination.

Winter is over, American Spring begins

“They’re counting on our silence and our apathy. We should not grant them that.”

Noam Chomsky is not a rousing speaker–but his words are forceful and true. Occupy officially emerges from winter hibernation today for the American Spring.

Why We Occupy

Note that hedge fund manager John Paulson would have a stack of bills 370 times taller than Goldman Sachs CEO Lloyd Blankfein.

Modest Needs for Hard Times

There’s hard times out there. Here’s a charity with a simple and direct mission:

Founded in 2002, Modest Needs is an award-winning public charity with a simple but critical mission: we work to stop the cycle of poverty BEFORE it starts for the low-income workers whom conventional philanthropy has forgotten.

We do this by empowering compassionate members of the general public to safely and securely help hard-working, low-income households to afford the kinds of short-term emergency expenses that we’ve all encountered before: the unexpected car repair, the unanticipated visit to the doctor, or the unusually large heating bill, for example.

Since 2002, by working together in this very ‘modest’ way, Modest Needs’ donors have stopped 10,281 low-income individuals and families from entering the vicious cycle of poverty and a lifetime of dependence on the public welfare system for their survival.

And, through our unique Non-Profit Grant program, we simultaneously empower our donors to invest directly in small non-profit organizations struggling to serve their communities, but whose needs are generally too small to be considered a funding priority by larger, more conventional grant-makers.

100% of every contribution goes directly to low-income individuals and families who’ve requested assistance. The average grant to recipients is $380.

Read testimonials and the Modest Needs blog.