- Number of poor highest in 50 years, Sally Kohn says, as the rich get super rich
- Kohn: 25 major corporations last year paid their CEOs more than they paid in taxes
- Keeping taxes low for big business and rich does not create jobs, Kohn writes
- Working families need the money, she says, to spend and stimulate economy
According to new data released by the U.S. Census Bureau this week, median household incomes adjusted for inflation declined by 2.3% in 2010 over the previous year. The data also showed that 46.2 million Americans lived in poverty in 2010 -- the highest number in the 52 years the Census Bureau has been tracking such data. But that data is even more depressing in contrast to the skyrocketing fortunes of America's super-rich.
Between the second quarter of 2009 and the fourth quarter of 2010, our nation's total income rose by $528 billion. Of that economic growth, $464 billion went to pretax corporate profits. Just $7 billion went to wages and salaries. In other words, 88% of the brief recovery went to corporate profits and just 1% -- that's right, 1% -- went to workers, according to a study by economists at Northeastern University. By contrast, when the United States was recovering from a downturn in the early 1990s, 50% of the growth in the national income went to wages and salaries. (And actually, in that period leading up to the tech boom, average corporate profits declined 1%.)
It's not that working Americans aren't working hard. Worker productivity has risen steadily, but wages have still been stagnant. But the income of the top 1% of Americans? Rapidly rising.
At what point do we realize enough is enough -- that giving more and more money and power to big business and the super-rich will never translate into more jobs, better wages and a better economy but simply more yachts and luxury villas? At what point do we realize that conservative anti-tax extremism is nothing but blatant greed masquerading as lousy economics? At what point do we realize that class warfare isn't a liberal goal but in fact a conservative reality, advanced through decades of policies that help the rich cheat the middle class?
According to Republican economist and former White House adviser Bruce Bartlett, the actual tax rate paid by the wealthy and big business is the lowest in several generations.
Thanks to the Bush tax cuts, the super-rich paid an average of 17% on their federal income tax in 2007 -- less than many middle class Americans paid. For instance, multibillionare Warren Buffett pays a lower percentage of income tax than everyone else in his office, including the secretaries. In 1992, the rich averaged a 26% income tax.
A study earlier this month reported that 25 of the largest and most profitable corporations in the United States paid their CEOs more money than their entire corporations paid in taxes. Meanwhile, corporations are earning record profits and sitting on record cash reserves -- upwards of $2 trillion dollars.
Anyone who can look at these numbers and think the rich need more help is crazy. Stop calling big business the "job creators." They have all the resources imaginable and they're still not creating jobs. It's time to put more money in the pockets of working Americans so they can spend it, create demand and finally kick-start the economy.
President Barack Obama has proposed a comprehensive plan that will create good jobs while rebuilding America's infrastructure for the 21st century. In the president's plan, a portion of the costs will be offset by reducing the tax-deductible exemptions for well-off families, taxing hedge fund manager income as income rather than discounted capital gains, closing loopholes that give government handouts to the oil and gas industry and taxing corporate jets with the same depreciation schedule as personal jets. For crying out loud, why not? Why we should continue to let working Americans suffer while helping the super-rich get richer?
Most Americans agree with the president. Almost three in four Americans support raising taxes on the wealthy so we can put government to work getting all of America working again, according to a Washington Post-ABC News poll. In fact, even among Republican voters, raising taxes on the rich is more popular than cuts to Social Security or Medicare -- putting the leading Republican presidential candidates squarely out of touch even with their own base.
The definition of insanity is doing the same thing over and over again and expecting different results. We've already drastically cut taxes for the rich and corporations, which has only made them richer while our economy remains in the gutter and no jobs are created. But in light of the depth and breadth of our economic crisis, continuing to put the interests of a few wealthy people and big corporations ahead of the needs of millions and millions of struggling and suffering Americans isn't just insane. It's immoral.