SOAKING THE RICH….As everyone knows, America’s GDP has grown steadily and strongly ever since World War II, with only short and minor exceptions during occasional recessions. So riddle me this: as the economy grows, who should receive the fruits of that growth? Suppose over the next decade our GDP grows from $10 trillion to $13 trillion. Who should get that extra $3 trillion?
The short answer is: everybody. Workers ought to get 30% richer, bosses ought to get 30% richer, and the poor ought to get 30% less poor. There’s really no special reason that any one group should get a lion’s share of the increase, is there?
So why hasn’t that been the case over the past 20 years? Let’s take a look at reality:
In 1981, the top 5% of wage earners in the United States pocketed $488 billion.
Between 1981 and 2001, GDP increased 222%.
Therefore, you would expect that the rich would indeed have gotten a lot richer: 222% richer to be exact.
But if that were the case, the top 5% would earn $1,571 billion today.
The real number is $2,258 billion.
That’s a difference of $687 billion.
That means that the bottom 95% ? in other words, households making less than $150,000 per year ? have gotten $687 billion less than they would have if we had all shared equitably in the economic prosperity of the past two decades
Translation: if increasing prosperity had been equitably distributed, those households ? 100 million of them ? would have incomes today nearly $7,000 higher than they do.
It’s one thing to say that the rich have most of the money ? after all, that’s the whole point of being rich. But it’s quite another to say that as our country grows ever more prosperous, the rich should actually grow richer at a faster rate than anyone else.
But that’s the way the Republicans have convinced us the system should work, and they have systematically set about to implement policies that would make this happen. Instead of the 15% of national income they were satisfied with in 1981, today they get 22%. And at the same time, they insist that tax rates need to come down because we’re “soaking the rich.”
It’s just astounding. They get richer and richer, tax rates get lower and lower, and still they feel persecuted. 100 million households in America are earning $7,000 per year less than they should, because the rich have swallowed it up. And we’re supposed to feel sorry for them.
Who made up this story, anyway? And when is 95% of American going to wake up, realize they have been mightily ripped off over the past 20 years, and fight back?
NOTE: Just in case you want to do the arithmetic yourself, GDP figures are here and census figures showing the earnings of the top 5% are here (page 19).