Whenever a Democrat is in the White House, Republicans get all hot under the collar over the national debt and talk incessantly about cutting spending, as if cutting “discretionary” spending would make any significant dent in the debt. (Republicans have never dared cut military spending or Medicare or Social Security). When a Republican is in the White House, however, they seem fine with adding trillions to the debt pile and usually push for (or actually pass) tax cuts that benefit primarily the wealthy. Same story now. If Trump wins, he and his minions will certainly push for his previous tax cuts to stay in place and demand additional cuts, without any appreciable spending cuts to pay for them. So it goes.
Now, a few numbers:
• A 2018 RAND Corporation study1 calculated
that between 1975 and 2018, $47 trillion was shifted from Americans whose
taxable income was below the 90th percentile to Americans whose taxable income
was in the top 1 percent. In 2018 alone, the amount was $2.5 trillion. Assuming
this imbalance has persisted, by today, the shifted wealth would total $60
trillion.
• The poverty rate in America is 11.5,2
which means that 37.9 million Americans are trying to subsist on less than
$15,060 for an individual or $31,200 for a family of four.3 And this
is occurring in the richest country to ever exist on earth.
• 20 percent of Americans age 50 and over have no
retirement savings, and 61 percent worry they will not have enough.4
• Contrary to right-wing rhetoric, the United States
is one of the most undertaxed nations in the OECD (Organisation for Economic
Co-operation and Development, consisting of 38 countries). As a percentage of
GDP, U.S. tax revenues (federal, state, and local) ring in at 27.66 percent,
compared with the OECD average of 34.04 percent. If we take the average of 10 European
countries (France, Norway, Austria, Finland, Italy, Belgium, Denmark, Sweden, Germany,
and the Netherlands), their taxes are 42.24 percent of GDP.5
• In 2021, CEOs earned 399 times as much as a typical
worker, up from a 20-to-1 ratio in 1965 and 59-to-1 in 1989.6
When taken together, these
statistics show plainly that corporate capitalism is not working very well for
most Americans. The RAND study showed that between 1947 and 1974, income
distribution stayed about the same. But between 1975 and 2018, something
changed. If income distribution had stayed the same, a median worker who was
earning $36,000 in 2018 would have earned $57,000. That is 58 percent more. But
that money was redistributed upward. Can you imagine how different our economy
would be if that $60 trillion had stayed in the middle and lower classes? More
retirees would have enough to live on in their golden years. And the lower
income brackets tend to spend more on consumer goods, so the economy as a whole
would have been more robust.
Imagine what America could do if
Congress hadn’t enacted the Reagan, Bush, and Trump tax cuts that primarily
benefited those at the top. Given that our 2023 GDP was $27.36 trillion,7
if we had taxed at the level of the average OECD country, we would have had an
additional $1.75 trillion just in 2023 to pay down the debt, support our poor
and elderly, provide for our safety and security, and so much more.
If we had taxed at the rate of the
10 European countries listed above, we would have had an additional $3.99
trillion in 2023. With that much money each year, we could easily implement a
single-payer health-care system, like every other OECD country. Only in America
do we have 7.7 percent of our citizens without any health insurance (25.3
million people).8 Republicans, of course, keep trying to increase
that number.
Finally, CEO pay is completely
unacceptable. And the fact that the top 0.1 percent of Americans hold $20
trillion in wealth,9 while the bottom 50 percent hold $3.78 trillion
is obscene.10 This should never happen in a country with 582,500
homeless people.11 We can afford a comfortable standard of living
for every American. We just lack the benevolence and political will, primarily
on the right, to make it happen. If we would restore the pre-Reagan tax rates
and share more equitably the wealth that working people create, we would have
plenty of money to reverse our debt situation and provide a decent
standard of living for all Americans.
_____________
1. See https://www.rand.org/pubs/working_papers/WRA516-1.html.
4. See https://press.aarp.org/2024-4-24-New-AARP-Survey-1-in-5-Americans-Ages-50-Have-No-Retirement-Savings.
5. See https://www.oecd.org/en/data/indicators/tax-revenue.html?oecdcontrol-69798b0352-var8=PC_GDP&oecdcontrol-38c744bfa4-var1=OAVG%7CAUS%7CAUT%7CBEL%7CCAN%7CCHL%7CCZE%7CDNK%7CEST%7CFIN%7CFRA%7CDEU%7CGRC%7CHUN%7CISL%7CIRL%7CISR%7CITA%7CJPN%7CKOR%7CLVA%7CLTU%7CLUX%7CMEX%7CNLD%7CNZL%7CNOR%7CPOL%7CPRT%7CSVK%7CSVN%7CESP%7CSWE%7CCHE%7CTUR%7CGBR%7CUSA;
see internal link to Excel chart.
6. See https://www.epi.org/publication/ceo-pay-in-2021/.
9. See https://www.businesstimes.com.sg/wealth/top-0.1-saw-their-share-us-wealth-rise-even-rest-10-didn-t.
10. See https://fred.stlouisfed.org/series/WFRBLB50107.
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