With cunning and contempt and catechismal fervor the super-rich have argued that all money should move to the top, where it will be used to stimulate the economy and create jobs. But they ignore the facts that prove them wrong. And it doesn't take much to prove them wrong.
Based on , the richest 1% nearly tripled its share of America's after-tax income from 1980 to 2006. That's an extra trillion dollars a year. Then, in the first year after the 2008 recession, they took of all the new income.
Wealth is even more skewed. The richest 10% of financial wealth, which they've skillfully arranged to be taxed at just 15%, ostensibly because they pump that money back into job-creating ventures. More on that misconception later.
claim that wealth inequality has remained steady for the richest Americans. But shows that the excess wealth was simply redistributed among the rest of the top 5%, who saw their share of America's net worth increase by 18 percent from 1983 to 2007. It was also noted by that much of the top-level wealth was socked away tax-free overseas, a fact largely confirmed by a study.
While corporate have doubled to $1.9 trillion in less than ten years, the corporate , which for thirty years hovered around the 20-25% level, suddenly dropped to 10% after the recession. The biggest firms basically said "We're not paying."
That's a half-trillion dollars a year unpaid by the very companies who have successfully convinced much of America that their tax rates are too high.
The tax they actually pay is very low relative to other countries. U.S. corporations paid a of income taxes than all but two of the OECD countries analyzed by the Office of Management and Budget and the Census Bureau. A agreed, noting that the Tax/GDP rate for U.S. companies was 35% lower than the OECD average from 2000 to 2005.
Corporations even pay less than low-wage American workers. On their 2011 of $1.97 trillion, corporations paid $181 billion in (9%) and $40 billion in (2%), for a total income tax burden of 11%. The poorest 20% of American citizens 17.4% in federal, state, and local taxes.
The noted in 2009 that the Bush tax cuts led to the "worst track record for jobs in recorded history." 25 million people remain , with of recent college graduates in one of those categories. Among unemployed workers, have been without a job for six months or longer.
For the jobs that remain, most are low-paying, with the only real employment growth occurring in retail sales and food preparation. A recent report by the confirms that lower-wage occupations (up to about $14 per hour) accounted for 21 percent of recession losses and 58 percent of recovery growth, while mid-wage occupations (between $14 and $21 per hour) accounted for 60 percent of recession losses and only 22 percent of recovery growth.
The minimum wage is shamefully low, about than the inflation-adjusted 1968 figure. And the tiny pay can't be blamed on small business. Two-thirds of America's low-wage workers, according to another report, work for companies that have at least 100 employees.
owned by millionaires are held in a combination of low-risk investments (bonds and cash), the stock market, and real estate. costs made up less than 1% of the of high net worth individuals in North America in 2011.
Perhaps, instead, they're building businesses on their own? No. Only 3 percent of the CEOs, upper management, and financial professionals were in 2005, even though they made up about 60 percent of the richest .1% of Americans. A recent found that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds. They come from the middle class.
That deserves repeating. Entrepreneurs come from the middle class.
Not surprisingly, then, since the middle class has been depleted by the steady accumulation of wealth at the top, the number of has decreased 53% since 1977, and the number of self-employed Americans has decreased 20% since 1991.
First of all, the cash holdings for non-financial U.S. firms increased to in 2011, with about of it stashed overseas. Commerce Department figures that U.S. companies cut their work forces by 2.9 million from 2000 to 2009 while increasing overseas employment by 2.4 million.
The of cash, including Apple and Google and Intel and Coca Cola and Chevron, are also spending their money on stock buybacks (which increase stock option prices), dividends to investors, and subsidiary acquisitions. According to , share repurchasing is at one of its highest levels in 25 years.
Despite their unwillingness to invest in jobs, and even in the face of damning evidence against their tax myths, the super-rich fight like wildcats at any suggestion that they support the country that provided their wealth. Way back in 1984, right after the Reagan tax cuts, the came to the obvious but belated conclusion that tax cuts cause a loss of revenue. A 2006 study found that extending the Bush tax cuts would have no beneficial effect on the U.S. economy. have confirmed that economic growth was fastest in years with relatively high top marginal tax rates.
Ample evidence exists to show that between the capital gains tax rate and investment. As noted in the , "The top tax rate on investment income has bounced up and down over the past 80 years – from as high as 39.9 percent in 1977 to just 15 percent today – yet investment just appears to grow with the cycle, seemingly unaffected." In fact, the low rate may even have a negative effect on growth.
A states: "Capital gains tax rate increases appear to increase public saving and may have little or no effect on private saving. Consequently, capital gains tax increases likely have a positive overall impact on national saving and investment."
But the people who call themselves "job creators" do nothing to make that happen.
Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of "" (Clarity Press). He can be reached at [email protected]