"The bulk of a generation
of economic growth has been captured and concentrated in a few hands, and many
people have barely seen any of it."
Monday, December 09, 2019
New data released Monday
explains the numbers behind Sen. Bernie Sanders' often-cited statistic that the
three richest Americans hold more wealth than the 160 million people who make
up the bottom 50% of the population.
Washington Post columnist
Greg Sargent published what
he called "stunning" findings from UC Berkeley economist Gabriel
Zucman, showing how both an explosion in annual earnings by the rich and an
increasingly regressive tax structure have combined to allow the top 1% of
Americans' wealth to triple over the past five decades.
Meanwhile, working people are
taking home just $8,000 more per year than they did in 1970.
In what Sargent called
"the triumph of the rich, which is one of the defining stories of our
time," the richer a household is, the more its take-home wealth has grown
in the past 50 years.
The top 1% of earners make an
average of more than $1 million per year after accounting for taxes they pay, a
50-year increase of more than $800,000—100 times the growth rate of the bottom
50%.
The wealth of the top .1% is
five times larger than it was in 1970, while that of the top .01% is seven
times larger, at over $24 million in 2018.
Zucman and fellow
economist Emmanuel Saez, his co-author of the new book "The Triumph of
Injustice," provided a chart showing how each group of earners' take-home
pay has changed since 1970. The wealthiest Americans' assets skyrocketed by
millions of dollars even in the first decade of the 21st century—when people in
the bottom 50% saw their average take-home income decrease.
For middle-income earners
since 1970, income-plus-effective tax rates have gone from $44,000 to about
$75,000—a greater increase than those in the bottom 50% of earners, "but
still their income growth rate has been very low," Zucman told the Post.
Zucman, who with Saez advised Sen.
Elizabeth Warren (D-Mass.) on her Ultra-Millionaires Tax, emphasized that both
the explosion of yearly income at the top and the effective tax rates of people
in all income brackets must be taken into account to understand the massive
wealth gap.
"You have two trends
reinforcing each other," Zucman told the Post. "There has been
the rise in market income inequality—the rise in pretax income inequality. At
the same time, the tax system has become much less progressive at the top of
the income distribution."
"People have this idea
that government redistribution has upset some of the rise in inequality, but
essentially that's not the case," the economist added.
Zucman's findings were
revealed two months after New York Times columnist David
Leonhardt published a
graphic showing how in 2018, for the first time in U.S. history, the 400
richest Americans paid less in taxes than any other income group.
The richest Americans have
benefited from numerous changes to tax laws and enforcement in recent decades,
Sargent wrote, "including domestic and international tax avoidance, the
whittling away of the estate and corporate taxes, and the repeated downsizing
of top marginal rates."
Tony Annett of the Center for
Sustainable Development at Columbia University wrote that Zucman's research
shows how "it is no longer meaningful to rely on GDP" as a measure of
economic well-being, since the benefits of growth are no longer being shared
among all earners as they were in previous eras.
Seth D. Michaels of the Union
of Concerned Scientists described Zucman's findings as showing how many people
of his generation have seen the bulk of economic growth "captured and
concentrated in a few hands."
"The tiny number of
people raking in the overwhelming majority of the last 40 years of economic
growth are distorting the economy and the political system like a black hole,
everything falling toward their interests at high speed," Michaels wrote.
No comments:
Post a Comment