Gap continues to widen between rich, poor

Curtis Powers

My first article for this week really hurt me to write. To be honest, I didn’t even want to write the opinion I wrote. Extend the Bush tax cuts for everyone, even the rich?

After watching the Frontline special on the federal debt and the Bush tax cuts, I never thought I’d advocate for that. That speaks to the situation we are facing economically right now.

I’d much rather be calling for the tax cuts to expire for wealthier folks. Look at the statistics for crying out loud.

The top 400 wealthiest Americans saw their net worth increase 8 percent this past year even with a poor economy. That list includes 109 people from the finance and investment industries — the very industries that got us into this mess.

The wealthiest 1 percent of Americans, those earning about $400,000 per year or more, now make almost 24 percent of all income, according to the IRS. This is the highest that number has been since the Great Depression.

The Center on Budget and Policy Priorities also found that the wealthiest 1 percent saw their incomes rise about 10 percent per year from 2002 to 2007 whereas the bottom 90 percent saw only an increase of 0.8 percent per year.

Meanwhile, our poverty rate of 14.3 percent is the highest it’s been since 1994 and one of the worst among developed nations. A record one in six Americans now are on a government anti-poverty program such as food stamps, according to USA Today.

Unsurprisingly then, the percentage of income earned by the non-wealthy has fallen. The bottom 90 percent of income earners, those earning $110,000 or less, has seen their percentage of income fall from around 65 percent in 1986 to around 52 percent in 2007.

The middle class as we know it is disappearing before our eyes. Gone are the 1970s when incomes were much more balanced out — the top 1 percent only made about 8 percent of all income then.

Welcome to the post-Reagan years and see the effects of supply side economics. See what constantly cutting taxes for the rich will do for you — from a top marginal rate of 70 percent in the early 1980s to 35 percent today.

Certainly there have been terrific economic booms, but there have also been tremendous busts as well. Things aren’t quite as stable as they were 50 years ago.

This has trickled down to college students as well. Roughly 80 percent of graduating college seniors in the past year moved back in with their parents compared to 63 percent in 2006, according to the Baltimore Sun.

As many of you know, it’s a little harder to find a job nowadays after you graduate.

If our economy wasn’t so fragile, I’d much rather be advocating for letting the Bush tax cuts expire for the wealthy in order to pay for the Obama tax cuts. The Obama tax cuts are known as the Making Work Pay tax credit.

That would help out about 95 percent of taxpayers — up to $400 for single people cut off at $75,000; $800 for married people cut off at $150,000. It would cost about the amount the wealthy would pay in new taxes.

It would also be a boost in the economy since most people who would receive the tax credit would spend it. I know I would. The Making Work Pay tax credit helped pay for a significant part of my spring tuition.

I will conclude with some quotes from Michael Snyder of He really drives the point home about how the rich are getting richer and the poor are getting poorer. It seems things are only going from bad to worse.

“In case you haven’t been paying attention over the past couple of decades, what we have in America today is a system that is designed to funnel as much wealth into the hands of the elite as possible.”

“This isn’t capitalism that we have in America in 2010. Instead, what we have created is a system where the laws are set up so that the power elite and their big, dominant corporations always win.”

“The power elite and the giant corporations they control spend millions and millions on lobbying and campaign contributions and they expect a big return on that investment.”

Five of the top 10 largest donors to Barack Obama were corporations.

It should also be noted that almost half of the members in Congress are millionaires — 237 of 535 — split fairly evenly between the two parties.

“And unfortunately for middle class Americans, the giant predator corporations that now dominate our economy are realizing that they don’t really need nearly as many American workers anymore.”

“Instead, they are slowly but surely shipping our jobs off to the other side of the world where workers are willing to work for about a 10th as much.”

“And yet we still run out to the ‘big box’ stores and fill up our carts with a bunch of plastic crap made on the other side of the world by these giant corporations.”

In the end, there are no easy solutions to this growing problem. It seems, though, that more people need to know there is a problem before solutions can be found.