Kyra Lieberman – Staff Writer
The richest Americans, the top 0.1 percent, own more wealth than the bottom 80 percent combined.
Wealth is a means of security for families and futures that most Americans cannot afford to ignore. For the wealthiest, it is a means to consolidate power. They can and do influence politics and policy that affect all of us yet are intended for the gain of only a few. A fraction of a percent of our population owns the majority of our wealth, while those on the bottom — and even the disappearing middle class — struggle to secure basic living expenses. In the land of opportunity, shouldn’t everyone at least have the opportunity to eat?
Inequality has been steadily rising since the 1980s. The World Bank ranks inequality using the GINI index. A zero on the scale means perfect equality and a 100 is perfect inequality. In 1979, the U.S. had a rating of 34.6. At last estimate in 2016, that score was 41.5. The United States has the worst score of all western industrialized democracies.
A healthy economy can withstand significant hits without falling to pieces. Income and wealth inequality benefits those at the top as the rest of the population stagnates. In the long term, though, lack of balance can lead to catastrophe.
We are now seeing inequality rise to a level unseen since the 1920s and the Gilded Age of the Rockefellers, Carnegies and Vanderbilts.
During the Industrial Revolution, people flocked to cities for new work in factories. The owners got rich as their employees barely got by. In the 1920s, the prices for luxuries such as cars went down, people took out loans and the market rose high and fast. In 1929, the Stock Market crashed after the first World War. Over 15 million Americans were unemployed and half the banks failed. Around the world, consequences of inequality were felt most in capitalist nations, such as Germany, which suffered from high unemployment rates and hyperinflation to the point where money hardly had value.
Our tax system has brackets, a fairly advanced system compared to others worldwide. Those on the highest bracket pay a maximum of 40 percent income tax, however existing loopholes and tax cuts allow the biggest corporations and billionaires to get massive tax breaks.
Even some billionaires, such as Warren Buffett and Bill Gates, are concerned over their lack of taxation. Last May, Buffett and Bill and Melinda Gates created the Giving Pledge program. At the time 14 U.S. billionaires announced they have signed the pledge, formally joining 154 other billionaires worldwide who have promised to give away at least half of their vast wealth to philanthropic causes. A current list of signatories can be found at https://givingpledge.org/PledgerList.aspx.
Yet, on a reported income of $11 billion, Amazon is paying nothing in income tax this year and claiming a nearly $130 million tax rebate, according to a recent report by the Institute on Taxation and Economic Policy, a non-profit think tank that analyzes tax policy. The ITEP report cited more than 60 Fortune 500 companies that paid nothing in federal taxes this year.
Capitalism is founded on the idea of the pursuit of profit. Without limits, though, the system does not check and balance itself and the majority have no say in their fate. Even Adam Smith, father of capitalism, said, “No society can surely be flourishing and happy of which by the greater part of their numbers are poor and miserable.”
The top 20 percent of our population owns 89 percent of our country’s wealth, with 63 percent going to the top five and 35 percent to the top one percent.
Income and wealth inequality reveal troubling trends that resemble the 1920s — before the economic collapse. The question is not whether there is inequality, but what we chose to do or not do about it.