By Luke Brinker
“We are the one percent” isn’t exactly a compelling response to the Occupy Wall Street’s movement “We are the 99 percent” mantra. So many conservatives have followed the lead of right-wing blogger Eric Erickson, proclaiming “We are the 53 percent,” referring to the portion of the public that pays federal income taxes. Forty seven percent of Americans don’t pay federal income taxes because they either don’t earn enough money to qualify, or their eligibility for tax breaks cancels out what they owe. (Of course, these workers pay federal payroll taxes, in addition to taxes imposed by states and localities.) Others argue that OWS vilifies the nation’s most productive people; after all, even though they only make up one percent of the income distribution in the U.S., the top one percent paid nearly 37 percent of all federal income taxes in 2009. Critics of OWS bandy numbers like 53 and 37 to assert that OWS stands for the lazy and the moochers, not the job creators. If only President Obama and left-wing demonstrators stopped being such meanies toward the maligned rich, they’d spur a new wave of hiring, innovation, and economic recovery.
You can adopt these Fox News talking points, or you can choose to look at evidence. (Evidence, of course, is highly suspect among a political faction that denies global warming and evolution, but I digress.) The New York Times (citing a CBO study) reports today on the arrival of a New Gilded Age. The top one percent took home 23.5 percent of the nation’s income in 2007, continuing a trend that started in the deregulatory years of Reaganomics. (At the outset of the Reagan administration, the top one percent’s income share was roughly 10 percent.) The only time in recent history with such a distortion in income concentration was in 1928, when the top one percent earned 23.94 percent of the national income. It’s no coincidence that these two data points – 1928 and 2007 – occur right before the emergence of severe economic meltdowns. When a tiny elite controls so much of the national wealth, that dilutes the purchasing power of lower and middle class consumers. (Beyond a certain point, the rich merely start hoarding their cash, not spending it in the economy.) You don’t need to be a bleeding heart to see why extreme income inequality is a bad thing. Not only is it morally troubling, but it’s also a recipe for economic disaster.
Of course, wealth is more than just annual income. When it comes to net worth (one’s assets minus liabilities)and financial wealth (stocks, bonds, and the like), the figures are no less tilted toward the wealthy. Take these charts from Professor G. William Domhoff at the University of California, Santa Cruz:
Those poor plutocrats. They control 43 percent of the nation’s financial wealth, 35 percent of its net worth, nearly a quarter of its annual income, and spend much less of their money on day-to-day necessities – and they’re faced with the cruel, unfair, un-American burden of paying 36.7 percent of federal taxes.