Back in 1980, the bottom 50 percent of wage-earners in the United States earned about 21% of all income in the country — nearly twice as much as the share of income (11%) earned by the top 1 percent of Americans. But today, those numbers have nearly reversed: The bottom 50 percent take in only 13 percent of the income pie, while the top 1 percent grab over 20 percent of the country’s income.
This trend is even more remarkable when you set it against comparable numbers for wealthy nations in Western Europe - where the bottom 50% earn nearly 22% of the income in those economies, while the top 1% take in just over 12% of the money.
Since the 1970s the price of higher education has skyrocketed, putting the price of tuition out of reach for many low-income students. Over the same time, the tax code became more generous to the wealthiest Americans — the top marginal income-tax rate fell from 70% in 1980 to 39.6% in 2017, taxes on capital gains fell by more than half from the mid-1970s to the mid-2000s, and the estate tax has fallen as well.
Those changes have made it easier for high-income Americans to grab more and more of the income pie in any given year.
From 1980 to 2014, for instance, the bottom 20% of earners in the United States saw their after-tax income rise by just 4%, according to the World Inequality Report. By contrast, the top 10% saw their post-tax income more than double over the same period.
Democrats are putting forward solutions aimed at restoring wealth equality. These are not far-left measures to disrupt American capitalism - as some contend. They are simply designed to return the American economy to the balance between the very rich and all other Americans that existed as recently as the mid-1980's - when the last wave of baby boomers were entering the workforce. Then, high-school kids got summer jobs at fast-food restaurants; their middle-income parents could afford tuition, room, and board at public universities; and the job market was flush with good-paying, entry-level jobs.
Today, there is just far less opportunity for most Americans. That loss of opportunity has come with a series of changes in the rules governing the American economy: a decline in the marginal tax rate that stifled private investment; outsourcing of manufacturing to other countries; financial industry innovations that eliminated many safeguards. These changes benefited the few at the expense of the majority - ushering in cultural changes that continue to threaten the very fabric of our democracy.
The solutions are not revolutionary - they are a return to the rules of the game that allowed most Americans to prosper.
Copyright © 2022 Upper Katy Democrats - All Rights Reserved.