(Original Post)
By CHRIS COURSEY
THE PRESS DEMOCRAT
Published: Thursday, November 3, 2011 at 11:52 a.m.
Last Modified: Thursday, November 3, 2011 at 11:52 a.m.
The inequality of our economy is occupying our thoughts these days, and for good reason.
No matter what your feelings are about the folks protesting on Wall Street, Santa Rosa's First Street and main streets throughout the land, all of us should take note of two recent news stories about The Way Things Work in America.
Number one: The rich really do get richer, and the poor — by comparison — get poorer.
Number two: Corporations may be people when it comes to funding political campaigns, but a lot of corporations don't pay a dime in federal taxes, as most people do.
Bear with me here while I lay out some numbers. Hard data isn't nearly as fun as slogans and sound bites, I know, but it can be very revealing. And the data in these two recent reports reveals that all of us — or maybe close to all of us, maybe 99 percent — should be concerned about the direction our country is taking.
Last week, the non-partisan Congressional Budget Office reported that the top 1 percent of earners more than doubled their share of the nation's income over the past 30 years. More specifically, average inflation-adjusted after-tax income grew by 275 percent for the 1 percent of Americans with the highest incomes. Meanwhile, the bottom 20 percent of earners saw their income grow by just 18 percent from 1979 to 2007.
The 60 percent in the middle saw income growth of less than 40 percent, while the 19 percent just under the top muddled through with income growth of 65 percent.
This kind of economic disparity doesn't just happen naturally; it's the result of policy. The CBO report notes that federal revenue generation has shifted away from progressive income taxes and toward less-progressive payroll taxes, with the burden falling on the middle class and poor. Other policies, such as Social Security payments that are distributed regardless of income, exacerbate the disparities.
Keep these numbers in mind the next time you hear someone talking about the 1 percent and the 99 percent. It's not just hyperbole; there really is a difference.
On the corporate front, a report by Citizens for Tax Justice and the Institute for Taxation and Economic Policy reiterated what many of us already know: A lot of America's biggest companies pay no federal taxes at all, and many of them actually receive a net subsidy from the taxpayer.
The report examined the finances of 280 corporations and found that more than 10 percent either paid no taxes at all, or used loopholes to wind up with negative tax rates (essentially subsidies).
Corporations routinely complain about their tax rate of 35 percent in the federal tax code. But more than a quarter of the companies studied paid a rate of less than 10 percent. And some very big ones paid much less: General Electric, AT&T, Verizon and Wells Fargo all received taxpayer-funded subsidies, the report said.
Overall, the companies studied in the report earned almost $1.4 trillion, and received $223 billion in subsidies.
Class warfare? You bet. And guess who's losing?