When it comes to our economy, we have one massive problem that’s like a black hole sucking in all hope of rebuilding the middle class: Only the richest are getting richer.
From the year before Ronald Reagan was elected to the year before George W. Bush left the White House, the only income gains for most Americans came from working longer and harder. Meanwhile the richest 1 percent had more than doubled their average income, according to the Congressional Budget Office.
And the richest .01 percent quintupled their income from just over $4 million to $24.3 million a year. Double the furthermost right bar to get a sense of the tremendous gains being sucked in by just 1 out of 1000 Americans.
After the Great Recession it got even worse and we don’t yet know the impact of Obamacare kicking in as the first new taxes on the rich in a generation went into effect, except that we’re finally experiencing the best job growth of the century.
It’s not hard to see what happens if we don’t fix this, billionaire Nick Hanauer told Barry Ritholtz:
In 1980, the top 1 percent had about 8 percent of national income. Today it’s closing in 24 percent. The bottom 50 percent of Americans in 1980 shared about 18 percent of national income. Today it’s down to 11 percent, down a third… So here’s thing. All you have to do is put that data in an Excel spreadsheet and just run the extrapolation out 30 years. The numbers are scary, right? Because the top 1 percent will control in the mid 30s — 35, 36, 37 percent of national income — and the bottom 50 percent of Americans will share 5 or 6 percent of national income. At that point you don’t have a capitalist democracy anymore. You have some kind of feudal system.
So how does Jeb Bush, the son of a president who was a son of a Senator, propose to deal with budding feudalism?
He thinks poor people should work longer and rich people need another tax break.
According to an analysis by The New York Times, Mr. Bush’s tax plan would reduce the effective income tax rate on filers making $10 million or more per year to approximately 21 percent, down from 26 percent in 2013, the most recent year for which data are available.
This would “lower the tax burden on the wealthiest to near the levels that prevailed under his brother.”
And who’d benefit from this? The richest, who are increasingly people who were born rich — like, say, Jeb Bush.
“The Republican presidential candidate would make out like a bandit under his own plan,” The Washington Post‘s Catherine Rampell wrote. “According to my quick-and-dirty, back-of-the-envelope calculations based on Bush’s 2013 tax return, his liability for that year would have fallen by about $800,000, or about a quarter of what he paid Uncle Sam.”
When George W. Bush lowered taxes, he was blowing a hard-won surplus. Jeb is proposing to blow a $1.3 trillion hole in the budget when we still have a deficit of several hundred billion dollars that’s set to rise precipitously as more and more Baby Boomers retire.
And Jeb has argued that the one thing his brother did wrong was not cut spending to close the deficit.
“I think my brother didn’t control Republican Congress spending,” he told Stephen Colbert. “He should have brought the hammer down when they were spending too much. He didn’t veto things, didn’t bring fiscal restraints. He was not conservative enough.”
One of the “cuts” Jeb Bush is promising is to raise the retirement age for Medicare to 67 and Social Security to 70 because some people are living longer. Guess which people? The rich.
What do we get by ensuring that many laborers, janitors and health care workers will die before they reach retirement? About $230 billion in the first ten years. That still leaves a trillion dollar hole in the budget.
So we will fund cuts that primary benefit the richest, who have never been richer in the history of money, by cutting social spending that primarily benefits the poorest, who have been battered by conservative policies and globalization.
This should be unspeakable cruelty. But in this era of GOP, it’s lauded as populism.