The Richest 1% Has Tripled Its Share of the US Income Over the Past 30 Years
The richest 1% has tripled its share of the income pie over the past 30 years, mainly through tax cuts and financial deregulation. If their income had increased only at the pace of American productivity (80%), they would be taking about a trillion dollar less out of our economy.
That extra income could provide a $40,000 per year job to every unemployed person and college graduate in the United States and have enough left over to pay off the deficits of all 50 states.
So the winners are pulling away. Meanwhile, average Americans make the same money, adjusted for inflation, that they made 30 years ago. If the median household income had increased at the pace of American productivity (80%), families would be making $92,000, not $50,000.
How about the superstars at the top? One man (John Paulson) made enough money last year to hire a quarter of a million entry-level health care workers, all by himself.
It helped that most of his earnings were subject to a 15% tax rate.
So for those of us just learning to play the free-market capitalism game, here's the question: How much should one man be able to make? $10 billion? $100 billion? $1 trillion? $8 trillion? Wait a minute -- that's ALL of America's income. That wouldn't work, because then some of you wouldn't get your share. You'll have to figure out a means of redistribution. But that's socialism. OK, John Paulson, go for the $8 trillion.
After all, that's the purpose of free-market capitalism, to allow any individual to take all he can get, even if his financial maneuverings contribute nothing to a productive society.
It's all part of the game, our new national pastime.