This is a story about a nation separated by those who have and those who don’t, and though it doesn’t yet have a happy ending it could one day… but we’ll get to that later. First, you need to understand that if you are working forty hour weeks and don’t own three houses, you have not failed yourself or this country. It has failed you.
Over the past thirty odd years, a trend has emerged of corporate coddling and protection of wealth in the arms of the lucky and the few. There is absolutely no evidence to support that they have worked harder than you, just that they had the good fortune to be white and born into the elite opulence that came out of that category. To be clear, this is not an attack on their luck but an argument for the freedoms that the rest deserve. In a world where success is increasingly decided by educational attainment and human capital, the government has an obligation to promote a system where everyone can succeed.
Productivity and median income growth,
There is an understanding in this country that incomes will grow over time as productivity and technology grow. This assumption is not unreasonable and yet something drastic happened in 1980 to cause an income landscape that looks drastically different from what we would like to believe. Now, people continue to work more productively than they did forty years ago, and yet haven't seen even a 10% increase in median income since 1996.
Change in average annual household income, by income group,
Source: Congressional Budget Office (2013)
Not only has productivity been out of sync with income growth, but the top income earners have been out of sync with the rest of the work force. The top 1% has always earned more, but the past forty years have seen them diverge from the rest by huge amounts. Even during tough times like the recession, their growth was more than the growth of the bottom 95% of Americans combined.
Why do we actively vote to keep inequality and race relations—at least as they relate to wealth—status quo? In Larry Bartels' book on income inequality entitled "Unequal Democracy" he describes the ways in which Americans decide who they will be voting for in the coming election. To understand the illogical ways we vote, it is firstly important to note the state of the economy.
Macroeconomic performance under Democratic and Republican Presidents, 1948-2005
Source: Bartels, L. M. (2009)
Bartels' book shows how this is possible. When poor voters are making decisions about the economy, they are more influenced by the fortunes of the rich than of their own. In fact, the success of the rich is about twice as influential in their decision-making during elections than their own success.
Percentage of Dollars Given to Politics by Income Quintile, 1990
Source: Bartels, L. M. (2009)
So what does this say? Pessimistically, or realistically, these data paint a picture in which the upper class and white poor are similarly voting against redistributive policies and therefore the wellbeing of the poor. It represents a country where the needs of the upper class outweigh those of the others. In combination with race, though, this picture is much more troubling. In combination with race, this picture is one of a white upper class actively dampening the opportunities of a class of people that have been the target of unrelenting social and institutional discrimination.
When it comes to wealth and race, social mobility is a relatively important consideration. It is easy to just say that Blacks should save that 50 cents and claim their own equality, but things are never that straightforward. African Americans have been continually put at a disadvantage for opportunities to advance at the same rate as other citizens of this country. It is fairly obvious that Black citizens have had less time and opportunities to accumulate wealth, as their incomes have had a fairly short history (think slavery).
As for other opportunities for wealth accumulation, such as the tax code, institutional racism has played a huge role. For one, Blacks are much less likely to be homeowners and not for lack of income, but from disparate treatment from lenders. Originating from racist policies in the 1930s that marked entire Black neighborhoods as bad credit risks, discrimination persists even today. This alone makes valid at least a discussion of reparations. For another, since Blacks are much less likely to own homes, they do not receive the same benefits as homeowners when it comes to tax deductions tied to holding a mortgage and a house. Finally, Blacks tend to accrue most of their wealth through income rather than capital gains, and yet capital gains are generally taxed at about half the rate of income taxes. This creates a clear, though indirect, bias against African Americans.
This term is thrown around over many things that are stated in the Constitution but that do not necessarily apply between ordinary citizens. Any constitutional right you have is a protection from the government, not other people.
Sometimes the most dangerous words to use are ones we don't understand. The economy is a three step system of production, consumption, and distribution of goods in a certain area, not an excuse to be irresponsible about other social and political issues.
This term is used as a metaphor in laissez-faire economics for what is expected to happen if the rich are left to themselves. Unfortunately this model is unrealistic, and without regulation that affects the rich, the less fortunate will be left out to dry.
Though it applies to the correct group of people, the top 1% of income-earners, this phrase is often used pejoratively to accuse those who are rich of being rich. Pointing fingers at a single group of people for the woes of a country is not always the best way to go.
Often confused with uniformity, this word is used to describe an ideal world that is unattainable. In reality, the word just represents a system in which people have equal opportunities to reach equal goals. If you are opposed to Affirmative Action listen out for "equality of outcome."
Used as a synonym for communism, socialism operates as a way for people to put down government assistance. In reality, government assistance to the poor helps a lot of people while leaving the economy essentially untouched.
The technicalities of redistribution are complex and should be carefully considered, so using this policy as a cure-all won't be helping anyone. Neither using it in excess nor condemning it will make inequality go away.
These terms are often used to divide rather than bring similar-minded people together. It derives from a misunderstanding of political issues as belonging to only specific groups, rather than an issue that anyone could agree with.
Another name for the estate tax that puts a conspicuously negative slant on a tax policy that affects less than .2% of people in this country. Yes, it affects the heirs of the deceased; no, it probably won't affect you.
This rhetoric grid is not a guide; it’s not even a suggestion on what to say. The main drive here is to raise the red flag on words that can be misused or misunderstood, so that we can at least be more sensitive when they are used in politics and media.
A capital gain is profit in the shape of income created by a stock, bond, or real estate that is sold for more than the original value. And though it is a form of income, for some a large share of their income, it is generally taxed at half the rate of regular income. The rationale for such a low tax rate was to encourage investment, creating jobs and stimulating the economy. This trickle down ideology worked for a time (until the recession), but historically there is no evidence to suggest that lower capital gains are tied to economic growth. In fact, most economic and tax policy institutes assert that capital gains should be taxed at the same rate as federal income taxes.
There also is a huge bias towards wealthy people since they are more likely to invest. Yes, capital gains taxes are marginal and dependent on income, but only the richest few are likely to partake in this tax break. The Tax Policy Center found that the average household in the middle of the income spectrum received $20 from the 2003 capital gains and dividend tax cuts while the average household earning over $1 million received $32,000, or 1,600 times as much. Maybe, instead of continuing to cut part of an already inequitable tax code, we should consider changing the rate so it treats the poor as if they are just as important as the rich.
Source: Campbell, F.A.(2002)
1. There is a trend in this country towards a system of increasingly concentrated wealth at the top that has arisen out of historical and contemporary deregulation and inaction.
2. This wealth inequality has had a disproportionate affect on African Americans as the tax code is stacked against them even more than the average White.
3. There is language and rhetoric that confuse these ideas, but the more aware we are of their presence, the less effect they will have.
4. And there are solutions that would create a more equitable system, but we have to want them. We cannot stand behind the extremely wealthy and hope that their wealth will reach us one day.