Monday, April 02, 2007


by Thomas Riggins

Amid all the news of killing and carnage (over 600,000 dead civilians in Iraq courtesy of President Bush and our tax dollars, corruption and criminality at home (the Justice Department and the Attorney General lying to Congress as well as the American people while playing politics with the justice system and the American people, Haliburton being given billions of dollars in no bid contracts, New Orleans being abandoned to speculators and schemes to defraud the minority peoples of their land and housing, health care being denied to millions of the poor, elderly, and working people), the list goes on. Amid all this, I repeat, it must be heartening for the Bush administration and its hangers on to see that at least one of its policy commitments is succeeding.

The IRS reports that income inequality between the rich and the super rich on the one hand, and the rest of us (90 per cent of the population) on the other, is on the increase. The top ten per cent haven’t had it so good since the the lead up to the Great Depression. This cheerful news comes from the article “Income Gap Is Widening, Data Shows” by David Cay Johnston (New York Times, Thursday, 3-29-2007).

The top one per cent (you have to make more that $348,000 a year to qualify) are receiving, the Times reports, “their largest share of national income since 1928” (1929 is not far behind). To be in the top ten percent you have to make at least $100,000 a year. That’s great news for the rich and the super rich. But what about the super-duper rich (the top 1/10 of 1% of the population-- i.e., about 5.6 million bucks a year) and the really super-super-duper rich ( the top 1/100 of 1% of the population-- that’s about $27.7 million a year-- this is Bush’s base we are talking about here)? Well, all you folks who voted for Bush will be happy to know they too are doing just fine. The income of the super-dupers and super-super-dupers “soared by a fifth in one year, largely because of the rising stock market and increased business profits.” Bettering the Dow beats being blown up in Baghdad.

But what about the rest of us? Are we going to be negative Nellies and begrudge the privileged few their good times? Maybe. Professor Emmanuel Saez, U of C, Berkeley (who analyzed the IRS data along with Professor Thomas Piketty, Paris School of Economics), said this to the Times: “If the economy is growing but only a few are enjoying the benefits, it goes to our sense of fairness, It can have important political consequences.”

By the way, the income gap may be much greater than the IRS figures that were analyzed. This is because the figures are preliminary, tax season isn’t over yet, and the rich file late and, oh yes, they don’t always file accurately.

It turns out that the IRS says it can get the taxes correctly from 99% of wage workers but only from about 70% of the rich. This means the income gap could again be much bigger that reported. But why only 70% from the non wage workers? This is because they are dealing with business and investments and the money mostly “flows to upper-income individuals, [and] not everybody accurately reports such figures.”

Could it be that the wealthy are cheating on their taxes, or do they get so much money they just can’t keep track of it all? It must be the latter because the super rich are rarely audited compared to those sneaky wage laborers whom the IRS keeps tight tabs upon.

The Bush administration says its tax cuts for the rich, even though they “benefitted those at the top more than others,“ were not responsible for the growing income gap. So what is the cause? Its the “rapid pace of technological change [that] has been a major driver in the decades-long widening of the income gap in the United States.” This really means its the ability of businesses to replace workers with machines, close down factories and services, dump the American workforce and move overseas to super-exploit third world peoples by paying substandard wages and no benefits, or only paltry ones.

Still, even here on the home front, many factors were left out of the IRS analysis, factors which, had they been included, would have made the income gap even greater. This is what Robert Greenstein (Center on Budget and Policy Priorities) thinks, according to the Times. Its not just the higher incomes and lower taxes of the rich, he said. You have to take into consideration the reduction and/or elimination of worker’s fringe benefits as well, such as education and health care subsidies, and child care too,

He said, “The nation faces some very tough choices in coming years. That such a large share of the income gains are going to the very top. at a minimum, raises serious questions about continuing to provide tax cuts averaging over $150,000 a year to people making more than a million dollars a year....”

The tax burden on middle income people has remained more or less constant for decades, according to Greenstein, while the rich have seen their tax responsibilities reduced by 50% [ and still “not everybody accurately reports” his or her income]. That means they coast along while the rest of us have to pay for, among other things, Bush's war with our taxes and the sacrifice of health, education, retirement benefits and environmental protection. Yes, indeed, “our sense of fairness” may lead to “important political consequences.”

Thomas Riggins is the book review editor of Political Affairs and can be reached at

1 comment:

Anonymous said...

Is not the purpose of war, the aggrandisement of the ruling class of the aggressor power?