Views » March 15, 2011
Let’s Share the Sacrifice
It's time for the wealthiest Americans to do their part. And we should help them take that first step, by instituting a truly progressive income tax.
In state capitols across the country, Republican elected officials are launching major offensives against government employees and their right to organize. The unionbusters frame this campaign with the communitarian language of sharing–the implication being that everyone must pull together and do their fair share to get our local, state and federal governments through these times of limited public resources.
Wisconsin Gov. Scott Walker calls it “shared sacrifice.” Behind this sanctimonious crock about “sharing” lies the right’s hidden agenda: to cripple public-sector unions and in the process defund Democratic campaigns. (In the 2010 election cycle, unions contributed more than $92 million to federal candidates, parties and outside groups.)
That being said, the right’s idea that we must all share in the costs of getting our country back on track makes sense. In particular, those who have profited most during the past 30 years should do their fair share.
Consider these statistics derived from “The Top Incomes Database,” an online resource:
Since 1979, the poorest 80 percent of American families have seen their share of the national income shrink, while the wealthiest 1 percent saw theirs grow by more than 120 percent.
The richest 1 percent of American families (defined as those with incomes greater than $398,000) have an average household income (including capital gains) of $1,137,000.
That richest 1 percent of households controls 34.6 percent of Americans’ total net worth, while the bottom 80 percent controls 26.9 percent. Or to put that another way, on average, a family in the top 1 percent is more than 100 times richer than a family in the bottom 80 percent.
In the spirit of shared sacrifice, it’s time for the wealthiest Americans to do their part. And we should help them take that first step, by instituting a truly progressive income tax–one that would meaningfully redistribute wealth. For example, Congress could establish a 90 percent tax on all income in excess of $1 million a year. This would require a sacrifice on the part of less than .5 percent of America’s richest families–families like the Daumans of New York City, whose principle breadwinner Phillippe Dauman is CEO of the media company Viacom Inc. and who earned $33.7 million in 2009. Taxed at a 90 percent rate, that would bring his income down to about $3.6 million, a grand figure by anybody’s standards.
In addition to enabling the very rich to share in the sacrifice, the benefits to the public good would be enormous.
For starters, we could balance the budget. As Sen. Bernie Sanders (I-Vt.), who on March 7 proposed a 5.4 percent surtax on adjusted gross income above $1 million, has said, “At a time when the gap between the rich and everyone else is wider than it has been in decades, it would be wrong to balance the budget on the backs of people already suffering from the recession.”
This new revenue would enable us to maintain support for Head Start at $7.2 billion, rather than cutting it by $1 billion, as House Republicans propose. We could adequately fund the Low Income Home Energy Assistance Program that helps poor people pay their heating bills but which President Barack Obama wants to cut from $5.1 billion to $2.6 billion. It would allow us to fund student grants so that everyone could afford to attend college.
Yet taxing the rich is not on the national agenda. It’s time to put it there. A redistributive tax policy would be good for the country, and not just financially. Supreme Court Justice Louis D. Brandeis once said, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.”
The choice is ours.
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Joel Bleifuss, a former director of the Peace Studies Program at the University of Missouri-Columbia, is the editor & publisher of In These Times, where he has worked since October 1986.