Bushwhacked_ Life in George W. Bush's America Large Print - Molly Ivins [20]
The decline in auditing rich people and corporations actually started fourteen years ago. In 2001 audits of the working poor increased by 48.6 percent. Those applying for the EITC have a 1 in 47 chance of getting audited, while those making more than $100,000 have a 1 in 208 chance of getting audited. In 1988 that number for those over $100,000 was 1 in 9, according to the Institute for Public Affairs.
Supreme Court Justice Louis Brandeis wrote, “We can have democracy in this country or we can have great concentrated wealth in the hands of a few. We cannot have both.” Progressive taxation and the estate tax were both results of the backlash against the Gilded Age. By calling the estate tax “the death tax,” as though it were a tax on passing on rather than a tax on estates of more than $2.5 million, the Bush administration succeeded in repealing it through a gradual phaseout and increasing the exemption to $7 million. The repeal of the estate tax is a lovely example of just how much political clout the very rich have in this country. Some rich people in Southern California hired a lobbyist, who in turn hired the well-wired Patton Boggs law firm. The group was backed by the Mars family and the Gallo wine folks. Another group of rich folks in Alabama joined the fray and the nexus of right-wing think tanks and interrelated lobbying groups took it up. Combine repeal of the estate tax with the flat tax, also popular on the Republican right, and we’re back to the McKinley era.
This is not an enchanting portrait of America. Since Bush became president, the stock markets have lost more than $6.5 trillion in value, unemployment is up more than 40 percent, and our projected surplus under Clinton has disappeared into a growing deficit. Bush is the only president in at least 140 years (and probably ever, reports Newsweek’s Allan Sloan) to suggest cutting taxes as we were heading into a war. The controversial heart of Bush’s second tax-cut plan is to eliminate taxes on stock dividends, which are unearned income, directly benefiting people in B’s bracket.
More depressing numbers: Paul Krugman reports that over the past thirty years the average annual salary of Americans has increased by 10 percent, adjusted for inflation. The income of the top 1 percent rose by 157 percent in the same period. Over the same period, the average annual pay package of the top 100 CEOs increased from thirty-nine times the pay of an average worker to more than one thousand times the pay of an average worker.
Now, all that is merely about income. The figures get worse when it comes to accumulated wealth, how much the people at the top pile up over the years and the generations. Kevin Phillips reports in his excellent book, Wealth and Democracy, the net worth, including home equity, of the middle quintile of Americans declined by 10 percent between 1983 and 1995, then rose again in 1998 and 1999, and slipped right back down in 2000–2001. The top 1 percent, over a million people, saw their net worth grow by 75 percent. According to the Federal Reserve Bulletin, between 1983 and 1997 only the top 5 percent saw an increase in their net worth, while wealth declined for everyone else. Eighty percent of the nation’s property—land, stocks, bonds—is now in the hands of 10 percent of the people: the 13,000 richest families have a net worth equivalent to the assets owned by the poorest 20 million people. This is a shocking change from the largely middle-class America of forty years ago.
An amazing fact of economic life in America: a rising tide for the rich does not, in fact, lift all boats. What we are seeing is trickle-up economic policies.