Page 6
January 29, 2014
Q einiqm __________
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IH /W R k?A
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Why Beating Back Inequality Won’t Be Easy
The rich today
wield much
more power
S am P izzigati
H a lf a cen tu ry
ago,
P r e s id e n t
L yndon Jo h n so n
d eclared a “W ar on
P o v erty .” T h at w ar
w o u ld soon m ak e a
real difference. In
the decade follow ing its 1964 launch,
o u r o fficial poverty rate dropped
fro m 19 to 11.2 percent.
B ut that progress stalled in the
1970s, and a profound econom ic
insecurity now afflicts the vast m a­
jo r ity o f A m e ric a n s , p o o r an d
m iddle-class alike. O ur top 1 percent
households, m eanw hile, have m ore
th an d o u b led th eir sh are o f the
n a tio n ’s incom e. T hey take hom e 1
in 5 dollars earn ed in A m erica.
A gainst this backdrop. President
B arack O b am a has now declared
inequality “the defining issue o f our
tim e.” T op D em ocrats, new s reports
tell us, are m oving to m ake in eq u al­
ity the centerpiece o f the 2014 m id ­
term elections. Even som e G O P pols
are jo stlin g to show they care about
how unequal A m erica has becom e.
W ill all this new concern about
by
o u r econom ic divides translate into
an offensive against inequality as
credible as the original W ar on P o v ­
erty? T he odds say no. T he reason?
A m erica has changed. B ack in the
1960s, the rich had no ch o kehold on
o u r politics. T o d ay they do.
A m erica had rich people, o f
course, back in the 1960s. B ut w e
d id n ’t have all that m any o f them .
A nd those rich w e did have had far
less w ealth than th eir counterparts
today — and far less capacity to
create political m ayhem .
H ow m uch less cap acity ? L e t’s
look at ju s t the rich est o f o u r rich.
In 1961, IRS records indicate that
the n atio n ’s 4 0 0 m ost affluent tax ­
payers averaged ju s t over $2 m illion
in incom e. T hese taxpayers, after
exploiting every available tax lo o p ­
hole, paid 4 2.4 percent o f their total
incom es in federal tax.
In 2007, the last y ear before the
G reat R ecession hit, o ur top 400
averaged $345 m illion in incom e.
T hese contem porary rich, after loop­
holes, paid only 16.6 percent o f their
total incom es in federal tax.
T a k in g in fla tio n in to a c c o u n t,
o u r to p 4 0 0 in 2 0 0 7 g ra b b e d 25
tim e s m o re in c o m e than th e ir 4 0 0
co u n terp arts in 1961. A nd the 2007
ric h e st A m e ric a n s p o c k e te d 36
tim es m ore incom e afte r tax es than
th e ir 1961 p re d e c e sso rs. In actu al
do llars, o u r to p 4 0 0 in 2 0 0 7 — after
ta x es and in flatio n — to g e th e r had
$ 112 b illio n m o re slo sh in g aro u n d
in th e ir p o c k e ts th a n 1 9 6 1 ’s to p
400.
m o b iliz in g , to o . T h e se w e a lth y
p o w e r b ro k e rs p re se n t th e m se lv e s
as fa r m o re e n lig h te n e d an d “p u b ­
lic -s p irite d ” th a n th e ir h a rd rig h t-
w in g c o u n te rp a rts.
T h e se m e g a ric h d o n ’t d e n y o r
c e le b ra te in e q u a lity . T h e y ’re m a ­
n e u v e rin g in ste a d to lim it how the
n a tio n re s p o n d s to in e q u a lity —
to m ak e su re th a t an y re s p o n se
le a v e s th e ir w e a lth a n d p o w e r
e s s e n tia lly in ta c t.
T h e se b illio n a ire s , u n lik e th e ir
h a rd -rig h t b re th re n , c a n to le ra te
m o d e st in c re a s e s in th e m in im u m
w ag e. T h e y c a n ’t to le ra te an y s e ­
rio u s m o v e to ta x th e ir fin a n c ia l
tra n s a c tio n s , e s ta te s , an d e x c e ss
in c o m e , o r an y le g is la tio n th a t
w o u ld re s to re to w o rk in g A m e ri­
c an s th e b a sic rig h t to b a rg a in
o v e r th e a m p le w e alth th e U .S .
e c o n o m y c o n tin u e s to c re ate .
So w e hav e today tw o cam ps o f
the colossally w ealthy, both im ­
m ensely pow erful and sitting on
stashes o f cash that to w er ov er the
resources the rich o f the 1960s could
bring to bear on the political p ro ­
cess.
B ut m oney can ’ t buy everything.
T hey have the dollars. W e still have
the votes.
W h ere are to d a y ’s su p er rich
p utting all this loot? A g o o d bit o f it
is cascad in g into politics. In 2012,
T he W ashington Post reports, the
billionaire K och brothers and their
allies stuffed “at least $407 m illion”
in p olitically active nonprofits that
d id n ’t have to disclose th eir d o ­
nors.
A ll th o se m illio n s c a m e a b o v e
an d b ey o n d th e m illio n s th e K ochs
an d o th e r b illio n a ire s fu n n e le d d i­
re c tly to c a n d id a te s an d c a m p a ig n
c o m m itte e s , c o n trib u tio n s th a t
h a d to be d isc lo se d . J u s t o n e o f
th o se b illio n a ire s , a rc h -c o n s e rv a ­
tive gam ing in d u stry C E O S heldon
A d e lso n , o p e n ly s h o v e le d $ 9 1 .8
m illio n in to 2 0 1 2 e le c tio n “ su p e r
P A C s .”
B illio n a ire s lik e the K o c h s an d
A d e lso n u n d e rw rite th e m o st r a ­
b id ly rig h t-w in g o f A m e ric a ’s p o ­
litic a l p la y e rs, th o se c a n d id a te s
an d c a u se s d e v o te d to e n d in g any
a n d a ll o b s ta c le s to th e e v e r
g re a te r
c o n c e n tra tio n
of
A m e ric a ’s in c o m e an d w ealth .
B ut o th e r b illio n a ire s — the
OtherWords columnist Sam
W all S tree t c ro w d an d th e c o rp o ­ Pizzigati is an Institute for Policy
ra te e x e c u tiv e e lite — h a v e been Studies associate fellow.