Editorial by Phyllis Roseberry
Chair, Wyoming Rising
The Gilded Age in the late 1800s was a time of high concentration of wealth and great social, economic, and political unrest because most people were living in poverty. Corruption was rampant as the rich spent significant amounts of money to ensure that the government did not tax or regulate their labor practices or pollution-causing activities. It was a time of moral collapse of government and business.
Are we there again, now? In the last forty years, the rich have definitely gotten richer, especially since the 1980s — the era of “trickle down economics.” President Reagan and congress cut the highest earners personal income tax from 70% to 28%. The theory was, if the rich get richer, the economy will grow and unemployment will decline. However, an extensive study by Oxford University in 2002 shows the results of tax cuts for the rich “push up income inequality, but do not boost economic performance. It therefore provides strong evidence against the influential political-economic idea that tax cuts for the rich “trickle down” to benefit the wider economy.” Employment did rise in the 1980s but most of this rise has been attributed to increased government spending on the military and highways.
From 1980 to now, wages rose 17.5% while the top .5% incomes rose 127%. The Bush and Trump tax cut bills reduced taxes for the wealthy even more. The Bush bill resulted in the top 1% earners receiving 38% of the tax cuts. Under the Trump bill, the corporate tax rate went from 40% to 21%. 60% of the personal income tax cut went to the top 20% income earners. In some years, many are paying no tax at all (like Jeff Bezos, Elon Musk, Michael Bloomberg).
So, here we are today with this very unstable, unfair, and dangerous inequality in our income and tax system. This situation does not bode well for our democracy or the quality of life for 90% of our citizens. It’s truly a re-creation of the gilded age when 10% of the population owned 75% of the wealth. Today the top 10% own 69.8% of the wealth. The bottom 50% own 2% of the wealth. They must spend about 75% of their income on basic needs like housing, utilities, food, health care, transportation to a job, and day or elder care. In a country where “all are created equal,” this huge discrepancy in wealth makes the rich a lot more equal than everyone else. The rich have significantly more resources to spend on lobbyists, political ads, and campaign contributions. As of the Citizens United vs FEC case in 2010, much of those contributions are “dark” (which means the donor is anonymous). In 2020, $1 billion in dark money was spent on campaigns according to the New York Times. Try to find out who funds “Honor Wyoming.” Politicians can’t help but be influenced by this money as they depend on it for their elections. What do the rich get in return? They get more tax cuts, less regulation for public benefits like clean air and water and safe workplaces and less control on risky banking practices and monopoly formation (reducing competition and raising prices on everything).
The reduced taxes on the wealthy result in less money available for services and benefits for everyone. These include health care, education, housing, childcare, food, public transportation, roads, bridges, water, sewer, high speed internet. and the environment we all live in. Congress says spending on these items “costs too much.” On the contrary, not investing in these universal needs is costly to everyone’s standard of living and economic opportunity. It also has significantly increased our national debt.
So, how do we address this modern gilded age? How do we reestablish opportunity and hope for everyone? We need to invest in our country and people. The period of strongest economic growth and rising wages/benefits for all was the 1950s. Taxes of the highest salaries was 91% compared to 37% today. The first $13.6 million of an estate is exempt from federal estate tax. Raising such taxes on the wealthiest would result in several benefits. Those with capital would find it more attractive to invest in businesses rather than put their money in tax free options. Our national treasury would be much more solvent with money available to invest in our people. As Warren Buffet said, it’s not fair that his tax rate is lower than his secretary’s.
Vote for the candidates who will serve ALL the people, not just their rich (and often anonymous) donors.
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