Frank Rich, citing Winner-Take-All Politics: How Washington Made the Rich Richer–and Turned Its Back on the Middle Class, concludes the growing divide between the superrich and the rest of us is the direct “result of specific policies, including tax policies, championed by Washington Democrats and Republicans alike as they conducted a bidding war for high-rolling donors in election after election.”
The top 1 percent of American earners took in 23.5 percent of the nation’s pretax income in 2007 — up from less than 9 percent in 1976. During the boom years of 2002 to 2007, that top 1 percent’s pretax income increased an extraordinary 10 percent every year. But the boom proved an exclusive affair: in that same period, the median income for non-elderly American households went down and the poverty rate rose.
Rich counters charges that increasing taxes on the superrich would reduce the ability of small business owners to create jobs. The Tax Policy Center found that only 2% of all small-business owners are in the top bracket. The yearly tax increase for those earning between $200,000 and $500,000? $700, not enough to hire anyone.
Robert Frank, author of Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich, analyzed the 400 richest Americans and found a “hardening of the plutocracy” and scant mobility. Only 16 of the 400 were newcomers.
How does corporate governance come into play? Most of the superrich aren’t entertainers, sports stars or entrepreneurs. Instead, they are “corporate executives and managers — increasingly (and less surprisingly) financial company executives and managers, including those who escaped with outrageous fortunes as their companies imploded during the housing bubble.”
When Obama campaigned, he promised to increase taxes on the rich. As Frank Rich concludes, there are many ways to create a more equitable tax code, “but surely few, if any, are easier than eliminating a tax break that was destined to expire anyway and that most Americans want to see expire.”
Rich argues that even more critical than the debt issue – borrowing from our grandchildren to give the superrich a tax cut – is the vanishing American Dream of mobility. (Who Will Stand Up to the Superrich?, NYTimes.com, 11/13/2010)