Our nation has changed as the distribution of wealth has become rather skewed.
Inflation-adjusted incomes of the very rich have exploded as middle incomes have stagnated and the middle class’ share of the nation’s wealth has decreased. Between 1979 and 2006, the average after-tax income of the top 1 percent grew by by 256 percent while the income of the middle 20 percent grew by 21 percent, according to “Winner-Take-All Politics: How Washington Made the Rich Richer — And Turned Its Back on the Middle Class,” by Jacob Hacker and Paul Pierson.
Along with this uneven growth, “after-tax household income” for the top 1 percent “more than doubled” as a percentage of the U.S. incomes, while the lowest 80 percent declined by 2 to 3 percentage points between 1979 and 2007, according to the Congressional Budget Office.
Most people are troubled by these trends and by seeing education and health care on the chopping block while supporting increased taxes for the top 1 percent (who had average post-tax incomes of $1.2 million in 2006).
And citizens are bothered by by what authors Hacker and Pierson call, “winner-take-all politics.” Wealthy interests not only fund candidates, but lobby and organize to get policies making it easier for CEOs to avoid shareholder control and taxing large portions of executive compensation packages at rates lower than the average citizen’s. Lower taxes on multimillion-dollar estates are paid for by cuts to programs that serve the working poor and middle class.
But there has been something missing in the discussion — bigger than historical swings of the American political economy.
After all the incredible figures showing what a big shift in wealth has occurred, and after all the analyses of why and how this has occurred, the very most important thing of all has gotten short shrift.
And that’s what this means for everyday people.