The 50-Year Takeaway From Middle-Class America

By Paul Buchheit, courtesy of commondreams.org

There’s a lot to be troubled about in America, but one long-term and often overlooked injustice may be the most damaging affront to our nation’s people.

After 70 years of relentless technological progress initially funded and continually supported by public tax dollars, American society should at the very least be compensated with healthcare and free or low-cost higher education. Instead, through decades of financial manipulations orchestrated by neoliberal economists and financial experts and political leaders, the tremendous wealth generated by our country’s productivity has been redirected to a special few who deem themselves innovators and self-made success stories.

To add to the insult, business-backed media has convinced many Americans that this is the beauty of capitalism, that any hard-working individual can be a billionaire, and that any concession to social responsibility is anti-American, bordering on communism. So, as a result, many of us accept our grotesquely unequal distribution of wealth as a natural result of progress.

The Labors and Taxes of Our Parents and Grandparents Created Our Nation’s Wealth

Beginning in the 1950s, funding for modern computer technology came almost entirely from taxpayer dollars through the Department of Defense and other branches of government. As explained by Mariana Mazzucato, “From the Internet that allows you to surf the web, to GPS that lets you use Google Maps, to touchscreen display and even the Siri voice-activated system—all of these things were funded by Uncle Sam.”

Adds Gar Alperovitz, “Between the mid-1980s and the mid-1990s the National Science Foundation spent $200 million to build and operate a network of regional supercomputing hubs called the NSFNET. Connected to the ARPANET, this network established Internet access for nearly all U.S. universities, making it a civilian network in all but name.”

In a similar vein, pharmaceutical companies wouldn’t exist without money from the taxpayers, who have provided support for decades through the National Institutes of Health, and who still pay for most of the basic research for new drugs and vaccines. Yet both the tech and pharmaceutical companies claim patents on the products paid for and developed by the American people.

Overall, in the US today, the federal government continues to be the largest source of funding of basic research.

A Relatively Few Privileged People Have Taken the Rewards of a Society-Wide Success

From mid-2019 to the end of 2020, US wealth grew by about $20 trillion. The richest 10% (who are, roughly speaking, America’s millionaires) took $15 trillion of that.

The average millionaire in America gained about $600,000 during that year and a half. The “poorest millionaires” gained about $200,000. The 25,000 very richest Americans (the .01%) each took an estimated $80 million during that time.

It gets worse. According to Americans for Tax Fairness and IRS data, over a recent five-year span the 25 wealthiest billionaires paid an effective federal income tax rate of just 3.4% when their wealth growth is counted as income. Meanwhile, the average federal income tax rate for all taxpayers was 13.3% in 2019.

And yet worse. Taxes may NEVER be paid on much of this enormous amount of misappropriated wealth. In a blatant example of a system exploited by the wealthy, the tax code includes a so-called stepped-up provision which allows the superrich to leave much of their multitrillion-dollar stock market fortunes to their children with all the accumulated gains magically erased, and thus, in many instances, without a single dollar in taxes coming due.

What Can Be Done?

Just a 2% tax on total financial wealth would generate enough revenue to provide nearly a $14,000 annual guaranteed income to every American household.

Could it happen? It’s been proposed by Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.). But overall there’s little political will to recover even a small percentage of wealth from the billionaires.

Less-than-wealthy Americans should be very, very angry about their stolen birthright. Instead of blaming government and each other, the struggling middle and lower classes should put the blame on those responsible for what Dean Baker calls the rigged economy.

We should be demanding the same benefits enjoyed by less wealthy but more progressive nations. We should be demanding that the labors and taxes of our parents and grandparents be compensated with free healthcare and education, and with guaranteed housing and mental healthcare for the most vulnerable among us. It’s not anti-American. It’s in support of human rights. It’s in support of fairness after 50 years of scheming and thievery.

 

 

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