By Henry McRandall
In the last three weeks of the 2008 U.S. presidential election race, Republican candidates John McCain and Sarah Palin accused their Democratic rivals, Barack Obama and Joe Biden, of wanting to “spread the wealth around.”
The Republicans kept up the assault for the rest of the campaign and the corporate mass media made daily front-page and top-of-the-news items out of the charge.
The American people clearly knew what was supposed to be at stake – a massive redistribution of wealth from the “Haves” to the “Have-Nots” – and they voted en masse for the only prescription that could have saved the Amerikkkan economy from seeping further into the abyss of a prolonged economic depression.
But Obama and Biden chose to ignore the overwhelming mandate they had been given to effect just such a change and, as a consequence, the super-rich have continued to get much richer while the masses – the poor, the working class and the middle class – have continued to get poorer.
At the height of America’s post-World War Two boom, in 1974, the top one percent of Amerikkkan and Canadian households respectively each reaped about 8.33 percent of their countries’ national after-tax incomes.
Economic growth was high, unemployment and inflation were low and most North Americans were “doing alright.”
But in the 30 years since Ronald Reagan was elected U.S. president in 1980, the billionaires and mega-millionaires in both countries have done much, much better while the masses have clearly stagnated – if not regressed.
And it is this great and grotesque contradiction that gradually nurtured the global economic meltdown that began in 2008.
During the past 30 years, economic growth has been very sluggish in both the U.S. and Canada as wealthy corporations and would-be investors have instead chosen to enrich themselves through a variety of less-savoury financial devices: unceasing tax cuts for corporations and the wealthy, so-called “free trade,” “trickle-down” economics and unscrupulous financial speculation.
But if the super-rich did not grow much richer by creating new real wealth, how then did they accomplish it? They accomplished it, very simply, by stealing an ever-growing portion of national income from the poor, the working class and the middle class.
No longer do the rich in Canada and the U.S. just lay claim to 8.33 percent of gross national income but now to a whopping 20.32 percent. In effect, all that has happened is that 12 percent of the gross national income has been stolen or redistributed upward from the poor, the working class and the middle class to the super-rich with the covert connivance of both countries’ political classes.
And all it would take to right the economic ship of state in both countries would be for both countries’ various governments to give back to the poor, the working class and the middle class just a small portion of what has been stolen from them over the past 30 years.
Tax away an additional 7.4 percentage points of the 20.32 percent of national income the top one percent are now usurping and give it back to the bottom 80 percent of the population.
This would merely bring the top one percent’s share of national income back down to 12.92 percent, still much higher than it was when North America was booming in 1974. It seems perhaps the super-rich are motivated to work much harder to create real wealth when they are made to pay a fairer share of taxes.
Call it, perhaps, a “social justice tax.”
What would that do for the bottom 80 percent? If that 7.4 percent of after-tax income was redistributed equally amongst the four bottom quintiles (the bottom 20 percent, the next 20 percent, the next 20 percent and the next 20 percent), it would increase the income of the poorest 20 percent of the population by more than 40 percent, of the next 20 percent (the working class) by more than 20%, of the next 20% (the middle class) by more than 12 percent and of the next 20 percent (the upper middle class) by nine percent.
More people would be spending more money in their own communities, creating more jobs across the economy and increasing government tax revenues while decreasing government expenditures.
That is what the Amerikkkan and Canadian people should now be demanding of their federal, state and provincial politicians not some bullshit “austerity” budget that penalizes the needy while lavishing even more wealth upon the greedy.
It’s time to ‘spread the wealth around’
By Henry McRandall