Three More Reasons for Wealth-Deprived Americans to Take to the Streets

Yves here. Although the general argument of this post on widening wealth disparity will be old hat for established readers, the data on income under-reporting was new to me.

By Paul Buchheit, the author of (Routledge, 2017). His essays, videos and poems can be found at YouDeserveFacts.org. Originally published at

The rest of America has been left behind, but their voices are getting louder.

It’s starting to happen, as teachers around the country are fighting back against income and wealth inequality. At least 3 of every 4 Americans have been cheated out of a share of U.S. productivity since the 1980s. The approximately one of four Americans who have prospered, especially those in the top 5%, generally don’t seem to care much about inequality, and instead hang onto delusions about their own self-worth and the struggles of people who “don’t work hard enough.”

From various trusted sources come maddening facts about the relentlessly expanding wealth divide. Inequality is a perversion of human conduct, as most of society’s new benefits have derived from automation, and thus from decades of public input, taxpayer funding, and government research. But the beneficiaries are those who are well-connected to the corporate and financial processes exploiting that growth, mainly through stock ownership.

The rest of America has been left behind, but their voices are getting louder.

(1) In Just the Last 3 Years, the Richest 5% Gained an Average of $800,000 While the Poorest 50% LOST Wealth

This information comes from the 2017 , and is summarized . Incredibly, the richest 5% of Americans increased their average wealth from about $4 million to nearly $5 million since the end of 2014.

Meanwhile, the average household wealth of the poorest 50% actually went DOWN by about $200. The middle class  increased their wealth by anywhere from $6,000 to $26,000 during that financially productive time.

(2) The Wealth Owned by 90% of Us in the 1980s Has Been Redistributed to the Richest .1%

The charts below from the  reveal this terrible truth about the past 35 years:

—–The richest 125,000 households owned 7 percent of the wealth then, 22 percent now
—–The poorest 112,000,000 households owned 37 percent of the wealth then, 23 percent now

So nearly 15 percent of our nation’s total household wealth — $14 trillion! — has been transfered from middle-class America to people with an average net worth of $75 million.

 

(3) Businesses Cheat on Taxes Even More Than We Thought We Knew

It was recently  by Sam Pizzigati that only 1 percent of wage-based income goes unreported on federal tax filings, while the percentage for self-reporting entities ranges from 16 percent for partnerships to a stunning 63 percent for nonfarm proprietors. The overall  (difference between what’s owed and paid on time) is  to be close to a half-trillion dollars per year. That’s nearly half the entire .

Yet even though every IRS auditing hour spent on large corporations uncovers over  of  taxes, our government has  staff positions in the past eight years.

While regressive sales taxes and state taxes and property taxes continue to hack away at the dwindling wealth of America’s 90%, and while our schools beg for funding for teachers and infrastructure, the biggest beneficiaries of our country’s prosperity are spending their money on tax avoidance strategies.

But they’re beginning to hear the voices of people who won’t take it anymore.

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39 comments

  1. UserFriendly

    We need a let them eat cake moment.

    There has to be a widely publicized incident to start a massive protest that is understood by the general public (this is why occupy failed). that they knew would generate the press they wanted. It was just a coincidence that MLK was her preacher and became famous.

    It would need to be something sympathetic that could happen to anyone; like a single mom working 3 jobs dies from exhaustion. A string of college grads commiting suicide and leaving notes blaming it on student loans and no job prospects. Family on food stamps dies of hunger. Man commits suicide after applying for jobs and only being offered minimum wage. Just to spit ball some. Unfortunately if something did happen the lackeys in the press core would bury it.

    1. Amfortas the Hippie

      Yeah. I’m afraid that such things have already been happening…we just don’t hear about them. The lack of awareness of these human tragedies is not only due to the way the press operates, but also certain psycho-social tendencies that have been hammered into us: specifically, we’ve internalised the adage,” it’s all yer fault, little fish. you mustn’t blame the poisoned water you swim in”.
      Folks just don’t talk about their economic troubles….it’s considered shameful to not be rich. Even among families…everybody pretends to be doing well, and it takes special circumstances, and often sufficient social lubricant, to get folks to open up about being underwater on the mortgage, or otherwise failing(sic) in this dysfunctional economy.
      I reckon that this phenomenon is a major coup for the Bosses..effectively removing a large force for cohesion.
      Of course, it might not continue to work as well as it has before….at some point, presumably, the precariat swallows enough people and the reasons behind the dysfunction become so obvious and widespread that folks overcome the taboo. I’d argue that the current wave of teacher strikes is an example of this.

        1. Duke De Guise

          Wait, you mean Putin isn’t making the teachers in those Deplorable states go on strike?

          1. allan

            Actually, Betsy DeVos thinks the teachers are deplorable:

            … “I think about the kids,” DeVos said last week while touring a Dallas middle school. “I think we need to stay focused on what’s right for kids. And I hope that adults would keep adult disagreements and disputes in a separate place, and serve the students that are there to be served.” …

            Think of the children. Except when your bother’s mercs are taking out a family
            that’s in the wrong place at the wrong time.

          2. Arizona Slim

            I don’t know about that, but I do know some foreign language teachers. They’re really happy to hear that I’m adding Russian to my list of languages.

    2. perpetualWAR

      There were plenty of taxpaying homeowners who committed suicide when their homes taken by the banks due to unlawful foreclosure left them desperate.

      There was also Linda James, who was dying of late stage cancer, who’s entire household was ousted and left on the sidewalk by Fannie Mae while she was in the hospital.

      Yet, still the government and big banks continued their thievin’.

    3. jrs

      Suicide goes up and down with the unemployment rate. So yea unemployment directly leads to suicide as a matter of course, as a matter of social law you might say.

      Even in slightly better (let’s face it these are not good economic times, just somewhat better) economic times there are those who can’t find work who will off themselves because of it.

      And then there is the ever growing homeless problem …

      The single mom would be blamed for being a single mom, even though it is the hardest, most heroic job in the world. Because patriarchy. The college students are probably still better off than the majority of the population which doesn’t have college degrees, and yes of course in many cases work low wage jobs, so I don’t know how you’d get the sympathy of the 60% who were never able to go to college.

  2. Disturbed Voter

    Or recognize that obsessive-compulsive disorder is a universal plague, and that among the rich and powerful in particular, it is socially destructive. We got rid of the mental part of what used to be public health policy in the 70s. As a matter of public health, if people won’t seek help, then they need to be helped involuntarily. Stop the core behavior, and the symptoms will follow.

  3. The Rev Kev

    Well Solon the Reformer is no longer available so it looks like that this will have to be sorted the hard way. The fightback, when it actually begins, is going to be long and chaotic and if you think that the last election that coughed up a Trump is bad, you ain’t seen nothing yet. Either Americans will have to fight for what they have been denied or else they will have to accept living in what mounts to a neofeudal country. The wonder is that there has not been any talk of trying to restrict the vote to those who have property yet.
    In spite of what I have written I still have great hopes for the long term in the US. Why so? When the children of Sandy Hook were being buried, Westboro church announced that they would mount their protests at the funerals as because they would. That day, it was the Hells Angels that formed a human wall to protect the families there – the goddamn Hells Angles. I know that it sounds stupid but as far as I am concerned, if even the Hells Angels of a country knows what is right and just and are prepared to act on it, then there is hope.
    In case this does not all work out, I am reminded of something that Mark Blyth once said so I here provide a topographical map of the Hamptons for general reference-

    1. Grebo

      The wonder is that there has not been any talk of trying to restrict the vote to those who have property yet.

      Oh, they are working on it:
      There have been conferences.

      1. allan

        Thanks for the link.
        One of the author’s of that proposal, Nicholas Stephanopoulos,
        is also a co-inventor of the efficiency gap,
        which is a simple but way-too-crude measurement of gerrymandering
        that made it into the arguments in the gerrymandering arguments before SCOTUS this term.
        The efficiency gap is happiest (lowest) when districts are split 75%-25%,
        so that (in a strictly partisan election) the number of “wasted” votes is the same for both parties.
        It’s safe to say that this would strike most people as a bizarre notion of a well-designed district map.
        However, despite all of their , the high school algebra needed to see this outcome
        never occurred to Stephanopoulos and his coauthor.

        It looks like Quadratic Voting is more of the same.
        Social policy is too important to be left to law professors.

      1. Enquiring Mind

        Zoom in to see the clever placement of that Seabrook Nuclear seaside resort. They specialize in lobster and cod sashimi.

    2. cripes

      Hey Rev, that’s a map of New Hampshire’s (tiny) coast.
      Hampton is a town in Rockingham County, New Hampshire, but not the Hamptons.

      Here:

  4. Ford Prefect

    Interesting piece by Nick Haneuer in USA Today pointing out the trickle-down lie in the recent tax cuts.

    At some point in time, the voters will figure out they are not at the table, but on the table being sliced and diced for an ongoing feast. The two parties have been using religion, race, guns, and LGBTQ to divide the electorate so that they will not focus on the pickpockets suppressing their income. For the past 20 years, other than big tax cuts for the wealthy, it has been difficult to separate the Republican and Democratic fiscal and financial regulation policies.

    I viewed Trump being elected as a primal scream. That continues to be the case. I think it will take a stock market crash and recession for his voters to realize he is not on their side.

    1. Jim Thomson

      The two parties have been using religion, race, guns, and LGBTQ to divide the electorate so that they will not focus on the pickpockets suppressing their income.

      And there is the always reliable threat of foreign aggression and fear of terrorism, with which we are very familiar.

      1. Amfortas the Hippie

        and don’t forget “communism”.
        That was still a handy pile of mud for a lot of my righty acquaintances until relatively recently.
        Then came trump, and folks got quiet…it was embarrassing, you see.
        (where I live, at least)

    2. Heraclitus

      Ninety percent of the benefit of the tax cut goes to C corporations. If the US is a competitive place, and not a monopolistic place, then that ninety percent benefit should flow to the American people in terms of lower prices. So in other words, the tax cut is an experiment to show whether or not the American economy is a competitive one. It could end up being beneficial for the general public. If it isn’t a benefit to the public, then that means we’ve got deep problems with monopoly, which is a more serious problem than where we set the tax rate.

      Ninety percent of what one reads on the subject of the tax cut is uninformed. Even for wealthy people, the tax cut gives with one hand and takes away with the other. The complexity of it–and I consider that one of its bad points– is a gift to tax pros.

  5. Enquiring Mind

    The ominous current trend in business income reporting got a boost with the . Open season on every line item of a P&L and balance sheet was bound to lead to some situational ethics, to the extent that ethics could continue to play a role. That UK story about the so-called Big 4 accountancy firms is only the latest sad chapter in the reversion of the business community toward more feudal conditions. I am tempted to say that the rallying cry has been Don’t worry about damning the torpedoes, they were built by one of ours.

  6. Charles Yaker

    While I accept this where are, who is the “various trusted sources” ?

    “From various trusted sources come maddening facts about the relentlessly expanding wealth divide. Inequality is a perversion of human conduct, as most of society’s new benefits have derived from automation, and thus from decades of public input, taxpayer funding, and government research. But the beneficiaries are those who are well-connected to the corporate and financial processes exploiting that growth, mainly through stock ownership.”

  7. sharonsj

    Two items from the latest Keiser Report: (1) The percentage of people defaulting on their mobile home loans is up by 5%. (2) Americans are constantly being told they are not educated enough to find a decent job. Yet 70% of South Koreans have at least a college degree or secondary degree and SK has a high unemployment rate.

    As for the masses, I’m still waiting for the mobs and pitchforks.

  8. Expat

    It’s all part of the fundamental structure of American politics and culture. American folklore equates monetary success with intelligence and leadership so voters choose successful, i.e. rich, candidates. The costs of getting elected are also very high so there are barriers to entry. The result is that we are led by rich people.

    Unsurprisingly, these wealthy elected officials vote their own pocketbooks. This is not necessarily out of some evil desire to strip the poor and middle classes but out of their own (reinforced) belief that their success was merited, warranted, and born of free markets. The voters still believe they will join the ranks of the millionaires and so support these measures. Toss in a hefty dose of American anti-socialism and the recipe is complete.

    American voters don’t want to rise up against the uber wealthy because they believe these people are better, smarter and more deserving of their riches. They have no idea just how much these people have or how they really get and keep their money.

    Break down the American propaganda about Horatio Alger, equality, capitalism and opportunity first. But good luck with that. This is a nation which elected Donald Trump because he is rich without having the faintest clue as to how he got his money (hint: it’s marketing and tv).

    1. Rates

      I agree with this. At this point, I firmly believe that actively INCREASING inequality might actually produce better outcomes in the future. If there are any lessons at all, they have to be as brutal as possible in order to break through that shell of ignorance. History has shown that things go in a cycle. In order for the next cycle to be virtuous as soon as possible, then the current one has to be as brutal as possible. And please don’t give me the song and dance about having your cake and eating it too. That also sounds like Marie Antoinette.

      And it’s not just monetary success. It’s violence. The Amazon warehouse is where both come together. Americans are too willing to throw people under the bus for convenience and cheap prices. If that’s how they want to live then hei, it’s a free country.

      Muppets deserve their fate.

      1. Summer

        What could be a mass revolutionary action that people could do from home and not even be arrested or beat by police?

        Delete Facebook.

        Why them? Why not? Just showing capability of mass action is important.

        1. Arizona Slim

          I’d do that, but I’d have to break my Facebook fast in order to log in and delete myself.

        2. Rates

          They can’t even do that:

          There’s a reason the term Muppets was invented i.e. it’s true.

          Can they do mass action? Sure, but it’s usually to demand to have cake and eat it too, so things actually get worse.

          The funny thing is that Lloyd Blankfein, etc might be doing God’s work after all i.e. dealing with muppets and teaching them the value of consequences.

        3. Elizabeth Burton

          I take it you aren’t aware that the teacher strikes everyone is admiring were mostly set up using Facebook. As has been the case for most of the real protest actions taken in the last several years.

          A mass deletion of Facebook accounts would do nothing except play into the hands of those who find that particular piece of information disturbing, and who would like nothing better than for people to, as my Mom used to say, “cut off their nose to spite their own face.”

          If you want a mass action that’s actually useful, consider taking part in one of the upcoming anti-war protests scheduled for this weekend. Oh, you didn’t know about those? Quelle surprise.

          1. cripes

            Elizabeth:

            Went there.
            Clicked here for details: SpringAction2018.org

            Browser helpfully informs me the site can’t be found. Only , which I don’t have, remains.

            Hmm.

          2. False Solace

            If your labor movement is dependent on a platform you don’t have a labor movement.

            1. Rates

              Honestly we have no lives either. After all we depend on the ultimate platform i.e. the government. And empirical results confirm that observation. No lives matter except if you are a part of the 0.01%.

          3. Rates

            Why not fund a website where protests can be organized? Based on your argument, none of the protests prior to Facebook’s existence couldn’t have been successful because well these was no Facebook.

            Ah right, because once again, the muppets want to have it both ways. If it’s easier using Facebook to organize then presumably the authorities just need to connect to Facebook to get a list of the organizers and arrest them once this country has become totalitarian.

            #MuppetsDeserveTheirFall

          4. jrs

            Good but are these actions about anything concrete? Something topical like leave Syria alone? That hardly even seems to be mentioned. I mean the protest is all for the good, but wars are escalating right now as we speak …

    2. Amfortas the Hippie

      long ago, i spent a year doing warranty work for a golf cart company(some metalurgical error that caused 400# of batteries to fall out). Old men in garish pastels, drinking high dollar scotch at 9am.
      golf balls poured on our heads.
      Being the sweaty kind of help on a golf course for a while should cure anyone of any illusion that the well off are “better”.

    3. Elizabeth Burton

      The ludicrous myth that all those rich people deserve to keep as much of their money as possible because they “earned it” will only disappear when enough people are compelled to see reality—their reality, which is that they are falling further and further down the scale through no fault of their own.

      However, I refuse to blame the victims. As is noted, the idea that anyone who works hard will succeed and joint the plutocratic ranks is so deeply ingrained in the national psyche it’s hard to break through. Not to mention that those who are at least moderately comfortable are encouraged to identify with the 1%, because who doesn’t want to think they’re on the same playing field as the Mercers and the Kochs and the Trumps, eh? “A man is known by the company he keeps”, indeed, is another byword of US culture.

      And let us know forget that “personal responsibility” has been weaponized for a very long time, so it’s no wonder so many people are willing to believe any financial problems are their own fault, the result of “bad choices.”

      We are what we have been trained to be, starting with an education system that taught we older types it was anathema to question authority, and that the people who were running stuff obviously were there because of their superior qualifications. Notice how when that started to break down we were suddenly hit upside the head with the “terrible fact” that students in the US were lagging way behind their peers in other countries so “education reform” needed to be applied.

      For those unfamiliar with the results of that, I refer you to Monday’s article on the subject: The Corporate Plan to Groom U.S. Kids for Servitude by Wiping Out Public Schools.

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