Egalitarian-minded economists are pushing for a ‘GDP 2.0’ — and getting some lawmaker help.
The United States ended the 20th century on a roll — for the rich. Between 1973 and 2000, the nation’s most prosperous 1 percent tripled their incomes, after taking inflation into account.
The even more prosperous top tenth of that 1 percent did quite a bit better. Their incomes more than quintupled between 1973 and 2000, rising an amazing 414.6 percent.
And what about Americans of less exalted means, those stuck in the nation’s bottom 90 percent? Between 1973 and 2000, their incomes rose all of . . . 2.6 percent.
Something, in other words, went horribly wrong over the last quarter of the 20th century. And what has happened so far in century 21? Our decision makers in Washington have done their best to make things even worse.
How much worse? We now have a new report from the Washington, D.C.-based Institute on Taxation and Economic and Policy that offers a distressing new answer.
The Institute’s researchers looked at all the major tax bills that members of Congress have passed — and Presidents have signed into law — since the start of our 21st century, every piece of legislation right up through the GOP tax cut signed into law this past December.
The researchers then calculated what households have paid in taxes under the new tax laws, for each year since 2000, and what they would have paid if Congress this century had made no changes to the nation’s tax code.
Taxpayers would have paid, the researchers found, $5.1 trillion more in taxes had America’s tax laws not changed. Who benefited from these trillions in tax savings?
Lawmakers have been assuring us, all along the way, that we would all benefit.
“This is about helping hard-working taxpayers across the board,” promised Rep. Erik Paulsen of Minnesota last November as Republicans on the House Ways and means Committee began pushing the most recent of this century’s tax cuts into law.
But some Americans have benefited quite a bit more than others — and many others have barely seen any benefit at all.
All told, only 3 percent of this century’s tax cut savings have gone to America’s poorest 20 percent. Taxpayers at the other end of America’s income spectrum, those fortunate souls in the top 20 percent, have grabbed 65 percent of those savings, nearly two-thirds of the total.
Within that top 20 percent, well over half the benefits have gone to the top 5 percent, and over half those top 5 percent benefits have gone to the top 1 percent.
Steve Wamhoff, one of the Institute on Taxation and Economic and Policy researchers, has another interesting frame on the numbers.
“If you look at the richest 1 percent,” he notes, “they’re getting more than the bottom 60 percent of Americans.”
The exact numbers: The top 1 percent have grabbed 22 percent of the total savings from this century’s major tax bills. The bottom 60 percent have taken in just 19 percent of the total.
This century’s tax cuts have clearly not been about “helping hard-working taxpayers across the board.” They’ve been about tossing crumbs to people working two and three jobs to make ends meet and rewarding the already rich — with new yachts. Literally.
This past November, on the same day the full U.S. House of Representatives gave a green light to the latest GOP tax cut, the Florida mega-millionaire who chairs the House subcommittee in charge of writing new tax policies — Rep. Vern Buchanan — spent somewhere over $3.25 million buying a new yacht.
Buchanan, the eighth-richest lawmaker in Congress, had good reason to celebrate. The tax cut signed into law this past December will save him as much as $2.1 million a year in taxes.
Sam Pizzigati co-edits Inequality.org. His latest book, The Case for a Maximum Wage, has just been published. Among his other books on maldistributed income and wealth: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970. Follow him at @Too_Much_Online.