For America’s Wealthy, a Sweet Start to Our 21st Century

How those years do fly by. We’ve now come nearly a quarter of the way through our 21st century.  Who’s “winning” this century so far? An easy question to answer: the richest among us.

Those rich are riding high. In the Hamptons, the prime Long Island summer getaway for Wall Street’s finest, realtors are now expecting an “especially lively” spring sales season. In February, Bloomberg reports, new listings in the Hamptons soared 51 percent over their level a year ago. The leap in listings running between $5 million and $10 million: up 136 percent. Listings over $20 million tripled.

The biggest steal in the lot? Maybe a 5,261-square-foot manse in Southampton that sits on 2.4 acres, boasts a pool and a tennis court, and sits adjacent to a nature preserve. A mere $7 million!

Here in the United States as a whole, show stats from the World Inequality Database, our top 1 percent’s wealth has so far this century jumped over 20 percent — and these wealthy are paying markedly less of their incomes in taxes than they did at our current century’s start.

Credit these happy tax times for America’s most financially favored to George W. Bush and Donald Trump. The first term of the second Bush to sit in the White House saw two major rich people-friendly tax cuts enacted — in 2001 and 2003 — and Donald Trump, in 2017, added another.

How much happiness have these cuts brought the wealthiest among us? Researchers at the Washington, D.C.-based Center for Budget and Policy Priorities, in a just-released statistical deep dive into our new century’s first quarter, tell that story quite well.

The Bush tax cuts didn’t fully phase in until 2010. In that year, an earlier CBPP report had noted, the Bush cuts raised the after-tax incomes of America’s richest 1 percent by 6.7 percent. In that same year, the Bush tax cuts inched up the after-tax incomes of the nation’s poorest 20 percent by just 1 percent.

The Trump tax cut in 2017 simply magnified that reward-the-rich trend. Top 1-percenters now stand to gain, on average, an estimated $61,090 in 2025 from the Trump tax giveaway. Our richest one-tenth of 1 percent, meanwhile, will be pocketing an average tax-time gain of $252,300, over 3,600 times the $70 gain that taxpayers in America’s poorest 20 percent will realize.

Cheerleaders for enacting the Bush and the Trump tax cuts regularly trotted out a well-worn rationale for rewarding our already rich: If we help people of more than ample means become even richer, they’ll have a greater financial wherewithal to “invest.” The more they invest, the more our economy will blossom — and everyone in that blossoming economy will benefit.

Things haven’t exactly worked out that way. Billionaires have certainly blossomed aplenty, and mega-millionaires have been benefiting royally as well. But the vast majority of Americans, studies have consistently shown, have not climbed much at all, if any, up the income ladder.

The new Center on Budget and Policy Priorities tax report walks us through all these studies. One from the congressional Joint Committee on Taxation and the Federal Reserve Board, for instance, found that American workers in the bottom 90 percent of their firm’s 2016 payroll would go on to realize “no change in earnings” from the 2017 Trump tax cuts.

The Bush and Trump tax cuts enacted over the past quarter-century, the CBPP analysts conclude, “gave windfall tax cuts to the wealthy,” in the process costing the federal government “substantial revenue” and “limiting the investments made to address national priorities.”

National priorities like affordable housing. The real estate data firm ATTOM last year looked at median — most typical — home prices in well over 500 U.S. counties. In 99 percent of those counties, those prices are running beyond the reach of the average American income earner.

Earlier this year, another report — from Harvard’s Joint Center for Housing Studies — revealed that the number of renter households spending over 30 percent of their income on rent and utilities had jumped to a record high, with nearly half of those households spending over half their income on housing.

In a real democracy, a crisis this dire would normally have lawmakers feverishly debating what exactly they ought to be doing to alleviate America’s housing pain. But we don’t have a real democracy these days in the United States. We have a plutocracy, a system that gives prime political priority to preventing any pain — for the rich — at tax time. Everything else can wait.

Haven’t we waited long enough?

Sam Pizzigati, an Institute for Policy Studies associate fellow, co-edits Inequality.org. His latest books include The Case for a Maximum Wage and The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970.