Is “Class Warfare” Inevitable?
The Democratic position on taxes has been to increase the progressive nature of taxation so that the wealthy pay more or, at a minimum, to create a surcharge on the extremely wealthy. This has been shouted down for years by scaring folks about the dangers of “class warfare” along with tacit - albeit unfounded support - of a “trickle down” benefit from those with high levels of wealth.
There are many logistical challenges, not to mention powerful forces, to increasing tax revenue from the extremely wealthy. One is that taxes are heavily based on income like that experienced by those who get paid a salary or hour ly wage. This is not the primary way that the extremely wealthy acquire their wealth.
A recent study (World Inequality Report 2022) by the Paris based World Inequity Lab reinforces the notion, nonetheless, that something should and can be done.
Consider that from 1995 to 2021, persons in the top 1% worldwide captured 38% of the global increase in wealth while the bottom 50% captured just 2%.
During this time, the share of the world’s wealth of the top .01% rose from 7% to 11%. This means that out of 7.75 billion people alive in 2020, less than 1 million (775,000) hold 11% of the world’s wealth.
How about in the
USA specifically? In 2020, the top 1% received almost 19% of the nation’s income. The bottom 50% received 13.3%. In 1980, the shares of income were reversed – the top 1% received 10.5% and the bottom 50% received 19.1%.
In terms of wealth in the USA, the trend is the same. In 2020, the top 1% held 35% of the nation’s wealth while the bottom 50% has 1.5% and the middle 40% held 27.8%. In 1980, the top 1% held 23% and the bottom 50% had 2.2% while the middle 40% of the population was placed at 33.6% of the nation’s wealth.
If these numbers come across as a blur - the bottom line is that the rich are getting richer at the expense of everyone else.
How did this happen? Could it be the steady decline in the top tax rate of 70% in 1980 to a rate that has been below 40% since 1987? (The top rate dropped to 50% in 1982 through 1986.) Could it be the bashing and weakening of unions, low minimum wage increases plus reduced regulation? It certainly looks like those could be factors. The fact is these were policy choices that started in the 1980’s and have been in place since.
But these are policies that can be changed!
We need to start by having political representation that works for the interests of everyday people. However, this cannot be achieved by rhetoric. Politicians that seek to fix it are needed.
The consequences of inequity extend beyond measurements of wealth and income. One metric that the report highlights is the effect on climate associated with inequity. Using carbon dioxide
(CO2) emissions as a measure, each person in the world averages around 6.6 tons of CO2 per year. The average for the top 1% is 110 tons per year totaling 17% of all emissions per year.
This country (as well as other countries) has seen everyday people rise up against inequity during our country’s history. We need to leverage our democracy where the interests of everyday people can be heard and responded to. It starts with believing this can be done within our democracy. Are we believers or will class warfare truly happen?
Laurence Doxsey, Retired, Former Director of Office of Sustainability for City of San Antonio, former Environmental Officer for US Department of Housing and Urban Development, former Sustainability Officer for City of Austin, resides outside Medina.