Shuck and Jive

Monday, November 03, 2008

Wealth Redistribution?

A First Presby published this letter in the JC Press on Sunday:
Obama’s wealth redistribution plan

John McCain has made an issue of Barack Obama’s wanting to “spread the wealth,” but he doesn’t mention that some serious wealth redistribution has been taking place for 40 years — redistribution up to the top income bracket.

In 1960 the average CEO took home 42 times the pay of the average worker. Today the ratio is more than 400. Between 1990 and 2005, corporate profits rose 106 percent, CEO compensation rose 300 percent, and workers’ pay only 4.3 percent. The wealthiest 1 percent own one-third of the national net worth. Talk about redistribution.

McCain also says that no one’s taxes should be raised, and conservatives point out that those with top incomes pay the most taxes. Well, of course they do, since they earn so much more. But in fact, the share of total federal tax paid by the top 1 percent has decreased by about a third, in comparison to their income share, since 1979.

The oddest part of our tax situation is that “the top 1 percent ” is a misleading category. It includes all incomes between $351,000 (what a hard-working surgeon might earn) and the stratospheric $1 billion-plus of hedge-fund managers.

Some are not paying their share — but be careful in judging who they are. The truth is that the “well off” (75th to 95th percentile) pay more than their share. The tax burden on those who earn between $60,000 and $200,000 has increased over the years. But the burden on the very top (average for top 1 percent in 2007 = $1.1 million) has been steadily reduced.

The very wealthiest have had the ear of Congress, and they have gotten laws and regulations allowing them to take an ever greater piece of the pie, creating wealth inequality that hasn’t been seen since 1929. It’s time they lost their lock on the rules of the game. If that means some new wealth redistribution, bring it on.
Thanks, Pat. Smart Presbys in Elizabethton.