The long-term effect of shutting down schools, going to a 4-day school week, and cramming 40 students in a classroom is too unpleasant to imagine. But easy to ignore if you can afford enough acreage to block the view.
Everyone's feeling the pain, they say. Really? Consider these facts:
(1) In 1980 the richest 1% of America took one of every fifteen income dollars. Now they take THREE of every fifteen income dollars. They've TRIPLED their cut of America's income pie. That's a TRILLION extra dollars a year. That's 1/7 of the whole pie, in addition to what they had before.
(2) One man (hedge fund manager David Tepper) made $4 billion last year, enough money to pay the salaries of every public school teacher in New York City. Based on income figures, he is 50,000 times more valuable than the police officer or firefighter who comes rushing to your house in an emergency.
(3) If the bottom 90% of America had shared in our country's prosperity at a level consistent with 1980 incomes, the average family would be making $45,000 a year instead of $35,000.
These are well-documented facts, taken from the Internal Revenue Service, the Census Bureau, and the Congressional Budget Office.
Our children will be paying the price of a free-market philosophy that doesn't have the sense to regulate greed. Plenty of studies show the adverse effects of inequality on the stability and health of a society. And our children don't have to wait to feel the effects. Many of them come to school on Monday mornings anxious for their first full meal in three days.
And it's not just the schools. Essential police and firefighting forces are being reduced. Low-income people traveling to their jobs on off-hours take the brunt of transit cutbacks. We're seeing cutbacks in after-school programs in low-income areas and reductions in library hours and park services. Plus, of course, increases in state income taxes, sales taxes, property taxes, gas taxes, cigarette taxes, utility costs, license fees, parking meter rates.
The usual response is that the wealthy deserve what they earn. But while they tripled their cut of the pie, they didn't work three times harder than everyone else. They benefited from financial deregulation and tax cuts, opportunities way beyond the lives of the families with kids in public school.
Supporters also say the rich will re-invest in industry, providing benefits for all. They said this in 1980. The current level of inequality is equivalent to that of the Great Depression.
Or they say the "wealth tax" and the "death tax" is unfairly targeting the rich. The new tax proving for health care is a relative slap on the wrist. The estate tax affects about 5,000 previously untaxed estates, owned by the richest 1/100 of 1% of American families.
Or they say the rich are suffering, too. But a 2010 Merrill Lynch-Capgemini world wealth report states that the rich (millionaires and above) in North America increased their wealth 18 percent to $10.7 trillion.
We're letting this happen to our society because people don't know the truth. Many of those arguing against government regulation are poor themselves. In many ways, big government IS a problem. And capitalism may be the best economic system. But we've failed to find a compromise. Extreme inequality shows that.
Several states have implemented more progressive tax systems. Oregon recently passed Measures 66 and 67, which impose modest income tax increases on the wealthiest residents and raise the corporate minimum tax for the first time in 80 years. A 2008 study by Princeton University determined that "the 'half-millionaire tax,' at least in New Jersey, appears to be an effective and efficient revenue-generation mechanism, having little impact on migration patterns among half-millionaire households." Similarly, little adverse effect of higher taxes was found in Maryland or Oregon. And a study by the California Budget Project revealed that the number of high-income households actually grew during periods of higher income tax rates for top earners.
Progressive taxes worked from the 1950s through the 1970s. And a fair approach now would mean that 90% of us should not be taxed. We just need to get back our piece of the pie.