Taxes

All But The Richest Americans Are Falling Behind

JM Ashby
Written by JM Ashby

According to new data released by the Federal Reserve last week, all but the top 10 percent of income earners in America are seeing their income stagnate or fall behind because inflation is still rising for all the things they spend the most money on like cars and education.

Now, it may be difficult for some to feel too much sympathy for the upper middle class people who still very comfortable lives even if their income is stagnating, but there's a specific part of this report that I want to focus on because it will be a significant issue in the 2020 election.

From Bloomberg:

Company ownership, equity shares in both public and private firms, has been sliding for the upper middle class too. The share of equity ownership for those in the 50th percentile to the 90th percentile of net worth has fallen. The top one percent of Americans owns the majority of shares. [...]

As of the end of 2018, net worth as a share of the U.S. total had shrunk considerably for the upper middle class. In one generation, U.S. wealth held by households from 50th to the 90th percentiles fell from 35.2 percent of the total to 29.1 percent. Most of this wealth has transferred to the top 1 percent of U.S. households.

This is a direct result of the GOP's tax cuts for corporations and the super-rich which they passed in December of 2017.

The GOP's tax cuts were partially funded by capping deductions for upper middle class property owners. That money was redistributed to company executives and wealthy shareholders who used the GOP's corporate tax cuts to funnel a trillion dollars in stock buy-backs and dividends into their own pockets.

The vast majority of Americans, including many of those who still live comfortable lives, saw their incomes go down so Republicans could deliver another windfall to people who were already among the richest people in the world before the tax cuts were even passed.

Democrats running on big spending proposals in 2020 must make it crystal clear that we can afford their proposals by taxing the right people; people who were already filthy rich before Donald Trump made them even more rich at the expense of virtually everyone else. The tax cuts they didn't need in the first place will have to be rolled back in some way to pay for progressive spending policies.

This may be clear as day to you and I, but it will require significant work to make the case for raising taxes in the next presidential election. Because you know what Trump and the GOP will say; they'll say Democrats want to tax average Americans in middle America.

  • muselet

    Income is rising for the top 10% but is stagnant or falling for everyone else. Company ownership is falling for everyone below the top 1%; ditto net worth.

    In other words, the R tax deforms are working exactly as intended.

    –alopecia

  • Draxiar

    It will be nice when Democrats have the super majority in both sides of Congress and have the White House.

    I know, don’t get happy.

    • I feel “slap happy”, does that count?

      • Draxiar

        But of course!