The non-partisan Congressional Budget Office in Washington, DC recently released a report that gives evidence that not only are the rich are getting richer, but the gap between the very rich and the rest of us is expanding more now than any time in our history.
The upper 1% of the population saw its income increase by 275% between 1979 and 2007. The middle income earner saw an increase of 40% in that period, while the bottom 20% saw an increase of 18%. The wealthiest 1% of the population managed to take control of about 25% of all the income increases in the US during that period.
In previous decades the vast majority of those in the upper 1% were there primarily due to inheritance. In the 1920’s through 1940’s wealth because of inheritance accounted for over 65% of those in the upper 1%. Today that number is less than 2%. In today’s world many of folks who make up the very rich have made their fortune on their own. In fact, every 10 years the entire list of top 1% turn earners turns over by 35%.
In many countries of the world where there is a large gap between the very rich and the rest of the nation…trouble erupts. In order for the bottom 20% to have a realistic opportunity to achieve the American dream, the top 1% should pay a fair share of the nation’s tax burden. Job creation by the very wealthy, rather than wealth creation, seems to me to be the way out of this current financial crisis we are facing in the United States.
Many years ago, Ewing Kauffman told me that the best social program ever created was a good paying job with benefits. The very wealthy have the power and financial means to create more jobs…will they do it is the question?