How Can the World's Richest Country Let Children Go Hungry? 6 Tricks Corporate Elites Use to Hoard All the Wealth
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“Squeezed by rising living costs, a record number of Americans, nearly 1 in 2, have fallen into poverty or are scraping by on earnings that classify them as low income."
“Study: 1 in 5 American children lives in poverty."
“In 2010, 17.2 million households, 14.5 percent of households (approximately one in seven), were food insecure, the highest number ever recorded in the United
What’s going on here? Aren't we the richest country on earth?
Day in and day out we are told that if the government doesn’t tighten its belt, we’re all headed for debtor’s prison. Social Security, Medicare and Medicaid are under attack. State budgets are in disarray. Teachers and firemen are getting canned. Public services are slashed. This is the new America and we'd better get used to it, the pundits proclaim. You would think we were a poor country.
But we’re not. We’re filthy rich, but the money is hidden away by the 1 percent while poverty rises all around. Here’s why.
1. Productivity continues to rise but the 99 percent doesn’t share in the benefits.
The key to the material wealth of any nation is productivity – how much we produce per worker hour. Productivity is a crude measure of our overall level of knowledge, technique, organization, skill and cooperative work practices that produce the sum total of our goods and services. Lo and behold, there’s nothing at all wrong with productivity in America. It continues to rise and rise just like it did during our post-WWII boom years. What’s changed is that the average American wage has stalled since the mid-1970s -- which is precisely the time that we started to deregulate Wall Street and cut taxes on the rich.
During the 1950s and '60s boom years, almost all Americans shared in the fruits of productivity leading to rising real wages (after inflation). But now the productivity lines and wage lines have pulled apart. The gap between the two lines represents trillions of dollars that once went to the average American but are now going almost entirely to the super-rich.
2. Large corporations pay next to nothing in state and local taxes.
As a result of the Wall Street-created crash, state and local governments are struggling to make up for lost revenues and rising costs to care for the jobless and the destitute. In a fair society we would be asking Wall Street to pay for the damage it created. Instead, Wall Street has used its enormous lobbying muscle to make sure politicians are asking states to cut back public services of all kinds.
Meanwhile, large corporations use every trick in the book to avoid paying state and local taxes. A recent joint report by the Institute on Taxation and Economic Policy and Citizens for Tax Justice reveals that 265 large corporations avoided $42.7 billion in taxes from 2008 to 2010. That’s enough money to hire more than one million teachers! Instead, we are firing teachers in the name of fiscal austerity.
3. Money that should go toward the common good pours into the pockets of the 1 percent.
In 1970 the federal marginal tax rate on millionaires was 70 percent. That means for the next dollar the super-rich earned, 70 cents went to the federal government to pay for building what was then the most productive infrastructure in the world. Now the official top rate has fallen to 35 percent. But it’s much worse than that. Most of the super-rich take full advantage of the senseless 15 percent capital gains rate which pours hundreds of billions into the pockets of the super-rich. As a result, the real overall tax rate for the super-rich has plummeted to less than what the average secretary pays.