How Much Do The Really Rich Really Deserve?

You want stats on how unequal our globe has become? We have plenty of them for you. But we offer something more as well. We offer some real hope for a more equal future.
That hope has emerged on multiple fronts. We have a battle for the White House that has shoved inequality ‰ÛÓ and what to do about it ‰ÛÓ front and center politically. And now we also have a stirring new declaration from nine top leaders of our global civil society.
These nine leaders hail from groups that range from Amnesty International and Oxfam to Greenpeace and the International Trade Union Confederation. They’ve all agreed to work together “to tackle the root causes of inequality” and confront “disparities of wealth and power.”
“We need change on a scale never seen before,” the civil society leaders boldly and simply state. “We choose to imagine a better world.”
Meanwhile, here are more indicators of inequality by the numbers:
‰Û¢‰ÛâU.S. corporations are now paying $5,000 and up on annual health physicals for their CEOs, a new analysis of executive perks reveals. Meanwhile, over the first 10 weeks of the 2016 federal fiscal year, 227 corporate employees have died in on-the-job incidents, none of them CEOs.
‰Û¢‰ÛâJPMorgan Chase CEO Jamie Dimon had a sweet 2015. His compensation package jumped by 35 percent, to $27 million. Dimon’s most significant contribution in 2015? He cut 6,761 JPMorgan jobs.
‰Û¢‰ÛâWe may have more than a CEO pay problem in the United States: At Apple last year, five execs who rank below chief executive Tim Cook each pulled in $25 million.
‰Û¢‰ÛâThe 16,000 Americans who make up the nation’s wealthiest 0.01 percent hold about as much wealth as the 256 million Americans with net worths each under $277,000.
‰Û¢‰ÛâIn 1983, the typical U.S. family had a net worth of $95,879, an inflation-adjusted figure comparable to the $98,057 wealth of the typical U.S. family in 2013. Over those same years, by contrast, upper-income households ‰ÛÓ those with at least twice the wealth of typical households ‰ÛÓ saw their median worth soar from $323,402 to $650,074, notes a new Pew study.
‰Û¢‰ÛâA Harvard Business School analysis of $2.4 trillion in Standard & Poors 500 company profits found 54 percent of that income went to stock buybacks that help boost executive pay, 37 percent to dividends that enrich shareholders, and 9 percent to R&D and training and raises for workers.
‰Û¢‰ÛâDefenders of our deeply unequal global economic order had to put in a bit of overtime last month. They had to explain away the å_latest evidence, from the global charity Oxfam, on how concentrated our world’s wealth has become. A challenging task.
Back in 2010, Oxfam’s new stats show, the world’s 62 richest billionaires collectively held $1.1 trillion in wealth, far less than the $2.6 trillion that then belonged to humanity’s least affluent half.
Now the numbers have reversed. The world’s top 62 billionaires last year held $1.76 trillion in wealth, the world’s bottom half only $1.75 trillion.
“Far from trickling down,” Oxfam concludes, “income and wealth are instead being sucked upwards at an alarming rate.”
Flacks for grand fortunes have a justification for this top-heavy state of affairs. We live, they assure us, in a meritocracy. Those with great wealth have made great contributions. They merit their “success.” If we want to encourage talent and hard work, we simply have to accept the inequality that meritocracy will inevitably produce.
But do those huge fortunes really reflect merit? Oxfam economist Didier Jacobs last year set out to examine that question, and he has just published a paper that offers a fresh new take on meritocracy and the rhetoric and reality behind it. His conclusion is “no.”
“People who defend grand fortunes typically don’t defend all grand fortunes,” Too Much Editor Sam Pizzigati said to Jacobs. “They’ll readily acknowledge that some rich people haven’t done anything that makes their riches merited. But then they’ll argue that most of our wealthy owe their wealth to personal talent and effort. What do modern philosophers have to say about this ‘meritocracy’ defense of inequality?”
Jacobs replied that “many philosophers see talent as genetically or socially inherited. Even effort, philosopher John Rawls contends, stands largely ‰ÛÒ if not completely out of an individual’s control. Gifted people raised in supportive environments with access to great opportunities will find working hard to nurture their talents much easier than folks who lack a supportive environment.
“Proponents of meritocracy don’t consider inherited wealth to be merited. So why should the wealth that comes from inherited talent be merited?” he asks.
Meanwhile, the rise of wealth has hit the presidential campaigns, for the first time in decades.
The Democratic primary contest between former Secretary of State Hillary Clinton and Sen. Bernie Sanders, Ind.-Vt. ‰ÛÓ the self-described “Democratic socialist” and Congress’ leading analyst of the gap between the rich and the rest of us - may be focusing more public attention on alternatives for taxing the rich than any race for the White House since 1912.
Clinton is advancing a tax plan that would impose a 4 percentage-point “fair share surcharge” on incomes above $5 million. The 400 richest of these taxpayers, the IRS recently revealed, paid only 23 percent of their average $250-million incomes in federal income tax in 2013. Under the Clinton plan, that overall tax rate would jump to 27 percent.
Clinton’s tax plan also shuts two prime loopholes the rich exploit at tax time, including the one that 2012 GOP nominee Mitt Romney used to shield over $100 million in retirement accounts from taxes.
The Sanders tax-the-rich thrust would add several new high-tax brackets to the federal income tax. Under the Sanders plan, the nation’s richest 0.01 percent - about 13,000 taxpayers in all ‰ÛÓ would pay Uncle Sam 52 percent of their income over $10 million.
Income between $2 million and $10 million, meanwhile, would face a new 48 percent rate, with a new 43 percent rate on income between $500,000 and $2 million. The current top federal marginal tax rate: 39.6 percent.
Sanders would also raise the estate tax on the nation’s largest fortunes, eliminate the preferential treatment of income from capital gains and dividends, and prevent households making over $250,000 from saving more than 28 cents in taxes from every dollar in tax deductions.
White House hopefuls haven’t talked this much about our rich since 1912.
And plans are underway for a March on Washington against wealth.
Over 1,500 Americans from all walks of life have so far pledged to join “a sit-in to save democracy from the billionaire class.” They’ll be gathering this spring at the U.S. Capitol, after a march that will begin April 2 at Philadelphia’s Liberty Bell, “where the dream of American democracy took flight.”
The 2016 election, the call for this civil disobedience action notes, will “be the most billionaire-dominated, secret money-drenched, voter suppression-marred contest in modern American history.” A growing coalition of over 50 organizations has so far endorsed the action. For more information, check Democracy Spring online.
More new thinking: A pair of the world’s most perceptive analysts of wealth concentration ‰ÛÓ the French economist Thomas Piketty and the UK’s Anthony Atkinson‰ÛÓ last month updated their take on the most promising approaches for creating a more equal world.
Both stress that must “change the pre-tax distribution of income,” as Atkinson noted in an interview with Ethical Technology, and not rely solely on taxing the rich at higher levels. But higher taxes on the rich, both also stress, can help build a more equal “pre-distribution.”