Following on from the movie "Wall Street" and Gordon Gekko's 'Greed is Good' philosophy, this is an excerpt from an article by Bernie Sanders who is a member of the Senate Democratic Caucus and the longest-serving Independent in US Congressional history. He gives us an insight into America's rich and how they are working towards becoming even richer.
The American people are hurting. As a result of the greed, recklessness and illegal behaviour on Wall Street, millions of Americans have lost their jobs, homes, life savings and their ability to get a higher education. Today some 22 per cent of our children live in poverty and millions more have become dependent on food stamps for their food.
But not everybody is hurting. While the middle-class disappears and poverty increases, the wealthiest people in our country are not only doing extremely well, they are using their wealth and political power to protect and expand their very privileged status at the expense of everyone else. This upper-crust of extremely wealthy families are hell-bent on destroying the democratic vision of a strong middle-class which has made the United states the envy of the world. In its place they are determined to create an oligarchy in which a small number of families control the economic and political life of our country.
The 400 richest families in America who saw their wealth increase by some $400 billion during the Bush years, have now accumulated $1.27 trillion in wealth. Four hundred families! During the last fifteen years, while these enormously rich people became much richer, their effective tax rates were slashed almost in half. While the highest paid 400 Americans had an average income of $345 million in 2007, as a result of Bush tax policy, they now pay an effective tax rate of 16.6 per cent, the lowest on record.
Last year, the top twenty five hedge fund managers made a combined $25 billion but because of tax policy their lobbyists helped write, they pay a lower effective tax rate than many teachers, nurses and police officers. As a result of tax havens in the Cayman Islands, Bermuda and elsewhere, the wealth and large corporations are evading some $100 billion a year in US taxes. Warren Buffett, one of the richest people on earth has often commented that he pays a lower effective tax rate than his secretary.
But it's not just wealthy individuals who grotesquely manipulate the system for their benefit. It's the multinational corporations they own and control. In 2009, Exxon Mobil, the most profitable corporation in history made $19 billion in profits and not only paid no federal income tax - they actually received a $156 million refund from the government. In 2005, one out of every four large corporations in the United States paid no federal income taxes while earning $1.1 trillion in revenue.
But perhaps the most outrageous tax break given to multi-millionaires and billionaires happened this January when the estate tax, established in 1916, was repealed for one year as a result of President Bush's 2001 tax legislation. This tax applies only to the wealthiest three-tenths of 1 per cent of our population. This is what Teddy Roosevelt, a leading proponent of the estate tax, said in 1910: "The absence of effective state and especially, national restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need is to change the conditions which enable these men to accumulate power which is not for the general welfare that they should hold or exercise..... Therefore I believe in a ....... graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate." And that's what we've had for the last ninety-five years - until 2010.
Today, not content with huge tax breaks on their income; not content with massive corporate tax loopholes; not content with trade laws enabling them to outsource the jobs of millions of American workers to low-wage countries and not content with tax havens around the world, the ruling elite and their lobbyists are working feverishly to either eliminate the estate tax or substantialy lower it. If they are successful at wiping out the estate tax, as they came close to doing in 2006 with every Republican but two voting to do, it would increase the national debt by over $1 trillion during a ten year period. At a time when we already have a $13 trillion debt, enormous unmet needs and the highest level of wealth inequality in the industrialized world, it is simply obscene to provide more tax breaks to multi-millionaires and billionaires.
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