Wednesday, April 07, 2010

400 Top Earners In U.S. Getting Taxed Less Than You

I'm a bit late to the game in commenting on this, but recent tax maneuvering and whatnot has led to the fact that the richest 400 Americans pay less in taxes (in terms of percentage) than you do.

This is a really important point in understanding how inequality in America is reproduced. In teaching my Intro students about economic class last week, I asked them what they thought lead to wealth. One student said it had to be hard work, because "no one just finds a big sack of money and becomes rich."

And while yes, very few people literally stumble onto a bag of money, most wealthy Americans stumble into a bag of money called inheritance. In fact, the single greatest predictor of whether or not you are wealthy is whether or not your parents were wealthy. Not how hard you worked, not how smart you are, but how much money your parents left you. And it's far easier for the wealthy to leave money to their children, because they barely have to pay taxes on their vast fortunes.

And how do they get such big money in the first place? Again, rarely through skill or hard work. They get it because tax law so heavily favors them. For example, 2 out of 3 major corporations paid no taxes last year. Which not only means that you and I have to shoulder the tax burden these companies are unfairly let out of, it also means the top executives of those companies have more money with which to reward themselves for screwing us all over. Money which they then leave to their kids.

Wash, rinse, repeat. And there you have inter-generational class inequality...

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