Published in the Delaware County Daily Times            

Saturday, August 24, 2019

By Joseph Batory, Time Columnist

It is all too common these days to criticize anyone who points out the tremendous economic inequality that pervades society here in the USA. Looking in this mirror is uncomfortable to say the least. That’s because in that in the richest country in the world, according to the latest census, nearly 40 million Americans live at or below the poverty line.  21% of our nation’s children (about 15 million) are in poverty which is the highest rate of child poverty among all developed nations. And a study by the US Housing and Urban Development department noted that 500,000 people experience homelessness each night (other statistical estimates as high as 750,000).

Meanwhile, the rich have gotten much richer. An analysis of Federal Reserve data has documented a $21 trillion increase in wealth for the top 1% of USA residents from 1989 to 2018. During that same time period, the overall wealth of the bottom 50 percent of our citizens dropped by $900 billion.

A study from the University of California-Berkeley pointed out that about 1% of the wealthiest Americans own about 20% of the nation’s wealth. The bottom 90% of our citizens own about the same amount (25%).

The Stanford Center on Poverty and inequality has reported that in 1965 CEOs of major corporations made 24 times more than the average worker. As recently as 2010, CEOs were collecting 185 times the average worker’s salary. 

In the context of all this wealth in the hands of a few, Washington’s “alleged” federal tax reform bill passed in 2017 makes no sense.  It created huge tax cuts for corporations as well as wealthy individuals. According to an analysis from the nonpartisan Tax Policy Center, by 2027, the richest 1% of all USA citizens will at that point have received roughly 83% of the tax cut benefits.  The “tax breaks for all” bill was political mythology.

To make matters worse, the Congressional Budget Office has predicted that the 2017 tax giveaway will add some $1.9 trillion to the federal deficit over the next decade. This is definitely going to be a major problem for future generations of Americans. Ironically, according to Washington’s Bipartisan Policy Center, while the wealthy of our nation are receiving these huge tax breaks, the much-maligned undocumented immigrants of America continue to pay billions in taxes each year, even though they do not have Social Security numbers.  These taxes are paid using what’s known as an Individual Taxpayer Identification Number (ITIN).

The IRS estimates that undocumented immigrants pay more than $9 billion via withheld payroll taxes each year. Undocumented immigrants are also paying into the Social Security system through payroll taxes, even though most of them will never receive benefits. According to a Social Security Administration report from just a few years ago, undocumented immigrants paid about $12 billion more into the system than they received.

In summary, it is hardly surprising nor is it a bad thing that American entrepreneurship (creative endeavors, inventions, diligence, determination and resilience) as well as inheritances have created great wealth in the USA.  After all, that is the essence of America’s free society.  But…the real issue is the drastic and widening inequality gap between the “haves” and the “have nots” in America.

America can do better. The starting point is for those in power to care… and then to do something to lessen the inequality divide. There are many possible steps that might be considered; below are just a few:

• Tax fairness needs to be implemented. A tax code overloaded with advantages for the wealthy has been and is continuing to increase the economic inequality across the USA.
• Education has been and continues to be the key to a more equitable society. Investing in universal Pre-K to give all children in the USA, especially the poor, an early start is essential. Universal Pre-K is already being used by many of our international competitors because these nations appear to understand better than the USA the economic as well as the societal benefits of such programs.
• Empower community colleges and willing businesses to train and/or retrain workers for jobs in the evolving technological world through government subsidies.
• Raise the minimum wage across America.

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Joseph Batory is the author of three books and more than 100 op-ed pieces on “politics, history and education” which have been published locally and nationally.