There is much talk in the US media about the expansion of the oligarchy in Russia and other authoritarian states. But there is no need to search the high seas. The oligarchy is an American phenomenon and it is expanding at an exponential rate, while income inequality is increasing. So says the most official of the official sources on economic matters: the Congressional Budget.
In a new study of trends in the distribution of household wealth from 1989 to 2019, the CBO found:
Wealth was less evenly distributed over the 30-year period. The share of total wealth held by families in the top 10 percent of the distribution increased from 63 percent in 1989 to 72 percent in 2019, and the share of total wealth held by families in the top 1 percent of the distribution increased from 27 percent to 72 percent in 2019. 34 percent over the same period… By contrast, the share of total wealth held by families in the bottom half of the distribution fell during that period, from 4 percent to 2 percent.
Pause and consider this last fact. Working-class Americans held a greater share of the nation’s wealth at the end of Ronald Reagan’s “trickle economy” presidency in the late 1980s than they do today. Now pause and consider this fact: Wealth inequality is substantially more severe for people of color. “In 2019, the median wealth of white families was 6.5 times that of black families, 5.5 times that of Hispanic families, and 2.7 times that of Asian and other families,” according to CBO.
Finally, pause and consider one more fact: The CBO report looks at the period just before the coronavirus pandemic hit. But we know that the pandemic has generated a bonanza for the billionaire class. In May of this year, Chuck Collins, a senior scholar at the Institute for Policy Studies who heads the IPS Program on Inequality and the Common Good, reported: “As the US crosses the grim milestone of 1 million deaths from covid-19, American billionaires have seen their combined wealth increase by more than $1.7 trillion, a gain of more than 58 percent during the pandemic.”
Collins, who monitors the rise in wealth of billionaires, has reminded us“The $5 trillion in wealth now owned by 745 billionaires is two-thirds more than the $3 trillion in wealth in the hands of the bottom 50 percent of American households estimated by the Federal Reserve Board.”
These are good times for US oligarchs, as the CBO report confirms. While studies may vary on the precise details of inequality in the United States, the bottom line is indisputable. “Both family wealth and family income are skewed toward the top of the income distribution,” the economic researchers explain. “Families in the top quintile of the income distribution receive a disproportionate share of total family income and own a disproportionate share of total family wealth.”
for senator bernie sandersthe Vermont independent who made inequality a central issue in his presidential bids, the CBO report strengthens the case for a Ultra Millionaire Tax that would impose a 2 percent annual tax on wealth over $50 million, along with a 3 percent tax on wealth over $1 billion. That could reduce the gap between rich and poor, says the senator, who during the pandemic proposed a Make Billionaires Pay Law to recapture some of the wealth accumulated by the richest Americans when everyone else was engaged in “shared sacrifice.”
“This report confirms what we already know: the very rich are getting much, much richer, while the middle class is falling further and further behind and forced to take on outrageous levels of debt.” Sanders argues.
The obscene level of income and wealth inequality in America is a deeply moral issue that we cannot continue to ignore or sweep under the rug. A society cannot be sustained when so few have so much while so many have so little. In the richest country on Earth, the time has come to create a government and economy that works for all of us, not just the 1 percent.