Government deficits are the result of 30 years of shifting wealth from working people to the super-rich and big business. Since 1977, the share of national income taken home by the richest 1% of Americans doubled from 9% to over 20% today. The richest 0.1% – just 150,000 households – tripled their share of income, now earning as much as the poorest 120 million Americans combined. Thirty years ago, the average CEO made 30 times what the average worker did; today, top executives make 263 times more than the average worker’s wage, (http://www.ips-dc.org/reports/executive_excess_2010).
Reality: The rich don’t pay their share.
In the 1950s the highest income earners paid a tax rate of 91%, while today it is just 36%. But even this dramatically misrepresents the situation. The richest Americans earn far more from capital gains and dividends than salaries. So the effective tax rate of the richest 400 Americans was just 17% in 2007, down from about 30% in 1995, (Business Week, 4/7/2011). As Warren Buffett likes to point out, he pays a lower effective tax rate than the people who clean his office!
Reality: Cutting military spending could alleviate the crisis.
Nobel Laureate Joseph Stiglitz estimates that American taxpayers have now spent $3 trillion in Iraq and Afghanistan, roughly twice the 2011 federal deficit of $1.5 trillion. On average, the wars cost us $16 billion a month, $22 million an hour, (The Washington Post, 9/5/2010). To put this spending into perspective, let’s measure it up against the 2011 budget cuts:
- 45 minutes of war = the federal cuts to Planned Parenthood
- 5 hours of war = budget cuts to federal housing programs
- 2 days of war = budget cuts to the Department of Labor's jobs creation programs
- 3 days of war = budget cuts to federal Pell grants
- 5 days of war = budget cuts to the Department of Transportation and the EPA
- 2 months of war = the total cuts to the federal budget