Capitalism in every form and at all times necessarily supports a rich, parasitic minority that accumulates wealth at the expense of the vast majority. Recent data published in the New York Times, however, show that the divide between the richest Americans and everyone else has reached extremes unmatched even in the 1920s.
Since the postwar economic boom ended in the early 1970s, real income has stagnated or declined for most Americans while a tiny minority of ultra-rich have continued to prosper as never before. In 2002 the average income for the top 0.1% of Americans was $3 million which, even after adjusting for inflation, marks a 250% increase since 1980. Over the same period the share of the national income going to this ruling class also more than doubled, while the share going to the bottom 90% of taxpayers declined.
Other figures published by the Times comparing earning increases over time of the richest Americans with the bottom 90% show equally strikingly how those at the top are leaving the rest of us far behind. Between 1950 and 1970, for every additional dollar earned by the majority of us the richest 0.01% earned $162. Between 1990 and 2002, however, that top 0.01% earned an extra $18,000 for every additional dollar earned by the bottom 90%.
These statistics show that polarization of wealth in the U.S. accelerated greatly during the Clinton years, but Bush’s tax cuts for the rich are furthering the trend even more. According to the New York Times, 53% of his tax cuts through 2015 will go to the top 10% of taxpayers, and 15% will go to just the top 0.1% – only 145,000 people!
As you climb the income ladder, Bush’s tax cuts become sweeter and sweeter. By 2015 those making between $100,000 and $200,000 will actually pay 5 to 9 percentage points more of their income in federal taxes than those making over $1 million. The top 400 taxpayers (minimum income of $87 million) will pay about the same percentage of their income in federal taxes as people making between $50,000 and $75,000. Already the top 1% of taxpayers saw their share of taxes decline in the first two years of the cuts.
Conspicuously obscene even amidst the opulence described above is the income of the top 25 hedge fund managers, which averaged $251 million in 2004, double the figure from just three years ago. These managers profit by making the super-rich richer while damaging society as a whole. For instance, the highest-paid hedge fund manager last year, Edward Lampert, more than doubled his 2003 income to $1.02 billion by negotiating the merger of Kmart and Sears, which caused Kmart’s stock to soar while thousands of their workers were laid off.
The flourishing of this financial aristocracy has been based on their parasitical destruction of the standard of living of most workers. The current crisis of the U.S. economy has forced big business to brutally increase their exploitation of the working class in order to maintain and expand their level of profits.