Two things continue to amaze me about how the OWS movement is being portrayed in the media and by a majority of the members of Congress. I say majority of Congress because we saw the Jobs Bill get voted down in the Democrat majority Senate.
Secondly, even Progressive pundits continue to imply that the OWS participants “may not understand what they are protesting about”. Can we really be that deep into a state of denial? Really? Well here are facts the 99% of us can agree might be contributing to the frustration.
5 Facts about the Wealthiest 1 Percent
By Natalie Wolchover | LiveScience.com Protesters in the Occupy Wall Street movement, which began in New York City’s financial district and has since spread to hundreds of cities around the country, call themselves “the 99 percent”: They say they’re protesting on behalf of all but the wealthiest 1 percent of Americans.
The protesters object to corporate control of government policies, which they say has led to unfair tax loopholes, job outsourcing, cuts to public programs and gross overcompensation of executive employees, all of which have caused an ever-widening wealth disparity between the top 1 percent and the rest of the country.
So what is the disparity? How is wealth distributed in the United States?
FACT #1: The wealthiest 1 percent of households own 34.6 percent of all privately held wealth, and 42.7 percent of all financial wealth (total net worth minus the value of one’s home).
The rate of increase is even higher for the very richest of the rich: the top 400 income earners in the United States. According to another analysis by Johnston (2010a), the average income of the top 400 tripled during the Clinton Administration and doubled during the first seven years of the Bush Administration. So by 2007, the top 400 averaged $344.8 million per person, up 31% from an average of $263.3 million just one year earlier. Meanwhile, according to the NYU economist Edward Wolff a 2010 report, the bottom 80 percent of the population holds just 15 percent of the total wealth and only 7 percent of the total financial wealth (as a large portion of their wealth is tied up in their homes). The bottom 40 percent of Americans — that’s 120 million people — hold just 0.3 percent of the wealth.
The wealth inequality is not solely because of the inheritance of “old money” among the wealthiest Americans; there is also an extreme and growing inequality in the distribution of incomes. While the top 1 percent of earners earned 12.8 percent of the total national income in 1982, their share rose to 21.3 percent in 2006, a level not seen since the Depression era. Today, an American in the top 1 percent takes in an average of $1.3 million per year (that’s about 10,000,000 people in the US), while the average American earns just $33,000 per year.
FACT #2: The United States has more income and wealth inequality than most countries that have been studied, including India and China — countries that are traditionally viewed as having unequal distributions of wealth.
The degree of income inequality in each country is assigned a “Gini coefficient” — a number that ranges from zero (if everyone in the country has the same income) to 1 (if one person in the country has all the income). According to data gathered by the Central Intelligence Agency for 2010, the United States has a Gini coefficient of 0.45, on par with such countries as Iran (0.44) and Mexico (0.48); this is higher than the Gini coefficients of 94 of the 134 countries that have been studied, including China (0.42) and India (0.37), and much higher than Canada, Australia and all of Europe. Sweden has the lowest Gini coefficient at 0.23. The United States’ Gini coefficient has been rising for decades; it was just 0.35 in the 1960s. [World map of Gini coefficients]
FACT #3: Among the 299 companies listed in the S&P 500 Index, the average CEO’s compensation was $11.4 million in 2010, or 343 times more than the median pay ($33,190) of American workers. The ratio of CEO pay to median worker pay was just 42:1 in 1980, and is currently 25:1 in Europe.
According to the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), which tracks executive salaries on a website called Executive Paywatch, those 299 CEOs have a combined income of $3.4 billion per year, which could pay for 102,325 average American jobs.
Bill Domhoff, a sociologist at UC Santa Cruz, claims the ballooning of chief executives’ salaries in recent years has resulted from the fact that, for the most part, they set their own wages. “If you wonder how such a large gap could develop, the proximate, or most immediate, factor involves the way in which CEOs now are able to rig things so that the board of directors, which they help select — and which includes some fellow CEOs on whose boards they sit — gives them the pay they want,” Domhoff wrote in a 2011 article on his website. [Graph of worker vs. CEO salaries]
FACT #4: Between 1979 and 2005, the average after-tax income for the top 1 percent increased by 176 percent, compared with an increase of only 6 percent for the bottom 20 percent. Between 1990 and 2005, the purchasing power of the federal minimum wage actually declined by 9.3 percent when adjusted for inflation.
This rapid widening in the income gap between the rich and poor was identified in a 2007 report by the Center on Budget and Policy Priorities. The report attributed the trend to tax policies that favor the wealthy. According to Domhoff, other contributing factors include the diminishing political clout of labor unions and decreased expenditure on social services. [Graph of widening income gap]
FACT #5: Most Americans have no idea that the wealth distribution is as concentrated as it is, but regardless of their gender, age, income level or party affiliation, they believe wealth should be much more evenly distributed than they think it is.
In 2010, Michael Norton of Harvard Business School and behavioral economist Dan Ariely of Duke University surveyed 5,522 Americans about their views on the country’s wealth distribution. They found that most respondents (regardless of their genders, ages, income levels and party affiliations) guessed that the top 20 percent of Americans hold about 60 percent of the wealth (rather than the 85 percent that they actually hold). Survey respondents also guessed that the bottom 40 percent hold between 8 and 10 percent of the wealth in the U.S. (rather than the 0.3 percent that they actually hold).
Perhaps even more striking than their misconceptions were their beliefs about the ideal wealth distribution. Survey respondents said that the ideal distribution would be one in which the top 20 percent owned between 30 and 40 percent of the total wealth, and that the bottom 40 percent should hold between 25 percent and 30 percent of the wealth — about 1,000 times more than the bottom 40 percent actually do hold. [Graph of actual, estimated and idea wealth distributions]
Not only are the rich getting richer, they are not paying their fair share. Most millionaires’ tax burden is less, as percentage, than any other group. But the really egregious facts are related to both the banking and oil industries. These are the groups “extracting” the most of the lost wealth and here are the facts, just the facts:
1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. (Source: Exxon Mobil’s 2009 shareholder report filed with the SEC here.)
2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. (Source: Forbes.com here, ProPublica here and Treasury here.)
3) General Electric made $26 billion in profits in the United States over the past five years and, thanks to clever use of loopholes, paid no taxes.(Source: Citizens for Tax Justice here and The New York Times here. Note: despite rumors to the contrary, the Times has stood by its story.)
4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009. (Source: See 2009 Chevron annual report here. Note 15 on page FS-46 of this report shows a U.S. federal income tax liability of $128 million, but that it was able to defer $147 million for a U.S. federal income tax liability of negative $19 million.)
5) Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year. (Source: Paul Buchheit, professor, DePaul University, here and Citizens for Tax Justice here.)
6) Valero Energy, the 25th largest company in America with $68 billion in sales last year, received a $157 million tax refund check from the IRS and, over the past three years, received a $134 million tax break from the oil and gas manufacturing tax deduction. (Source: the company’s 2009 annual report, pg. 112, here.)
7) Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department. (Source: Bloomberg News here, ProPublica here, Treasury Department here.)
8) Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury. (Source: Paul Buchheit, professor, DePaul University, here, ProPublica here, Treasury Department here.)
9) ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2006 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction. (Sources: Profits can be found here. The deduction can be found on the company’s 2010 SEC 10-K report to shareholders on 2009 finances, pg. 127, here.)
10) Carnival Cruise Lines made more than $11 billion in profits over the past five years, but its federal income tax rate during those years was just 1.1 percent. (Source: The New York Times here.)
How can any sane person say they don’t understand why people are in the streets? Those who think these groups are just “hippies, druggies, mobs” and are smug in the fact they think they are NEAR the 1%, should realize that close doesn’t count in the wealth game. If YOU don’t wake up and don’t stop enabling the rape of America, YOU’RE NEXT!