There’s plenty of talk in the American media about the expansion of oligarchy in Russia and other authoritarian states. But there’s no need to look offshore. Oligarchy is an American phenomenon, and it’s expanding at an exponential rate, while income inequality is surging. That’s according to the most official of official sources when it comes to economic issues: the Congressional Budget.
In a new study of trends in the distribution of family wealth from 1989 to 2019, the CBO finds:
Wealth became less equally 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 34 percent over the same period.… By contrast, the share of total wealth held by families in the bottom half of the distribution declined over that period, from 4 percent to 2 percent.
Pause and consider that last fact. Working-class Americans held a greater share of the nation’s wealth at the end of Ronald Reagan’s “trickle-down economics” 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, White families’ median wealth 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 the CBO.
Finally, pause and consider one more fact: The CBO report studies the period right before the coronavirus pandemic hit. But we know that the pandemic has delivered a bonanza for the billionaire class. In May of this year, Chuck Collins, a senior scholar at the Institute for Policy Studies who directs the IPS Program on Inequality and the Common Good, reported: “As the U.S. crosses the grim milestone of 1 million deaths from Covid-19, U.S. billionaires have seen their combined wealth rise over $1.7 trillion, a gain of over 58 percent during the pandemic.”
Collins, who keeps tabs on spiking billionaire wealth, has reminded us, “The $5 trillion in wealth now held by 745 billionaires is two-thirds more than the $3 trillion in wealth held by the bottom 50 percent of U.S. households estimated by the Federal Reserve Board.”
These are good times for American oligarchs, as the CBO report confirms. While studies may vary with regards to the precise details of inequality in the United States, the bottom line is undebatable. “Both family wealth and family income are skewed toward the top of the income distribution,” explain the economic researchers. “The families in the highest quintile of the income distribution receive disproportionate shares of total family income and hold disproportionate shares of total family wealth.”
For Senator Bernie Sanders, the Vermont independent who made inequality a central focus of his presidential bids, the CBO report strengthens the argument for an Ultra-Millionaire Tax that would impose a 2 percent annual tax for wealth over $50 million, along with a 3 percent tax for wealth over $1 billion. That could narrow the gap between rich and poor, says the senator, who during the pandemic proposed a Make Billionaires Pay Act to claw back some of the wealth piled up by the wealthiest 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 being forced to take on outrageous levels of debt,” argues Sanders.
The obscene level of income and wealth inequality in America is a profoundly moral issue that we cannot continue to ignore or sweep under the rug. A society cannot sustain itself when so few have so much while so many have so little. In the richest country on Earth, the time is long overdue for us to create a government and an economy that works for all of us, not just the 1 percent.