The top 1% holds as much wealth as the bottom 70% of all households
The increase in wealth among the already very rich led to the creation of 2.3 million new dollar millionaires over the past year, taking the total to 36 million. “The number of millionaires, which fell in 2008, recovered fast after the financial crisis, and is now nearly three times the 2000 figure,” Credit Suisse said.
These millionaires – who account for 0.7% of the world’s adult population – control 46% of total global wealth that now stands at $280tn.
At the other end of the spectrum, the world’s 3.5 billion poorest adults each have assets of less than $10,000 (£7,600). Collectively these people, who account for 70% of the world’s working age population, account for just 2.7% of global wealth.
Back in 2001, Four Corners did a program on the working poor called Going Backwards, where they quoted the statistic that 42 per cent of Australians living in poverty lived in families where one or both adults work.Then Employment Minister, Tony Abbott, summed up the Coalition view.“I’m prepared to accept that lots of people in work are doing it tough. But that’s true of lots of people at — on comparatively good incomes because they have heavier responsibilities.”Lord knows, keeping up with the lifestyle in the Northern and Eastern suburbs of Sydney can be expensive. Even people who score a job that requires no qualifications, no experience and no expertise, that pays in the top 1% of incomes and that allows you to charge your employer for pretty much everything, can struggle because of their “higher responsibilities”.
“Back in 1975, Australia households received a bigger share of the economic pie than households in the US, France and New Zealand. Only in the UK did the compensation of employees account for a larger share of GDP.”This trend in most economies was mainlybecause of structural changes that had reduced the bargaining power of employees, including globalisation, the increased flexibility of the labour market and technical innovation, which had flattened firms’ cost curves, But the larger decline in Australia may be partly because of the rise in the importance of the mining sector, which tends to generate relatively large profits while employing relatively few workers,” he said.
Hundreds of workers at one of Australia’s largest power plants will have their pay drastically slashed by up to 30 per cent.
One of the few positive outcomes from the car-crash of Brexit and Trump is that political leaders are finally realising that wealth inequality is not a democratically maintainable situation. Voters in most western democracies have started to resent the growing gap between their livelihoods and those of the richest few, and this resentment is causing…
A startling one in two working Australians are living from payday to payday.
American politics are dominated by those with money. As such, America’s tax debate is dominated by voices that insist the rich are unduly persecuted by high taxes and that low-income folks are living the high life. Indeed, a new survey by the Pew Research Center recently found that the most financially secure Americans believe “poor people today have it easy.”
The rich are certainly entitled to their own opinions—but, as the old saying goes, nobody is entitled to his or her own facts. With that in mind, here’s a set of tax facts that’s worth considering: Middle- and low-income Americans are facing far higher state and local tax rates than the wealthy. In all, a comprehensive analysis by the nonpartisan Institute on Taxation and Economic Policy finds that the poorest 20 percent of households pay on average more than twice the effective state and local tax rate (10.9 percent) as the richest 1 percent of taxpayers (5.4 percent).
ITEP researchers say the incongruity derives from state and local governments’ reliance on sales, excise and property taxes rather than on more progressively structured income taxes that increase rates on higher earnings. They argue that the tax disconnect is helping create the largest wealth gap between the rich and middle class in American history.
“In recent years, multiple studies have revealed the growing chasm between the wealthy and everyone else,” Matt Gardner, executive director of ITEP, said. “Upside-down state tax systems didn’t cause the growing income divide, but they certainly exacerbate the problem. State policymakers shouldn’t wring their hands or ignore the problem. They should thoroughly explore and enact tax reform policies that will make their tax systems fairer.
The 10 states with the largest gap between tax rates on the rich and poor are a politically and geographically diverse group—from traditional Republican bastions such as Texas and Arizona to Democratic strongholds such as Illinois and Washington.
The latter state, reports ITEP, is the most regressive of all. Four years after billionaire moguls such as Amazon’s Jeff Bezos and Microsoft’s Steve Ballmer funded a campaign to defeat an income tax ballot measure, Washington now makes low-income families pay seven times the effective tax rate that the rich pay. That’s right, those in the poorest 20 percent of Washington households pay on average 16.8 percent of their income in state and local taxes, while Washington’s 1-percenters pay just 2.4 percent of their income. Like many of the other regressive tax states, Washington imposes no personal income tax all.
“The problem with our state tax systems is that we are asking far more of those who can afford the least,” concludes ITEM’s state director Wiehe.
By contrast, the states identified as having the smallest gap in effective tax rates are California, Delaware, Minnesota, Oregon and Vermont—all Democratic strongholds and all relying more heavily on progressively structured income taxes. Montana is the only Republican-leaning state ITEP researchers identify among the states with the least regressive tax rates.
Of course, if you aren’t poor, you may be reading this and thinking that these trends have no real-world impact on your life. But think again: In September, Standard & Poor’s released a study showing that increasing economic inequality hurts economic growth and subsequently reduces public revenue. As important, the report found that the correlation between high inequality and low economic growth was highest in states that relied most heavily on regressive levies such as sales taxes.
In other words, regressive state and local tax policies don’t just harm the poor—they end up harming entire economies. So if altruism doesn’t prompt you to care about unfair tax rates and economic inequality, then it seems self-interest should.