Vassals, Merchants and Royalty

       Medieval England                      Modern Miami

According to a report released on January 16th by Oxfam, reported in Improve the News, “the richest 1% acquired nearly two-thirds of all new wealth worth $42T created over the past two years… During the pandemic and cost-of-living crisis ongoing since 2020, the fortune of the world’s wealthiest individuals reportedly soared by $26T, while the net worth of the remaining 99% of the world’s population rose by $16T… Oxfam – which analyzed data from Credit Suisse’s global wealth report and Forbes’ Billionaires and Real-Time Billionaires List – found that stock market surges, tax policies tilted in favor of billionaires, and rising prices helped swell the fortunes of the richest 1%.” Makes you grow all warm and fuzzy inside, doesn’t it.

Looking just at the US, the top 1% of Americans added a whopping $6.5 trillion to their collective net worth last year, effectively more than the aggregate bottom 90%. Getting fuzzier, right? “According to an analysis by the Fight Inequality Alliance, Institute for Policy Studies, Oxfam, and the Patriotic Millionaires, a wealth tax of up to 5% on the world’s wealthiest could raise $1.7T a year. Oxfam's report found that the money could lift 2B people out of poverty, deliver universal healthcare, and fund a global plan to end hunger.” Improve the News. That ain’t happening!

I’m thinking about the time where there were vassals working the land, a few minor nobles and a merchant class and a wealth concentration in regional lords and kings where most of the wealth resided. That was the medieval era. It’s not entirely different today with our one-percenters, our upper middle class with professionals and business owners/senior managers and the current Bezos, Buffet, Gates, Musk, etc. mega-rich. Today’s “royalty” are billionaires and the politicians they have purchased.

Yet unlike all other developed nations, the United States alone does not even provide universal healthcare to its citizens. Even though Republican President Richard Nixon first proposed this for the US, efforts to create this productivity-enhancing benefit to all Americans has been stone-walled by rich lobbyists supporting Republicans in Congress and state legislatures. They have even whittled away at the Affordable Care Act (once called “Obamacare”) since it was passed in 2010.

You can get a full, first-rate education – including advanced professional degrees – in Germany, Europe’s most successful economic powerhouse, virtually tuition-free. In the United States, you can get a full, first-rate education if you are willing accept massive student loans that often follow you into advanced middle age.

The GOP still clings to its most basic economic tenet that tax cuts and deregulation for the rich will trickle economic benefits down throughout our entire social system. They call it “trickle down” or “supply-side” economics, a rising tide that will float all boats. But it has NEVER happened. Rich people don’t take their tax breaks and start hiring wantonly; they didn’t get rich that way! Yet for almost half a century, supply-side economics have been the solid driving force in Republican doctrine. As I said, that practice has never worked anywhere.

After the 2017 GOP tax cut, reducing corporate taxes from 35% to 21% all at once, they passionately declared that with all the new jobs that would create, the tax cut would pay for itself. It most certainly did not, adding trillions of dollars to our national debt. Instead of a big rise in well-paying jobs, 2017 saw stock buybacks, dividends to shareholders and corporate mergers and acquisitions instead. Indeed, the magic words against fair taxation, closing loopholes and allocating social costs in proportion to individuals’ and companies’ ability to pay is countered with the inaccurate expression: “creeping socialism.” The result: the worst income inequality in our nation’s history.

The notion that if you tax those mega-wealthy, you will disincentivize innovation, investment and cause those mega-rich to leave. The GOP claims: “Penalizing high-net-worth individuals, however, would drive out the wealth creators, bring in less revenue, and weaken the economy over time.” Improve the News. Really? That never seems to happen. Where would such Americans relocate to build their businesses at lower local tax rates? Which nations have really such low tax rates as well as a huge surplus of well-educated STEM workers who would accept lower pay? Where is the educated labor force needed to grow large successful businesses these days? Where would the mega-rich would enjoy relocating? Precisely.

I’m Peter Dekom, and until we abandon the mythology of supply-side economics and find a way to level the playing field and tax the mega-wealthy accordingly, income inequality will only grow worse.