The Betrayal of the American Dream Read Online Free PDF

why it was no accident.
    Over the last four decades, the elite have systematically rewritten the rules to take care of themselves at everyone else’s expense. As postwar U.S. history shows, it doesn’t have to be this way. For decades after World War II, personal income in the United States grew at roughly the same rate for the rich and everyone else, all except for the poorest Americans. During this period, the gap between the rich and the middle class remained about the same.
    The rich would have you believe that high taxes are a damper on the economy, but the postwar economic boom was marked by the highest personal income tax rates on the wealthy in peacetime U.S. history. At one point in the early 1950s, the top rate was 92 percent. No one actually paid 92 percent of their total income in taxes, but the wealthy paid a much higher percentage in taxes than they have paid for many years since. The federal government collected that tax money and routinely reinvested it in the American people. Veterans were able to go to college, families bought homes for the first time, and government invested in infrastructure projects such as the interstate highway system— the benefits of which all Americans continue to enjoy to this day. All boats rose.
    But in the 1970s things began to change. Middle-class incomes, after growing steadily for decades, began to flatten, while incomes in the top bracket rose by quantum leaps. By the early years of the twenty-first century, the rich had captured the lion’s share of the nation’s growing wealth. And they paid taxes at little more than a token rate.
    From 2002 to 2007, the income gains of the top one percent rose 62 percent, compared to just 4 percent for the bottom 90 percent of households, according to economists Emmanuel Saez and Thomas Piketty. Consequently, by 2007 the top one percent of Americans claimed a larger share of the nation’s income than at any time since 1928. Among the richest of the rich—individuals and families with incomes in the top one-tenth of one percent—the gains were even more astronomical: their income rose 94 percent, or $3.5 million a household, from 2002 to 2007, according to Saez and Piketty.
    This, too, was no accident. The rich were getting richer thanks to public policy. Their greatest victory—one that would aggravate the nation’s deficit and substantially widen the gulf that separated them from everyone else—was lobbying Congress to rewrite the tax code in their favor. Since the 1980s, with a few exceptions, the tax rate of the very rich has gone straight down and now bears no resemblance to the rate during the years when America as a whole prospered. The top rate on personal income— 92 percent—has shrunk to 35 percent. But that tells only part of the story.
    In addition to lowering the overall rate for the rich, Congress in 2003 reduced the tax on income from corporate dividends, one of the key income streams for the very wealthy that significantly benefits only about 2 percent of taxpayers. In the 1950s, ’60s, and’70s, millionaires might pay as much as 70 percent of their dividend income in taxes. In 2003 that rate dropped to 15 percent.
    And they want more.
    They plan to cut their taxes even further by having Congress eliminate the capital gains tax on sales of stock and other assets. During his 2012 presidential campaign, Republican candidate Newt Gingrich spoke for many of the elite when he proposed doing away with the capital gains tax, ostensibly to spur investment in America. Eliminating that tax would deepen the income and wealth gap and do nothing to create jobs in America. But that’s okay with the folks who make the rules. In their view, inequity is a reasonable price to pay for the greater profit on the sale of, well, equities.
    When word got out in the press in 2009 that Goldman Sachs was paying more than $16.7 billion in compensation, bonuses, and benefits to executives that year—in the midst of the recession—an