WONK ROOM: McCain’s Plan To ‘Redistribute The Wealth’ To The Already Wealthy
However, McCain is absolutely going to redistribute wealth. He is just going to redistribute it to the already wealthy. By doubling down on the Bush tax cuts and proposing $175 billion in tax cuts for corporations, McCain’s policies will exacerbate the already astounding income inequality in the United States.
On Monday, the Organization of Economic Development (OECD) released a report showing that “the United States has the highest inequality and poverty in the OECD after Mexico and Turkey, and the gap has increased rapidly since 2000.” The report notes that “in the United States, the richest 10 percent earn an average of US$93,000 — the highest level in the OECD. The poorest 10 percent earn an average of US$5,800 — about 20 percent lower than the OECD average.”
An analysis by the Center for American Progress Action Fund shows that President Bush’s economic policies “redistributed wealth to the richest Americans and left the majority with stagnating wages and declining household incomes.” As Scott Lilly noted yesterday:
Based on data prepared by the Internal Revenue Service from tax returns filed during the post-9/11 recovery (2002 to 2006), household income grew by $863 billion during the period. The 15,000 families at the top of the income scale saw their annual incomes go from about $15 million a year to nearly $30 million. They alone accounted for more than 25 percent of all of the growth in income for the entire country. The remaining 1.7 million families in the top 1 percent of households accounted for nearly another 50 percent.
Currently, the United States’ income concentration is at its highest level since 1928. Meanwhile, McCain has embraced the Bush economic agenda, proposing making the Bush tax cuts permanent, a move from which the bottom 60 percent of taxpayers would only see 12 percent of the benefit
But income inequality is cause for even more concern than the simple numbers suggest, since it also has an effect on mobility. McCain said yesterday that “in this country, we believe in spreading opportunity.” It should give him pause, then, to note that just “7 percent of children born to parents in the bottom wealth quintile make it to the top quintile in adulthood,” and “36 percent of children born to parents in the bottom wealth quintile remain in the bottom as adults.”
OECD Secretary General Angel Gurria said that “greater income inequality stifles upward mobility between generations, making it harder for talented and hard-working people to get the rewards they deserve.”
As Matthew Yglesias wrote yesterday:
It’s neither possible nor desirable to have complete equality of income, wealth, or opportunity. But at the same time, it’s impossible to prevent large inequalities in income and wealth from creating the kind of large inequalities in opportunity that most people, including people like McCain who are committed to making the distribution of wealth and income as unequal as possible, find undesirable.