At racetracks all across America, lucky bettors every so often rake in small fortunes when the horses they pick to finish one, two, three â€” a trifecta â€” just happen to finish in that order. Last spring at the Kentucky Derby, for instance, a $1 trifecta betÂ returnedÂ a tidy little $11,475.30.
But Americaâ€™s awesomely affluent donâ€™t have to place any bets to rake in windfalls. Theyâ€™re essentially hitting jackpots on a daily basis, as a â€śtrifectaâ€ť of timely just-released research reminds us.
The first of these three newly released blasts came in late September from the Census Bureau. The gap between Americaâ€™s haves and have-nots, the new Census data show,Â has grownÂ â€śto its highest level in more than 50 years of tracking income inequality.â€ť
The first week in October then brought the second blast, an Institute for Policy Studies analysis on the latest trends in corporate executive pay. In 2018, the IPS reportÂ details, 50 major U.S. corporations paid their CEOsÂ over 1,000 timesÂ the compensation that went to their most typical workers.
The third blast comes from two of the worldâ€™s top inequality scholars. In 2018, economists Emmanuel Saez and Gabriel Zucman inform us, Americaâ€™s 400 richest households paid taxes atÂ a lower rateÂ than any other income cohort in the nation, the first time thatâ€™s happened since the modern federal income tax went into effect in 1913.
The combined federal, state, and local tax rate on the nationâ€™s richest 400 households, Saez and Zucman have calculated, last yearÂ fellÂ 2.5 percentage points to 23 percent. In other words, the nationâ€™s richest 400 households paid less than a quarter of their income in taxes.
Households in the nationâ€™s poorest 50 percent, by contrast, paid 24.2 percent of their incomes in combined 2018 federal, state, and local taxes.
These disturbing new numbers appear Saez and Zucmanâ€™s new book,Â The Triumph of Injustice. The book traces how tax rates on the richest of Americaâ€™s rich have nosedived since the middle of the 20th century. In 1950, the two economists point out, our top 400 households had a combined tax bill that averaged 70 percent of their incomes. A generation later, in 1980, that combined rate took 47 percent â€” about half â€” of top-400-household incomes. That rate has since fallen to last yearâ€™s 23 percent.
The bottom line: Americaâ€™s richest used to pay over three times more of their income in total taxes than they do now. The predictable result? Americaâ€™s richest have become phenomenally richer than they used to be.
The business magazineÂ ForbesÂ began publishing its annual list of the nationâ€™s 400 richest in 1982. The shipping magnate Daniel Ludwig topped that first annualÂ ForbesÂ list. His total fortune: just $2 billion.
ForbesÂ earlier this month released the 2019 ranking of the top 400. The fortuneÂ now neededÂ toÂ enterÂ the ranks of Americaâ€™s 400 richest: $2.1 billion.
Admittedly, weâ€™re not taking inflation into account with this comparison. So letâ€™s do that. Adjusting for inflation, Ludwig â€” the richest single individual in the inauguralÂ ForbesÂ list â€” had a 1982 fortune worth $5.3 billion. A stash that size today wouldÂ rank himÂ just 125th.
In that initial 1982Â Forbes 400, Americaâ€™s richest averaged $230.8 million in net worth each. In todayâ€™s dollars, that would come to nearly $633 million. The 2019 top 400 average: $7.4Â billion, 32 times the top-400 average net worth in 1982.
Wages for the typical American worker, meanwhile, have been â€śincreasingâ€ť on average by less than aÂ half percent a yearÂ over the last four decades.
â€śItâ€™s the economy, stupid,â€ť Bill Clintonâ€™s top campaign guru quipped during the 1992 presidential campaign.
No, itâ€™s the inequality, stupid, the vast gap between the rich and everyone else thatâ€™s poisoning nearly every aspect of modern American life, from ourÂ crumbling infrastructureÂ to ourÂ endangered environment. Hitting an occasional trifecta at the racetrack wonâ€™t close that gap. Taxing the rich â€” and confronting their corporate power â€” will.
This blog was originally published at OurFuture.org on October 22, 2019. Reprinted with permission.
About the Author: A veteran labor journalist, Sam Pizzigati has written widely on economic inequality, in articles, books, and online, for both popular and scholarly readers. Sam Pizzigati co-edits Inequality.org. Follow him at @Too_Much_Online.