It Is Not About Equity

by Keith Cooper

From Broader View Weekly, January 20, 2011

In the pages of this paper, on more than one occasion, I have talked about the growing wealth gap in this country. It is something that I have been concerned with for some time and something that I believe we all should be concerned about.

I think it is apparent, however, that at least my brother Gordon and possibly one BVW reader in particular misread my intent. In his column, Gordon focuses on the utopian concept of economic equity and on the distribution of wealth as an attempt to achieve this equity. In a recent e-mail message one Broader View fan asked several questions about the relationship between the wealth gap and taxation, one of which was “How does taxing the rich benefit the poor?” These approaches are oversimplifications of the complex issue.

Gordon is right that the extreme wealth gap in the United States is a symptom of a larger problem. But it is a problem that cannot be addressed by a distribution of wealth. As much as that term has been used against President Barack Obama, in order to label him as a radical leftist, Marxist or socialist, he and his administration do not see that as the answer either.

I don’t believe heavy taxation of the wealthy or somehow distributing their wealth among the poor is a solution to poverty and plight in this country. I do believe “of whom much is given much is required”. The national debt and deficit are growing in the U.S. and to continue to limit the wealthy’s tax burden as revenue sources, while cutting funding for programs that benefit the common good, is not only unfair, it is irresponsible.

There is no easy fix for the overwhelming disparity of income among Americans. There is no single target such as the greed and avarice of the wealthiest, nor the lack of opportunity afforded the poorest of us.

As I have said, it is a complex dilemma. There is an undeniable systemic bias favoring corporate America and the wealthy elite, while disparaging the working and poverty classes. This is a bi-partisan disregard for the poor evidenced in the policies of the current administration (even though less blatantly than during the previous administration’s reign). One need only look to the deal-making between the White House and the insurance, medical and corporate lobbies that stripped the healthcare legislation (which Republicans now seek to repeal) of meaningful provisions.

Policy makers who contribute to income disparity by imposing corporate welfare in all its forms, while devaluing safety nets and programs that benefit the poor, are part of the cause of the great plague that is the wealth gap. We citizens would do well to address those policies by expressing our displeasure to our representatives, by correspondence and, in a couple of years, at the ballot box. If we continue to allow the ruling elite (which includes members of both political parties) to strengthen the corporate and wealth classes while crippling the poor and eliminating the middle class, we become part of the problem.

I believe at the core of our failure to address this imbalance in policy, and the resultant income disparity, is a disconnect between the middle and working class and the realities of our economic system. Workers who still have jobs often protest high taxation when their income bracket currently excludes them from much of the burdens of the taxes they oppose. There is remarkable disapproval among the working class of the Estate Tax which impacts so few Americans that most of us would never feel its sting if it was doubled or tripled. The only explanation I can find for working poor voting against their economic interests and supporting relaxed taxation of the wealthy is a Horatio Alger syndrome in which if one somehow rises from rags into riches he or she seeks to avoid taxation of their bounty.

In past decades there has been an attempt to convince the working and middle class that supply-side economic imbalance would benefit all by trickling wealth downward. However, even though some conservatives cling to this argument and maintain that relaxing the tax burden on “job creators” will miraculously create jobs and prosperity, this myth is becoming increasingly hard to sell to those who are out of work because the corporate giants here have outsourced the best jobs to China, India and Pakistan. There is growing acceptance of the fact that industry and its employment opportunity in the United States will not return in our lifetimes.

Gordon may be correct that income equity is an impossible pipe dream and that it is an ideal with potential negative outcomes. But we should still be concerned as the United States rises toward the top of the Gini Index as a country with immense wealth inequity. It is an indicator that we are abandoning the interests of the common man while lifting up the wealthy elite. My fear is that within the century we will become like Haiti, with our ruling class occupying the mansions and state houses while the masses beg on the street or barely survive in service industries. As the wealth gap grows the American dream dies. As the wealth gap grows we risk descending from a super power to a third world country. As the wealth gap grows we surrender fairness and justice to the free market.