5 disturbing facts that show the system is rigged against America’s middle class

http://www.salon.com/2014/11/06/5_disturbing_facts_that_show_the_system_is_rigged_against_americas_middle_class_partner/?source=newsletter

Paul Buchheit
Nov. 6, 2014

A recent posting detailed how upper middle class Americans are rapidly losing ground to the one-percenters who averaged $5 million in wealth gains over just three years. It also noted that the global 1% has increased their wealth from $100 trillion to $127 trillion in just three years.

The information came from the Credit Suisse 2014 Global Wealth Databook (GWD), which goes on to reveal much more about the disappearing middle class.

1. Each Year Since the Recession, America’s Richest 1% Have Made More Than the Cost of All U.S. Social Programs

In effect, a reverse transfer from the poor to the rich. Even as conservatives blame Social Security for being too costly.

Much of the 1% wealth just sits there, accumulating more wealth. The numbers are nearly unfathomable. Depending on the estimate, the 1% took in anywhere from $2.3 trillion to $5.7 trillion per year. (All numeric analysis is detailed here.)

Even the smaller estimate of $2.3 trillion per year is more than the budget for Social Security ($860 billion), Medicare ($524 billion), Medicaid ($304 billion), and the entire safety net ($286 billion for SNAP, WIC [Women, Infants, Children], Child Nutrition, Earned Income Tax Credit, Supplemental Security Income, Temporary Assistance for Needy Families, and Housing).

2. Almost None of the New 1% Wealth Led To Innovation and Jobs •••••

Over 90% of the assets owned by millionaires are held in low-risk investments (bonds and cash), the stock market, and real estate. Business startup costs made up less than 1% of the investments of high net worth individuals in North America in 2011. A recent study found that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds. They come from the middle class. •••••

3. Just 47 Wealthy Americans Own More Than Half of the U.S. Population

Oxfam reported that just 85 people own as much as half the world. Here in the U.S., with nearly a third of the world’s wealth, just 47 individuals own more than all 160 million people (about 60 million households) below the median wealth level of about $53,000.

4. The Upper Middle Class of America Owns a Smaller Percentage of Wealth Than the Corresponding Groups in All Major Nations Except Russia and Indonesia.

The upper middle class in the U.S., defined as everyone in the top half below the richest 20%, owns 11.9 percent of the wealth. Indonesia at 10.5 percent and Russia at 7.5 percent are worse off, but in all other nations the corresponding upper middle classes own 12 to 27 percent of the wealth.

America’s bottom half compares even less favorably to the world: dead last, with just 1.3 percent of national wealth. Only Russia comes close to that dismal share, at 1.9 percent. The bottom half in all other nations own 2.6 to 10.2 percent of the wealth.

5. Ten Percent of the World’s Total Wealth Was Taken by the Global 1% in the Past Three Years

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Solution: A Financial Transaction Tax (FTT)

More appropriately called a Financial Speculation Tax, it would help to limit the speculative trading that contributed to the financial meltdown in 2008.

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It’s also a fair tax. While average Americans pay up to a 10% sales tax on shoes for the kids, millionaire investors pay a zero sales tax on financial purchases. They pay just a .00002%SEC fee (2 cents for every thousand dollars) for a financial instrument.

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