Some aspects of American life disappoint me. Now, that is rather an astonishing understatement. Often, I am furious. One aspect of our contemporary scene that pisses me off to no end involves our slow abandonment of progressivity in our tax system. Since the Reagan revolution, we have shifted the burden of paying for public goods from those who easily can afford the bill to those middle and working class folk who cannot easily carry this fiscal burden. My cynical view is that that trend was quite intentional, designed to erode support for government among the middle classes. And what has this erosion of progressivity bought us … hyper- inequality and internal divisions.

If you broke the U.S. population into quintiles, you would roughly get the following distribution of household incomes. NOTE: the brackets to the right are the proportion of survey respondents who typically claim that they are 1 (upper class), 2 (upper middle class), 3 (middle class, 4 (working class), and 5 (lower class).

Top 20% $153,001 and above [2%]

2nd 20% $94,001 to $153,000 [14%]

3rd 20% $58,001 to $94,000 [38%]

4th 20% $30,001 to $58,000 [35%]

5th 20% $0 to $30,000 [11%]

A disproportionate number of those surveyed lump themselves in the center as either middle or working class types where working class is a polite way of saying lower middle class. The median household income usually is pegged somewhere around $70 to $75,000 dollars (it varies marginally from year to year). The average HH income is in the six-figure range, but that estimate is skewed by the outliers at the very top and thus tells us little. The median figure is more helpful since it represents the 50th percentile with half the population above and half below that income figure.

Now, somewhere above the median income figure lies an important psychological point. It estimates the perceived income needed to meet basic needs … a subjective but important line. While that figure differs across surveys, the typical estimate usually is set at a few thousand dollars above the actual median figure.

This point in the distribution is important. Below that line, the so-called marginal utility of each extra dollar earned is seen as quite important to the family. Above that line, this utility at the margin (or for next dollar earned) begins to fall. Thus, an extra hundred bucks to someone making $200,000 per year is less consequential than that same hundred bucks to someone making $50 grand annually. What benefit is the next billion dollars when you already have $100 billion or more?

Now, let’s go back to the difference between median and average estimates of central tendencies. Averages respecting income distributions are typically much higher since those at the tip of the pyramid really are outliers. Their income and wealth figures are astronomical, thus tending to disproportionately distort any averages calculated. And America is one of the most econominally unequal nations across the globe. Our averages are inflated by the outrageous disparities associated with those at the very top.

It turns out that some 800 American billionaires hold 3.8 percent of all U.S. wealth while the entire bottom half of the population only controls some 2.5 percent of the entire pot. The higher one goes in the distribution, the more skewed things get. The bottom quintile has a typical income of $16,000 annually. The top quintile sees $278,000 per year. That figure jumps to $336,000 for the top 5 percent of earners, then to $820,000 for the top 1 percent, and then to $3.3 million for the top tenth of one percent. Small steps up to the top of the distributional pyramid translates into huge financial windfalls.

Wealth is even more unequally distributed than income. The top 1 percent of Americans control 26 percent of the nation’s wealth while the bottom quintile controls a mere 3 percent. This makes even more sense when you realize that the same 1 percent at the top control 54 percent of all stocks and mutual funds. The problem with such a gross maldistribution of the nation’s treasures is that power follows the gold. As the oft-cited play on the golden rule goes, he who has the gold makes the rules.

Absent some unknown countervailing force, only the national government has sufficient leverage to correct the tendency for unfettered free markets to inevitably spiral toward more and more inequality. Quite clearly, the rules are continually tweaked (in the pursuit of self-interest) to reward those already at the top. There are few incentives nor many natural mechanisms to diminish obsequious and ravenous avarice.

It is axiomatic that the government can help here. It has, in the past, redistributed resources from one group of Americans to another. The right inevitably screamed that it was unfair to those who were successful in life when their taxes would go to less fortunate citizens. But that older inage of redistributional schemes from rich to poor were more appropriately associated with the pre-Reagan era. Since 1980, the distributional flow has been more from the middle of the pyramid to the top. Thus, it should surprise no one that those in the top quintile generally receive a larger return from the federal government in terms of subsidies, credits, and other benefits than that they pay in taxes. In fact, as I’ve noted elsewhere, the rich now pay proportionally less in taxes than working class stiffs … a far cry from the post WWII era when the top marginal income tax rates ranged from 70 to over 90 percent, and corporate taxes were much higher.

We did a lot of good during that older era during which the affluent paid their share, if not more. Among other things, we built our internal infrastructure (highways and airways), invested in science and higher education, protected our democratic institutions here and abroad, and built up our middle class by expanding opportunities and supporting labor.

With the dawn of neo-liberalism and the ascendancy of the hard right, we now have new definitions of basic societal constructs such as fairness and opportunity. It is now a winner-take-all playing field based on the ethics of a no-holds barred Darwinian struggle for survival and supremacy. Some level of struggle may well be advantageous to progress, but excess competition ultimately erodes the communal fabric essential to a level of collaboration fundamentally necessary in a modern society. If we don’t work together, we perish separately.

The U.S. has fallen out of the top 20 countries in surveys of national happiness. In part, this is due to the stresses and despair felt among our youth. Epidemiologists point out the spike of ‘deaths of despair’ as opiod use skyrockets along with suicides. The happiest nations, no surprise here, are found among those nations that tax their citizens at higher levels while providing extensive public services to support families and smooth out the uncertainties of life. Unceasing struggle with only a tattered safety net available to the non-winners eventually takes a toll.

When I did policy work, we often noted that budgets were values oriented documents. They reflected the kind of world we wished to have. Perhaps it is time to reexamine that question. Just what kind of future world do we want? What type of world do we want to leave to our grandchildren? I surely hope we decide to leave a better world than the one we currently have.