29 Facts About Income Inequality In America That Will Blow Your Mind

inequality

Photo: Wikimedia Commons

Today, average Americans have less power relative to the monolithic corporate and governmental institutions that dominate our society than at any other point in U.S. history. 

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Sadly, this is not what our founding fathers ever envisioned.  Our founding fathers established a government “of the people, by the people, for the people”, but what we have today is very far from that ideal. 

In America today, wealth and power are very highly concentrated, and if you have neither wealth nor power than most of our politicians really do not have any interest in you.  Over the past several decades, those with huge amounts of money and power have been busy rigging the game so that the rest of the money and power slowly but surely funnels into their hands.  If current trends continue, the banksters and the corpocracy will eventually own it all.

If you are a “Kool-Aid drinking Democrat” you are going to be really upset by this article.  If you are a “Kool-Aid drinking Republican” you are going to be really upset by this article.

Most Republicans have been brainwashed into believing that “capitalism” means cheerleading while the big corporations hoover up money and power.

Most Democrats have no trouble with big corporations either because most establishment Democrats have been brainwashed into believing that large concentrations of power (whether governmental or corporate) are generally good.  Most Democrats just wish that big corporations were a little less greedy and were a little more “socially responsible”.

Today, the big banks, the big corporations and the federal government are all in bed with one another and it is average Americans that always lose out.

Our founding fathers tried to warn us about large concentrations of power.  They attempted to establish a very limited central government, they wanted to keep us free from the tyranny of the big banks and they were very suspicious of large corporations.

In a 2010 article, Rick Ungar noted that corporations were very seriously restricted in the early days of America….

After the nation’s founding, corporations were, as they are today, the result of charters granted by the state. However, unlike today, they were limited in how long they were permitted to exist (typically 20 or 30 years), only permitted to deal in one commodity, they could not own shares in other corporations, and their property holdings were expressly limited to what they needed to accomplish their corporate business goals.

My how things have changed.

“Capitalism” is supposed to be about the empowerment of individuals and families and small businesses.

Instead, today “capitalism” has come to mean something completely different.  Today, the biggest, meanest concentrations of wealth devour everyone else with a big assist from the government.

At this point, average Americans mean next to nothing in the political process.  This point was eloquently made in a recent column by Robert Reich….

The unemployed are politically invisible. They don’t make major campaign donations. They don’t lobby Congress. There’s no National Association of Unemployed People.

Their ranks are filled with women who had been public employees, single mothers, minorities, young people trying to enter the labour force, and middle-aged men who have been out of work for longer than six months. You couldn’t find a collection of people with less political clout.

I would not normally quote Robert Reich, but he made a good point.  If you don’t have an army of lobbyists or any money to give to them then most of our politicians don’t really care what you think or how much you are hurting.

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Just think about the amount of power and money that Exxon Mobil or Wal-Mart has compared to the amount of power and money that an average American has.

Our society has veered very far from the egalitarian ideal that our founding fathers once hoped for.

The corporate giants are so powerful that it is next to impossible for small businesses to directly compete with them.

Just try it some time.

Many banks and corporations have become so big that the world literally cannot afford for them to fail.

For example, three U.S. corporations control approximately 90% of the world’s grain trade.

So what happens if those three corporations collapse?

That is something to think about.

But of course average Americans are never “too big to fail”.  The big banks begged and begged for bailouts, but if you are late on your debt payments they will chuck you into prison.

Also, when wealth and power are so highly concentrated, economic rewards flow only to a few.  Corporatism (as opposed to true capitalism) produces a handful of winners and a whole lot of losers.

As I have written about previously, the middle class is being destroyed.  If current trends are allowed to continue long enough we eventually won’t have much of a middle class left at all.

So what is the solution?

Well, our liberal friends insist that the solution to all of this inequality is to tax the rich and to distribute the wealth to the poor.

Well, there are three major problems with that.

Number one, when you raise taxes too high you eliminate the incentive to work hard.

Number two, when you make it too easy to depend on government handouts you create an underclass of economic parasites.

Number three, the big corporations and the ultra-wealthy have become masters at avoiding taxation no matter what the rates are.

Before you tax the rich too much, you might want to consider the consequences of doing so.

Why should someone bust his or her rear end to run a business and make a lot of money if the government is just going to come along and take over half of all the money that is made?

Personally, if I ever get into a tax bracket where over half the money I make goes to the government then I simply will not work nearly as hard at that point.

But if that starts happening on a large scale, then you have a significant loss of economic activity which hurts the economy overall.

Already, the top 20 per cent of all income earners in the United States pay approximately 86 per cent of all federal income taxes.

When the government “steals from the rich” and “gives to the poor”, that also tends to create a large group of people that decides that it is easier to take from the government than it is to work for a living.

In 1980, government transfer payments accounted for just 11.7% of all income.  Today, government transfer payments account for 18.4% of all income.

That is not a good trend.

At this point, U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes.

That is not even close to sustainable, but nobody wants to give up their “government benefits”.

Today, 59 per cent of all Americans receive money from the federal government in one form or another.

Yes, there will always be those that cannot help themselves and we should always have a “safety net”.

But when you look around it doesn’t take a genius to figure out that things have gotten completely and totally out of control.

Right now, an all-time record 44 million Americans are on food stamps.

Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, one out of every 6 Americans is on Medicaid.

The U.S. government is even handing out billions of dollars to homeowners that are delinquent on their mortgages.

This is not a formula for long-term economic success.

When people get addicted to government checks they never want to stop.

But this is not what the poor need.

What the poor need are good jobs that pay good wages.  Unfortunately, we keep shipping millions of those jobs overseas.  So now the Chinese economy is thriving and our formerly great manufacturing cities are turning into hellholes.

Handouts do not give people hope, dignity and a future, but jobs can.

Also, as I have written about before, the big corporations and the ultra-wealthy have become masters at avoiding taxes.  There is a reason why approximately a third of all the wealth in the world is held in “offshore” tax havens.

What U.S. corporations are able to get away with is absolutely amazing.

The following figures come directly out of a report by Citizens for Tax Justice.  These are combined figures for the tax years 2008, 2009 and 2010.

During those three years, all of the corporations below made a lot of money.  Yet all of them paid net taxes that were below zero for those three years combined.

How is that possible?  Well, it turns out that instead of paying in taxes to the federal government, they were actually getting money back.

So for these corporations, their rate of taxation was actually below zero.

If you have not seen these before, you are going to have a hard time believing some of these statistics…..

*Honeywell*

Profits: $4.9 billion

Taxes: -$34 million

*Fed Ex*

Profits: $3 billion

Taxes: -$23 million

*Wells Fargo*

Profits: $49.37 billion

Taxes: -$681 million

*Boeing*

Profits: $9.7 billion

Taxes: -$178 million

*Verizon*

Profits: $32.5 billion

Taxes: -$951 million

*Dupont*

Profits: $2.1 billion

Taxes -$72 million

*American Electric Power*

Profits: $5.89 billion

Taxes -$545 million

*General Electric*

Profits: $7.7 billion

Taxes: -$4.7 billion

Are you starting to get the picture?

I wish I could make $7.7 billion, pay no taxes and have the government give me $4.7 billion on top of it.

Our system has become corrupted beyond all recognition.

We need to throw out the current system of taxation and come up with something entirely new.

In fact, the truth is that for most of U.S. history there was not a federal income tax at all.  But that is a story for another day.

If you believe in the U.S. Constitution and in the republic that our founding fathers established, then the very high concentrations of wealth and power in our society today should greatly concern you.  Income inequality is not a “Democrat” or a “Republican” issue.  A vibrant, thriving middle class should be a goal all of us can embrace.

THE NUMBERS ARE WORSE THAN YOU THINK.

In the United States today, the richest one per cent of all Americans have a greater net worth than the bottom 90 per cent combined

Source: New York Times

The wealthiest 1% of all Americans now own more than a third of all the wealth in the United States

The wealthiest 1% of all Americans own over 50% of all the stocks and bonds

The poorest 50% of all Americans collectively own just 2.5% of all the wealth in the United States

The top one per cent of income earners in the United States brought in a total of 10.0 per cent of all income income in 1980, but by the time 2008 had rolled around that figure had skyrocketed to 21.0 per cent

Between 1979 and and 2007, the average household income of the top 1% of all Americans soared from $346,600 to $1.3 million, while average household income for the middle class increased only slightly

Source: Mother Jones

66% of the income growth between 2001 and 2007 went to the top 1% of all Americans

More than 3 billion people, close to half the world's population, live on less than 2 dollar a day

Source: Homes for Hope

The average CEO made 343 times more money than the average American did last year

Source: AFL-CIO

Since 1979, real median weekly earnings for high school dropouts has declined by 22 per cent

Source: New York Times

During this economic downturn, employee compensation in the United States has been the lowest that it has been relative to gross domestic product in over 50 years

Half of all American workers now earn $505 or less per week

Source: Tax.com

Since the year 2000, we have lost 10% of our middle class jobs, while population has gotten significantly larger

Source: Zero Hedge

10 years ago, the United States was ranked number one in average wealth per adult. In 2010, the United States fell to seventh

Source: Zero Hedge

According to one recent study, approximately 21 per cent of all children in the United States were living below the poverty line in 2010. In the UK and in France that figure is well under 10 per cent

Source: CNN Health

Today, one out of every four American children is on food stamps

Source: New York Times

It is being projected that approximately 50 per cent of all U.S. children will be on food stamps at some point in their lives before they reach the age of 18

Source: New York Times

The wealthiest 5% of households in the United States now account for approximately 37% of all consumer spending

Source: USA Today

The number of Americans that are going to food pantries and soup kitchens has increased by 46% since 2006

Source: USA Today

The U.S. poverty rate is now the third worst among the developed nations tracked by the organisation for Economic Cooperation and Development

Source: MSN

Approximately half of all American workers make $25,000 a year or less

Source: MyBudget360.com

The wealthiest 1% of the earth's population controls 39% of the wealth

It is estimated that over 80 per cent of the world's population lives in countries where the income gap between the rich and the poor is widening

Source: Homes For Hope

One year after the recent financial collapse the top 25 hedge fund managers earned a total of approximately $25 billion. That breaks down to an average of $1 billion each

Source: Zero Hedge

Bill Gates has a net worth of somewhere in the neighbourhood of 50 billion dollars. That means that there are approximately 140 different nations that have a yearly GDP which is smaller than the amount of money Bill Gates has

It is estimated that the entire continent of Africa owns approximately 1 per cent of the total wealth of the world

The top 0.01% of Americans make an average of $27,342,212. The bottom 90% make an average of $31,244

Source: Mother Jones

58 per cent of the members of Congress are millionaires while only about 1 per cent of the general population is made up of millionaires

Source: Online Schools

How Does The USA Compare To Other Countries?

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