How the Super-Rich Are Abandoning America
How the Super-Rich Are Abandoning America
The wealthiest Americans who hate "takers" enjoy $2 trillion in special tax carve outs, more than double the entire annual budget of Social Security.
November 4, 2013 - 8:35am
As they accumulate more and more wealth, the very rich have less need for society. At the same time, they've convinced themselves that they made it on their own, and that contributing to societal needs is unfair to them. There is ample evidence that this small group of takers is giving up on the country that made it possible for them to build huge fortunes.
They've Taken $25 Trillion of New Wealth While Paying Less Taxes
The 2013 Global Wealth Databook shows that U.S. wealth has increased from $47 trillion in 2008 to $72 trillion in mid-2013. But according to U.S. Government Revenue figures, federal income taxes have gone DOWN from 2008 to 2012. Even worse, corporations cut their tax rate in half.
American society has gained nothing from its massive wealth expansion. There's no wealth tax, no financial transaction tax, no way to ensure that infrastructure and public education are supported.
Just how much have the super-rich taken over the past five years? Each of the elite 5 percent -- the richest 12 million Americans -- gained, on average, nearly a million dollars in financial wealth between 2008 and 2013.
2. For the First Time in History, They Believe They Don't Need the Rest of Us
The rich have always needed the middle class to work in their factories and buy their products. With globalization this is no longer true. Their factories can be in China, producing goods for people in India or Europe or anywhere else in the world.
They don't need our infrastructure for their yachts and helicopters and submarines. They pay for private schools for their kids, private security for their homes. They have private emergency rooms to avoid the health care hassle. All they need is an assortment of servants, who might be guest workers coming to America on H2B visas, willing to work for less than a middle-class American can afford.
The sentiment is spreading from the super-rich to the merely rich. In 2005 Sandy Springs, a wealthy suburb of Atlanta, stopped paying for most public services, deciding instead to avoid subsidizing poorer residents of Fulton County by hiring a "city outsourcer" called CH2M to manage everything except the police and fire departments. That includes paving the roads, running the courts, issuing tickets, handling waste, and various other public services. Several other towns followed suit.
Results have been mixed, with some of CH2M's clients backing out or renegotiating. But privatization keeps coming at us. Selective decisions about public services threaten to worsen already destitute conditions for many communities. Detroit, of course, is at the forefront. According to an Urban Land Institute report, "more municipalities may follow Detroit's example and abandon services in certain districts."
3. They Soaked the Middle Class, and Now Demand Cuts in the Middle-Class Retirement Fund
The richest Americans take the greatest share of over $2 trillion in Tax Expenditures, Tax Underpayments, Tax Haven holdings, and unpaid Corporate Taxes.
The Social Security budget is less than half of that. Yet much of Congress and many other wealthy Americans think it should be cut. These are the same people who deprive the American public of $300 billion a year by not paying their full share of the payroll tax.
4. They Continue to Insist that They "Made It on Their Own"
They didn't. Their fortunes derived in varying degrees - usually big degrees - from public funding, which provided almost half of basic research funds into the 1980s, and even today supports about 60 percent of the research performed at universities.
Businesses rely on roads and seaports and airports to ship their products, the FAA and TSA and Coast Guard and Department of Transportation to safeguard them, a nationwide energy grid to power their factories, communications towers and satellites to conduct online business, the Department of Commerce to promote and safeguard global markets, the U.S. Navy to monitor shipping lanes, and FEMA to clean up after them.
Apple, the tax haven specialist, still does most of its product and research development in the United States, with US-educated engineers and computer scientists. Google's business is based on the Internet, which started as ARPANET, the Defense Department's Advanced Research Projects Agency computer network from the 1960s. The National Science Foundation funded the Digital Library Initiative research at Stanford University that was adopted as the Google model. Microsoft was started by our richest American, Bill Gates, whose success derived at least in part by taking the work of competitors and adapting it as his own. Same with Steve Jobs, who admitted: "We have always been shameless about stealing great ideas."
Companies like Pfizer and Merck have relied on basic research performed at the National Institute of Health. A Congressional Budget Office study reminds us that The primary rationale for the government to play a role in basic research is that private companies perform too little such research themselves (relative to what is best for society).
5. As a Final Insult, Many of Them Desert the Country that Made Them Rich
Many of the beneficiaries of American research and technology have abandoned their country because of taxes. Like multinational companies that rationalize the move by claiming to be citizens of the world, almost 2,000 Americans, and perhaps up to 8,000, have left their responsibilities behind for more favorable tax climates.
The most egregious example is Eduardo Saverin, who found safe refuge in the U.S. after his family was threatened in Brazil, landed Mark Zuckerberg as a roommate at Harvard, benefited from American technology to make billions from his 4 percent share in Facebook, and then skipped out on his tax bill.
An Apt Summary?
Bernard Marcus, co-founder of Home Depot and member of the Forbes 400, had this to say about any American who might object to all the greed: "Who gives a crap about some imbecile?"
Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.