McQuaig and Brooks report that in the Gilded Age, John Rockefeller got 7000 times more than the average U.S. income. In contrast, John Paulson, who made a fortune betting against sub-prime mortgages, received 100,000 times the average U.S. income – or as much as 100,000 nurses. In 1980, the average CEO had a pay gap of 45 to 1 with the company’s average worker; in 2010, the average CEO maintained a pay gap of 340 to 1 over the company’s average worker.
By 2007, the richest 400 paid only 16.6 percent of their income in taxes. Washington bailed out Wall Street, paying 170 billion to insurer AIG, which then paid $14 billion to Goldman Sachs and $1 billion to John Paulson, overseen by Treasury Secretary Henry Paulson (unrelated to John). In fact, if folks who “earned” more than $7 million paid taxes at the 1960 rates, in 2007 the U.S. Treasury would have received an extra $281 billion. Deficits anyone?
The current capital gains rate is 15 percent. Why should someone getting his/her income from investments pay so much less than the person who earns a livelihood from the sweat of his/her brow?
Child poverty in the U.S. stands at 21.7 percent; in Denmark it is 2.4 percent. The Scandinavian average is 3.3 percent. Inequality prevails in societies are less equal, especially in marketplace-dominated economies like the U.S.
In the final chapter, McQuaig and Brooks summarize their tax reform proposals: Adopt a financial transaction tax internationally; support international measures for a clampdown on tax avoiders and evaders (this would mean both setting up a global system of reporting assets transferred, simple as the passport system, and imposing a global financial transaction tax); strive to change public attitudes toward taxes as essential to democracy; repeal the estate tax and replace it with an inheritance tax payable by recipients.
McQuaig and Brooks then recommend that such new governmental revenues be used to establish educational trust funds for every American child, exclusively available for education and training, which might reduce inequality and increase productivity and overall revenues.
— Maggie Phair