A short quiz on recent news:
1) Florida taxes its poorest citizens at what rate in proportion to the richest?
- Half as much.
- The same.
- Twice as much.
- Nearly seven times as much.
2) In which of these states did the wealthiest 1 percent NOT capture ALL the post-recession income growth between 2009 and 2012?
- North Carolina.
3) Who said this? “Portfolios are strong, but paychecks are weak. Millions of Americans want to move forward in their lives – they want to rise – but they’re losing hope.”
- Elizabeth Warren.
- Paul Krugman.
- Jeb Bush.
- Marco Rubio.
The answers: 1) d. 2) d. 3) c.
Yes, that was Jeb Bush, sounding remarkably like Warren about America’s glaring and growing income gap. Speaking at an auto dealer’s convention, he said that if 60 percent of Americans believe they’re still in a recession, “it’s because they are in a recession. . . they see a small portion of the population on the economy’s up escalator.”
Bush’s remarks, a likely test run for his stump speech in quest of the Republican presidential nomination, spoke of remedies only in such generalities as tax code reform, which means different things to many people.
Traditional Republican economics prescribe pampering the top and maybe something will trickle down. Given his record as governor, it may be fanciful to expect him to advocate higher minimum wages, universal free community college, infrastructure investment and other methods to prime the pump at the bottom rather than the top.
For him to broach the subject, however, suggests that Bush has sensed the potential in appealing to the multitudes of Americans who are or ought to be mad as hell that their savings and salaries have been left behind and that their children and grandchildren can’t expect as bright a future as they did.
Reports out of Washington say that even some GOP congressional leaders are nervous about that. But are they worried enough to buck the Tea Party, Grover Norquist and the spend-a-billion Koch Brothers? Not that anyone could tell from their dismissive response to the president’s modest budget proposals.
Two recent reports document the dismal situation of Americans in general and Floridians in particular.
According to a joint study by the Economic Policy Institute and the Economic Analysis and Research Network, Florida in 2012 (the most recent year for pertinent data) had the fourth-largest earnings gap, more than 43 to 1, between the top 1 percent and the bottom 99.
Post-recession, Florida’s richest grew their real income nearly 40 percent while everyone else suffered a loss of 7.1 percent. The rich got it all.
Meanwhile, Florida’s tax policies remained skewed in the wrong direction. According to the latest periodic report from the Institute on Taxation and Economic Policy (ITEP) Florida is still the second most regressive state behind only Washington, which also lacks an income tax. State and local taxes cost the poorest 20 percent of Floridians 12.9 cents of every dollar they earn. But the rich pay only 1.9 cents, meaning the poor are taxed 6.7 times harder.
In fact, Florida is starkly regressive across the entire range. Even middle-income people pay 8.5 cents on the dollar, more than four times more than the richest.
Bush’s policies as governor contributed to the inequity by eliminating Florida’s tax on stocks, bonds and most other intangibles.
The ITEP report made clear that every Floridian’s tax burden declined somewhat between 1996 and now, but the more you made the greater the cut – precisely the reverse of fair tax policy.
The joint report, titled “The Increasingly Unequal States of America,” reflects that the top 1 percent got 95 percent of all post-recession income growth nationwide. In Florida and 16 other states, they got it all and then some. In 22 others, the top 1 percent captured at least half the growth.
In terms of current income, only Connecticut, New York and Nevada showed worse top-to-bottom inequities than Florida.
The unearthly paychecks and bonuses of the Wall Street parasites who create nothing of material value to society contribute to the earnings inequity. The joint report notes other, broader reasons why the gap, after narrowing from the 1940s through 1979, has widened since:
“The earlier era was characterized by a rising minimum wage, low levels of unemployment after the 1930s, widespread collective bargaining in private industries…and a cultural and political environment in which it was unthinkable for executives to receive outsized bonuses while laying off workers.
“Today, unionization and collective bargaining are at historic lows not seen since before 1928. The federal minimum wage purchases fewer goods and services than it did in 1968. And executives…think nothing of demanding bonuses after bankrupting their companies and receiving multi-billion dollar taxpayer bailouts.”
Is Bush the one to correct that? Is Hillary Clinton? She’s as thick with Wall Street as husband Bill was when he agreed to ignore the lessons of 1929 and repeal the Glass-Steagall Act, which brought on the derivative disaster. We need a president who would sooner trust a coiled rattlesnake than trust Wall Street.
But Elizabeth Warren isn’t running. Too many people doubt that she could win. The pity of it is that they’re probably right.
Martin Dyckman is a retired associate editor of the St. Petersburg Times. He lives near Waynesville, North Carolina. Column courtesy of Context Florida.