Wealth and income inequality is a big problem.
Remember Supply Side Economics? From Wikipedia:
In 1981, Reagan significantly reduced the maximum tax rate, which affected the highest income earners, and lowered the top marginal tax rate from 70% to 50%; in 1986 he further reduced the rate to 28%.
And the tax rate is even less for capital gains.
Since taxes on the most wealthy were reduced in the 80s, the distribution of wealth and income has become further skewed.
Likewise, income inequality rose during that same time. From a Wikipedia article on Income Inequality in the United States:
“Americans have the highest income inequality in the rich world and over the past 20–30 years Americans have also experienced the greatest increase in income inequality among rich nations. The more detailed the data we can use to observe this change, the more skewed the change appears to be … the majority of large gains are indeed at the top of the distribution.” —?Timothy Smeeding
Wealth and income inequality hinders democracy, because the rich have more political influence. Wealth and income inequality reduces social mobility. Increasing poverty reduces opportunities for education. Perhaps most damaging to society, wealth and income inequality limits economic activity, because rich people save and poor people spend.
But those tax cuts and a bigger slice of the pie aren’t enough for our local titans of industry. They want more money from the local taxpayers. They want their hobbies subsidized. They want their property taxes reduced, while our property taxes go up.
You could say that it’s not their fault. That they’re just playing the game. That they didn’t make the rules.
But in fact they played a large part in making the rules. The richest people have the most political influence. They bought Congress. They bought influence in state government. They bought City Council. They contributed to the politicians that queered the game. Income inequality didn’t just happen. Income inequality was engineered.
Everyone is looking out for Number 1. But only in the short term. They treat business like a zero sum game, with winners and losers. Really, business deals are supposed to be good for everyone.
You’d think they’d be ashamed, or embarrassed, or maybe even a little self-conscious about their naked attempts to transfer wealth from the poorest El Pasoans to their own pockets.
Au contraire. They’re doubling down.
In 2018, the El Paso City Council approved $1.2 million in improvements to Southwest University Park, home of the MountainStar Sports Group’s El Paso Chihuahuas. In January, 2021, the El Paso City Council approved nearly $5 in park improvements.
Give ’em an inch, and they’ll pick your pocket.
Where is the WOW button for What An Outstanding Post!
The problem you describe is more than just local. The government spends money like water and the Fed fills the banks with low interest money that is lent to hedge funds to add more of everything (like El Paso Electric) to their portfolios. The rich get richer and wealth more concentrated. El Paso is a microcosm of the trickle up economy that constantly transfers wealth in the form of tax abatements, outright giveaways, make-work vanity projects for the local architects and construction companies, and sweetheart deals like the one Margo did with Foster – 44 acres for 2,000+ acres.
And you wonder why the rich get richer and the rest of us just get by, or worse. Inequality is now systemic, the structures are in place that assure this continual transfer of wealth from average people to the one percent, who rarely if ever pay a fair tax on their incomes. Then they have to get rid if it and so keep looking to buy up everything. Farm land, water rights, houses, planes, yachts, patents, commercial buildings….It’s almost a Midas curse – how do I spend it all before I die?
In some communities (Kechum, Idaho) the essential civic workers like nurses, teachers, grocery store clerks, beauticians have been priced out of even rental housing and are living in tents in the city parks because of the billionaire spillover from next door Sun Valley. The same is true in other wealthy enclaves like San Francisco, Aspen, Sedona… The people needed to make the city work can’t afford to live there. I saw this myself in 2015 when I was a volunteer at Hollyhock, a leadership conference center on Cortes Island, BC. Some of the paid staff lived in tents in the woods. Homes to let went for $1,000+ a week in the summer, not affordable on an $11/hour (CAN) wage. At least the volunteers had a free shared residence.
Further south in Victoria and Vancouver, housing prices were insane, driven up by demand from wealthy Chinese seeking to get their their yuans out of the PRC. It caused much resentment from the locals who could no longer afford a simple detached 3BR home for $1.4M in their own community. A home is the essential financial asset that allows average people to build wealth and a stake in their community. Take that opportunity away and you turn citizens into nomads (I have a few nomad friends, too, if you’ve seen the movie).
Fortunately, El Paso doesn’t have this problem, yet. Nor is this issue on the radar in city hall, as far as I know. But we absolutely have to stop subsidizing these local oligarchs and get back control of our taxable commons.
Remember when we were the backwaters of big city