When Jesus stood up in his hometown synagogue in Nazareth, and read from the Isaiah scroll, his aim was not to sooth the consciences of the first century Jeff Bezos, Michael Bloombergs, or Jim Waltons. He rose to preach good news to the poor, recovery to the afflicted, liberation to those held captive, and freedom to those oppressed.
He did not relent or equivocate on any of this during his three years of ministry leading up to his crucifixion. The message he kept pressing home in his encounters and through his parables was consistent: love God, and love your neighbor, unconditionally. That has become an increasingly fragile and unheeded call in this hyper polarized,
Civil discourse, attentive dialogue, and open minds—let alone open hearts—are endangered species in our social and political arenas. Our agora has been vacated for cells and closets where we nurse grievances, cultivate conspiracy theories and manufacture zero sum propositions—less for you is more for me.
All manner of explanations have been offered: social media algorithms bent toward antagonism, diffusion of shared norms in an increasingly multicultural and multiethnic society, shift of news media from reporting toward more commentary and analysis, an enduring gun culture and fixation on violence, and an erosion of reasoning and deep reading skills. Subsuming all of these is the profound economic inequality that has pervaded American society over the past three decades, and the confusion, resentment and depression it has engendered.
During the post World War II economic expansion, from 1948 to the early 1970s, when GDP more than doubled, the top marginal personal income tax rate stood at 90 percent in the 1950s and then shrinking to 70 percent in the 1970s. The gap between what executives made and workers made was fairly narrow: in 1965 the pay ratio was 20 to 1. But over the past three decades that gap has ballooned. The CEO to worker income ratio stands now at 300 to 1. Even the pandemic hasn’t dented it much. Coca Cola’s CEOmakes 1600 times as much as the typical Coca Cola worker. Further fueling the inequality crisis is the tax code that is weighted more toward wage income than earnings derived from capital. Shell companies, trusts, real estate and investment loopholes are all ways that the wealthy avoid paying taxes. If your income is almost entirely from investments—stocks, bonds, real estate—as it is for most of the top CEOS, then your major tax liability is the capital gains tax which tops out at 20 percent, but because of the loopholes the actual tax paid by those owning 1 percent of the nation’s wealth runs from 1 to 4 percent.
The rich just keep getting richer, while lower and middle income households watch their prospects for financial security diminish under a regressive tax code and salaries and wages that barely keep pace with inflation. The supply-side shift in economic policy by the Reagan administration in the 1980s, touted to float all boats, mostly floated those of the wealthy.
The disproportionate gains of the wealthiest Americans were also clear in the 2017 tax cut legislation engineered by the GOP. Personal rates were cut for all income levels by 2 to 4 percent, but sunsetted for 2025. Some reductions were made permanent though: reduction of the corporate rate to a flat 21 percent, and doubling the amount shielded from estate taxes. Along with adding $2.289 trillion to the nation’s debt, the bill fell well short of generating GDP growth to offset the tax revenue loss. Corporate investment in the economy—translating to more hires, and higher wages—never materialized. Businesses instead plowed the tax savings into stock buybacks, executive bonuses, and debt pay down.
Four years on, even with the Democrats in the driver seat, the chances for significantly reducing income inequality are fading. The “soft” infrastructure bill has shrunk from $3.5 trillion to $1.75 trillion, and along the way has dropped Medicare dental and vision coverage, permission for the Federal government to negotiate drug pricing, and free community college. The planned wealth tax on unrealized capital gains is also gone, limiting the revenue source to surtaxes on income exceeding $10 million (affecting 16,000 tax payers), a minimum 15 percent tax on large corporations, a 1 percent tax on stock buybacks, and a 50 percent minimum tax on corporate foreign profits, which analysts are skeptical will be enough to cover the cost. With all this whittling over the months amid rising inflation, it is still uncertain whether Democratic moderates (basically Senators Joe Manchin and Kyrsten Sinema) will back the bill without being assured it will pay for itself.
Even pared down the Build Back Better bill would be a game changer for the working class. Universal free pre-K, extended child tax credit, expanded Medicaid, and construction of 1 million affordable homes. But will it be enough, assuming it passes, to wean blue collar and rural voters from their infatuation with Trump and the identity politics smokescreen thrown up by the GOP, and convince them to embrace this New Deal, one that truly has the capacity to tilt the prospects for a better life to their advantage?
In this era of profound institutional distrust, who is willing to make that leap of faith? Neither the one percenters nor those striving to make ends meet appear eager for an overhaul of the engine driving our economy and driving our expectations for a fulfilling life. One fears losing ground in a scheme weighted against their welfare; the other fears losing the opportunity to gain more ground on a field tilting to greater inequality. Who faces the greatest risk? Who has the most to lose?
In the Gospel of Matthew we learn of the rich man, who claiming to have followed all the rules, asks Jesus what he must do to inherit eternal life. Jesus challenges him to choose between two kingdoms, two ways of living: self serving or self sacrificing. “You lack one thing; go, sell what you have, and give to the poor, and you will have treasure in heaven; and come, follow me.”
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