Guest column: It is hard to float a boat on a trickle
“A rising tide lifts all boats,” a phrase made popular by President John Kennedy, conveys the idea that growth of the general economy benefits everyone.
That phrase helped contribute to the foundational belief in this nation that an expanding economy benefits everyone from laborers and blue-collar workers to executives, small businessmen and billionaires.
One of Kennedy’s speechwriters said he saw the thoughtful phrase used by a local chamber of commerce, the New England Council. While there are accounts the phrase was used decades earlier and the idea had surely been part of public dialogue, Kennedy’s use in 1963 helped stamp the concept into the public consciousness.
While those with the biggest yachts always benefit most from economic growth, there were wide ranging economic benefits from rapid economic growth following World War 11.
While that growth and those benefits lasted for decades, those of us in smaller boats have not fared nearly as well as the yacht owners since President Kennedy helped popularize the phrase.
Some of that rising inequality no doubt lies in what the late economist Allen Krueger called “The Great Gatsby Curve.”
Basically, the evidence demonstrates that children from poor families are less likely to improve their economic status as adults in countries where wealth is concentrated in fewer hands.
In America, wealth in concentrated in the hands of a very few. The richest 1% of Americans own about 39% of America’s wealth. The richest 10% own more than 70% of our nation’s wealth.
While Americans have traditionally believed in and worked toward a goal of equal economic opportunity, observation of life in America today makes it impossible to deny that children of wealthy parents enjoy a range of benefits unavailable to children of working class or middle-class parents.
Similarly, children of low-income workers and middle-income parents face challenges unknown to wealthy families.
While all Americans have great opportunities, coming from a place of poverty or wealth still matters far too much in the likelihood of reaching one’s potential.
Over time, the results of this unequal starting point are magnified as family wealth remains virtually untaxed, or at best vastly undertaxed, as generation after generation increases its wealth.
From 2014 to 2018, the richest 25 people in America increased their net worth by $400 billion. Despite that increase in wealth, they paid a paltry $13.6 billion in taxes.
Using some simple arithmetic to translate those numbers into more familiar territory reveals that is the equivalent of paying $13,600 on $400,000 in income. While many of us have never earned that much in annual income, many pay far more than that in annual taxes.
Billionaires have successfully argued to Congress that income from wealth should be taxed differently than income from work.
Workers and members of the middle class who argue that those with the greatest wealth and the highest incomes should pay their fair share have been less successful.
This is at least in part because billionaires and big business interests play an outsized role in crafting economic and tax legislation as well as the messaging justifying those policies.
Therefore, many American workers fight for the tax breaks and special privileges given to the wealthy, because they believe the rising tide will lift them out of difficult circumstances.
As economic opportunities have dwindled for the average worker in America, some officials have continued to focus on a rising tide.
However, other politicians began to change their messaging. Ronald Reagan conveyed the idea that economic growth offers benefits to all through his “trickle down economics” phrase.
Predictably, relieving billionaires and huge corporations of their financial obligations to the nation left many average Americans struggling to remain afloat financially.
As the wealthiest Americans pay less and less in taxes, workers are left paying the bill for the national defense, infrastructure, police protection and other basics necessary for individual financial success and national economic growth.
There has been great debate over the price tag of a package to develop our infrastructure. Much of the debate revolves around who will pay.
Historically, workers and members of the middle class have been left to pay more and more of the bill for infrastructure and other government initiatives that should lift all boats.
However, economic policies promoted by the wealthiest members of our society have caused the middle class to shrink considerably in recent decades.
Therefore, we need more than a trickle from wealthy Americans as we move forward.
If the wealthiest Americans will simply pay their fair share, a rising tide could once again lift all boats.
— Tony Choate has lived in the Ardmore area for more than 50 years. He earned his master's degree in political science from Purdue University after earning a bachelor's degree in legal studies from East Central University. He worked for several years as an adjunct instructor for Murray State College, teaching courses in American history and American government and politics.