The media has played a tremendous part in describing the rich versus poor in the United States or the 99% versus the 1%. There is a great truth to the fact that the elite make a disproportionate amount of money…but the elite are the business owners, the CEO’s, the individuals and families that earn most of their income from investment or business ownership and can deduct nearly all taxes away and shelter the rest…meaning a tax increase will probably only really impact the bottom 99.5%.
As an illustration of the dichotomy, two news stories that I just ran across:
Squeezed by rising living costs, a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income.
The latest census data depict a middle class that’s shrinking as unemployment stays high and the government’s safety net frays. The new numbers follow years of stagnating wages for the middle class that have hurt millions of workers and families.
After two years of lower pay packages, chief executives at the nation’s major companies enjoyed a 36.5% jump in pay last year, according to a leading survey of CEO compensation.
The most lucrative sector for CEO pay was health care, which included three of the nine top-paid executives, including the two most lucrative packages:
$145 million for John Hammergen of McKesson Corp. (MCK, Fortune 500), which distributes drugs and health and beauty care products to pharmacies; and
$98 million for Joel Gemunder, who retired in July 2010 as CEO of Omnicare (OCR, Fortune 500), which provides drugs to nursing homes and other long-term care facilities.
Two very different pictures of American prosperity. An issue that will most likely end up being sold by politicians to the public as “taxes on the rich”, but will end up being realized as higher taxes paid by the 25th-99.5th percentiles.