Much individual wealth truly belongs to society

The Cap Times
Opinion & Commentary

Someday in the not-too-distant future, Wisconsin taxpayers will look back to February 2009 when Governor Jim Doyle proposed to raise the income tax rate on Wisconsin’s wealthiest households and Wisconsin corporations, and say, “This was truly a turning point when taxpayer fairness reform began in Wisconsin."

Once the economic realities are fully grasped by the public and they recognize that the top 1 percent of US households now receives more income than the bottom 120 million Americans combined - only then will we wonder just how stupid we could have been.

Wisconsin native and economist Gar Alperovitz in his latest book, “Unjust Deserts,” identifies four major American myths. First, that the wealthy few and elites are most responsible for wealth creation and jobs. Two, that in return these rare individuals and elites deserve most of the nation’s wealth. Third, that high taxation for the rich and elite will harm the economy for everyone. And fourth, that it is the poor, the old and the disabled who are the chief recipients of public “entitlements.”

Alperovitz informs us that since the beginning of the second half of the twentieth century it has become increasingly clear to economists that anything a person cannot produce alone is part of society’s cumulative knowledge and technological inheritance and belongs to all of us. Just one example, there would be no Bill Gates or Warren Buffett if the larger society hadn’t created and maintained through the years a constitutionally free and regulated market place. This too can certainly be seen as a public “entitlement.”

Alperovitz’s well documented economic analysis presents convincing historical evidence that throughout most of the 20th century when there was higher taxation of rich individuals and corporations and increased social spending America enjoyed its greatest wealth creation and productivity periods.

Should individuals who invent or manage wealth producing activities not be fairly rewarded? Absolutely! Should not greater attention, however, be given to proportionality and equality? In 1982 the average CEO of an American company received 42 times the compensation received by the average worker. Today that amount has more than tripled.

Madisonian William R. Benedict is a retired social worker now advocating for state funding of stem cell research. He blogs at danecountyalmanac.blogspot.com