New Rules Needed to Vanquish Legacy of Inequality and Growing Wealth Gap
(COMMON DREAMS) Deirdre Fulton, August 9, 2016 — Reforming the U.S. tax code to help low-income Americans build wealth and savings while reducing wealth concentration at the top would go a long way toward narrowing an “ever-growing gap” between white households and households of color, according to a new study released this week.
The report from the Institute for Policy Studies (IPS) and the Corporation for Enterprise Development (CFED), entitled The Ever-Growing Gap: Failing to Address the Status Quo Will Drive the Racial Wealth Divide for Centuries to Come (pdf), reveals a stark and widening chasm that—absent significant reforms to large-scale public policies—will only continue to grow.
Specifically, it finds that:
- Over the past 30 years the average wealth of white families has grown by 84 percent—1.2 times the rate of growth for the Latino population and three times the rate of growth for the black population.
- Over the past 30 years, the wealth of the Forbes 400 richest Americans has grown by an average of 736 percent—10 times the rate of growth for the Latino population and 27 times the rate of growth for the black population.
- In fact, the billionaires of the Forbes 400—which includes only two African-Americans and five Latinos—now own more wealth than the entire Black population and one-third of the Latino population, combined. That’s 400 wealthy individuals versus more than 60 million people.
- By 2043—the year in which it is projected that people of color will make up a majority of the U.S. population—the wealth divide between white families and Latino and black families will have doubled, on average, from about $500,000 in 2013 to over $1 million.
“In short,” Emanuel Nieves and Josh Hoxie (of CFED and IPS, respectively) write in a blog post on Tuesday, “wealth is concentrated in very few hands. And those hands are mostly white.”
Given, as the report puts it, “the essential role that wealth plays in achieving financial security and opportunity” as well as changing demographics in the U.S., this divide represents an urgent dilemma to be solved.