At a time when Seattle should be investing in services to mitigate suffering and halt the spread of disease, we can anticipate budget austerity at all levels of government for years to come.
“This probably will be the toughest economic climate our city has faced in multiple generations,” said Mayor Jenny Durkan, responding to news of a probable $300 million revenue hole in the 2020 city budget. “What the city will have to do is likely to be very tough.”
We’ve seen this movie before. In the absence of fair taxation, economic recession always brings cuts in services just when we need them most.
Meanwhile, the coronavirus has been very good to those who need help least. As homebound consumers have turned to online sales for virtually everything, Amazon turned in an astonishing $75.4 billion in first quarter revenue.
That averages $33 million in sales an hour. The city of Seattle’s entire, devastating budget shortfall amounts to around what Amazon brings in over the course of a good night’s sleep.
We’ve been building toward this point of absurdity for decades. America’s relentless march toward radical inequality began in the late 70s, when the post-war deal between business, labor, and government fell apart under the pressures of globalization.
Since then, policies that favor the rich have delivered record breaking levels of income disparity year after year.
According to census data released last September, inequality is at its highest level in more than 50 years. Since 1980, income for the top tenth of the One Percent has increased six-fold. The top one percent of families have captured more than 50 percent of the benefits of economic growth since 2009.
Recent events only accelerate that trend. While the virus hits low-income people in the workforce the hardest, the nation’s most wealthy are benefitting most
At a time when America desperately needs expanded unemployment benefits and small business relief to protect working people and disproportionately affected communities of color, the Trump administration has worked tirelessly to enrich the wealthy.
CNN reports that since the coronavirus started shutting down jobs last March, more than 30 million Americans have filed for unemployment benefits. Meanwhile, according to the Bloomberg Billionaire’s Index, the world’s 500 richest people have seen their wealth grow by at least 20 percent since March 23.
Due to changes in tax policy under the CARES Act, this will only get worse. According to an analysis by the Joint Committee on Taxation, tax breaks embedded in the coronavirus stimulus package mostly benefit the rich.
Eighty Two percent of gains from the tax change flow to those who are millionaires or better, with the biggest benefits going to hedge fund investors and real estate owners. Ninety five percent of those benefitting from the tax change earn $200,000 or more annually.
Less than 3 percent of tax changes in the CARES Act go to those earning $100,000 annually or less. At a time of nearly unprecedented economic pain for most Americans, tax breaks to the well-off will result in $92 billion in lost federal revenue.
Whether we’re talking about a rich city like Seattle or an abandonment zone like Flint, Michigan, the acceleration of radical inequality in this time of desperate need is unsustainable.
Is there a silver lining here? Perhaps. At least one elite believes that the excesses of crony capitalism in the age of the coronavirus might be the turning point after decades of greed.
Simon Henderson, the headmaster of Eton — a private boarding school to the likes of princes William and Harry, Boris Johnson and David Cameron — has speculated that popular outrage over post-coronavirus inequality could trigger social change on a scale not seen since the world wars.
“Years from now,” he said in an interview with the United Kingdom’s Times newspaper, “when historians look back at the events of 2020, they are likely to identify COVID-19 as the trigger for profound change.”
With millions of lives at stake, that change cannot come soon enough.
Tim Harris is the Founding Director Real Change and has been active as a poor people’s organizer for more than two decades. Prior to moving to Seattle in 1994, Harris founded street newspaper Spare Change in Boston while working as Executive Director of Boston Jobs with Peace. He can be reached at director (at) realchangenews (dot) org
Read more in the May 6-12, 2020 issue.