Last year, an all-star cast of veteran advocates for low-income people came together, in a new national Half in Ten coalition, with one simple goal: to cut poverty in the United States by 50 percent over the next decade. Is a goal that ambitious, in today's globalized economy, even remotely possible? Can a major nation cut poverty in half in just ten years?

Interestingly, in 1999, Britain's Tony Blair set out to try. Blair pledged an all-out effort by his Labor Party government to slice child poverty in the UK in half by 2010. Last week, an official UK agency released figures on how well that effort is going. The answer: not well at all.

Over the last two years, the UK hasn't made any progress toward meeting Tony Blair’s original child poverty targets. The government’s pledge to halve child poverty by 2010, one British newspaper is noting, sits “in tatters.”

Can U.S. anti-poverty campaigners avoid that sort of abject failure? The Nation magazine, the top progressive periodical in the United States, has just published a special issue on inequality that suggests an answer. In this week’s Too Much, we have more on this landmark publishing event.

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Google billionaire Sergey Brin is going on a $35 million vacation — in outer space. Brin has just plopped down a $5 million deposit with Space Adventures, a Virginia company that reserves seats for the super-rich on Russian spacecraft. Brin will be heavens-bound in 2011, on a two-week-long Soyuz flight. Will he have to drink Tang? At $35 million for his seat, probably not, says the Washington Post. On one previous flight, Space Adventures arranged “a five-star seven-course meal prepared by a celebrity chef.” Space Adventures has so far put five tourists of means into earth orbit . . .

Go driving around Los Angeles County and you’ll currently find just under 60 mega-mansions, residences that sprawl at least 20,000 square feet, about 10 times the size of the typical U.S. single-family home. Go driving around this time next year and you’ll see many more. Despite the national housing crisis, the Los Angeles Times reported last week, L.A. is experiencing a mega-mansion boom. Builders now have 20 new megas under construction. The L.A. City Council did vote last month to place limits on how large new homes in the city can grow. But the limits don’t apply to the city hillsides where much of the new building is going on. The battle to stop this mansion surge — and save the city’s open spaces — keeps getting harder. Says Santa Monica Mountains Conservancy director Joe Edmiston: “Each year it seems there are more extremely rich people with ever larger egos that have to be right on top of the mountainside.”

Another sign that hard times haven’t quite yet hit the awesomely affluent: In Geneva last month set, a jewelry auction set a new all-time world’s record for highest price paid per carat. Laurence Graff, the founder of an exclusive gem shop on London’s Bond Street, paid $4.9 million for “a pear-shaped, 3.73-carat blue diamond.” Graf and his fellow Bond Street jewelers, Reuters reports, are feeling rather chipper these days. They think they’ve dodged the international credit crunch. Explains Marwan Chatila, the proprietor of a shop where retail prices can hit $10 million for that special piece: “This year we were expecting a slowdown, but it hasn't happened.”

In Southeast Asia, far from today’s global media glare, Vietnam and Cambodia are rapidly building tropical paradises — for the rich. Vietnam’s NoiBai International Airport last month welcomed that nation’s first private jet, a $7 million job that belongs to local mogul Doan Nguyen Duc. In Danang, earlier this month, developers broke group on a luxury residential complex with apartments that run $1 million each. In Cambodia’s Phnom Penh, prices for prime city lots have tripled over the past two years, and a 42-story luxury tower, the nation’s first, is now rising on a corner that a public hospital used to call home. Some observers see nothing good in the concentration of Cambodian wealth that is fueling the local building boom. Notes human rights activist Naly Pilorge: “We're moving toward possibly about 10 percent of the population owning 90 percent of the land.”

Helsinki was hopping last week. Finns were flocking to the city harbor to get a glimpse of the 377-foot Pelorus, the largest private luxury yacht ever to make a local mooring. The Pelorus currently belongs to the divorced second wife of Russian billionaire Roman Abramovich. Irina picked up the yacht last year in the divorce settlement. Roman could afford to be magnanimous. He now has a new boat under construction, the 551-foot Eclipse, soon to become the largest luxury yacht ever to take to sea. But the longer-than-a-football field Pelorus can still impress. The boat even carries its own mini-submarine. Still, not all the onlookers in Helsinki last week were going gaga. If Russia taxed the ultra-rich a bit more seriously, some Finns wondered to Helsinki’s largest daily, maybe the country could afford to fix the broken-down St. Petersburg waste-water treatment plant and stop polluting the Gulf of Finland.

Inequality
by the numbers

CEO pay:
the scorecard

Good reads
for your bookshelf

Quote of the Week

“A $2 million or $3 million Manhattan property is not necessarily immune to layoffs. But when you're in the $20 million or $60 million range, there's not much that will affect you.”
Dottie Herman, Prudential Douglas Elliman realty, explaining why, despite the Wall Street credit crash, New York City luxury apartment sales have jumped up 45.7 percent over the past year, Investor's Business Daily, June 12, 2007

New Wisdom
on Wealth

Bob Keener, Forget rebates, change the system, Santa Rose Press Gazette, June 10, 2008. How the rules of the American economy have changed over the past 30 years, to the joy of the yacht crowd, and how they could change back.

If you had $1 million riding on the result of the 2008 presidential election, would you be paying some extra close attention to the race between Senators John McCain and Barack Obama? America's super-rich — those swells who make up the nation's top 0.1 percent of income-earners — now find themselves in that exact position.

In fact, this November's election may matter more to America’s super-rich, in pure dollars and cents, than any other election in U.S. history.

In 2009, the 140,000 households in the top 0.1 percent will pay, on average, $1 million more in federal taxes if Barack Obama makes his way to the White House — and wins congressional approval of his tax plans — than they would if victory goes to John McCain.

Who says so? The Tax Policy Center, a nonpartisan, Washington, D.C.-based research group. The Center, a joint effort between the Urban Institute and Brookings Institution, last week released a new report billed as “A Preliminary Analysis of the 2008 Presidential Candidates’ Tax Plans.”

Put an emphasis on the “preliminary.” Neither the McCain nor Obama camps, the Center notes, have spelled out their tax plans in intricate detail. But the two candidates have floated enough specifics — in speeches, policy papers, and interviews — to allow some meaningful comparisons.

If Senator McCain’s proposals and preferences on tax policy should become law, the Center calculates, the nation’s most affluent 0.1 percent — taxpayers who this year will make at least $2.9 million in income — will pay $269,364 less in federal taxes than they would pay if current tax law stays in place.

If Senator Obama gets his way on taxes, these same households would pay $701,885 more, on average, in 2009 than they would pay under current law. The gap — for the super-rich — between Obama and McCain: nearly $1 million.

The gap would actually run somewhat larger. Last week's Tax Policy Center report appeared just before Obama detailed his plan to subject income over $250,000 to Social Security payroll tax. The Tax Policy Center estimates don’t reflect this higher Social Security tax on the incomes of the wealthy.

What about Americans with less than $2.9 million in annual income? How would they fare under the Obama and McCain tax proposals?

Households currently making under $18,981 will save an average $567 in 2009 if Obama’s tax proposals go into effect and $19 if McCain’s plans become law. More middle class households — those making between $37,595 and $66,354 — will average $1,402 in 2009 tax savings with Obama and $319 with McCain.

The normally understated Tax Policy Center has a word for all these differences: “stark.”

But if you really want “stark,” don’t compare tax burdens under Republican John McCain to tax burdens under Democrat Barack Obama. Compare tax burdens under Republican McCain to tax burdens under former Republican President Dwight D. Eisenhower.

In 2009, says the Tax Policy Center, taxpayers making over $2.9 million a year will pay 28.3 percent of their incomes, on average, in federal taxes if John McCain tax policy becomes law and 39.2 percent if Barack Obama has his way.

These percentages factor in all major federal taxes, not just the individual income tax but estate and even corporate income taxes as well. Following Congressional Budget Office practice, the Tax Policy Center assumes that individuals ultimately bear the cost of corporate income taxes via the impact of these taxes on dividends, capital gains, and other forms of unearned income.

In Eisenhower’s 1950s, America’s richest paid far more in taxes than they would under either the McCain or Obama plans. In 1959, a half-century from 2009, taxpayers who made over $2.9 million, in today's dollars, paid over 45 percent of their incomes in individual income tax alone.

These 1959 wealthy also faced higher taxes on corporate profits and much higher estate taxes on the property they left behind at death. The top tax rate on estate wealth in 1959: 77 percent. McCain is proposing to cut the top estate tax rate down to 15 percent. Obama wants it frozen at 45 percent.

In short, in Eisenhower’s day, the super-rich paid over twice as much of their incomes in taxes as they will if John McCain tax law goes into effect. The good news for the super-rich: In November, Ike won’t be on the ballot.

The New Inequality, a special issue of The Nation magazine, June 30, 2008.

In the UK, over the past dozen years, prime minister Tony Blair and his Labor Party successor, Gordon Brown, have repeatedly refused to do anything that would seriously inconvenience their nation’s rich. Taking any such step, they have argued, makes no sense in the modern world. A nation, they contend, can fight the absence of wealth, or poverty, without confronting wealth’s concentration.

Blair and Brown have never strayed from that line. They’ve let the UK ultra-rich avoid taxes and balloon their fortunes and power. Now the UK poor, as the latest official British government statistics make clear, are paying the price.

Can anti-poverty advocates in the United States avoid the same fate? That remains to be seen. In the United States, as in the UK, many top politicos see any efforts to limit grand concentrations of wealth as a divisive distraction, a political suicide mission that would only alienate America’s rich and prevent the building of an anti-poverty consensus and commitment.

Last week, America’s top progressive journal directly challenged that perspective, with a special issue devoted to extreme inequality. The issue’s basic message? John Cavanagh and Chuck Collins, veteran activists from the Institute for Policy Studies, spell that out in the issue’s introduction.

“We will never achieve social and economic justice for those at the bottom of our economic pyramid,” they note, “until we tackle wealth concentration at the top.”

The rest of this Nation issue — with articles by the likes of Barbara Ehrenreich, author of the best-selling anti-poverty book Nickel and Dimed — explains why.

The issue does that explaining with statistics that show just how clearly the don’t-tax-the-rich zeitgeist of the past 30 years has undermined America’s capacity to invest in real opportunity for all Americans. But the issue also gets at the impact concentrated wealth makes on a more personal level, showing, for instance, how a billionaire hedge fund kingpin like New York’s Bruce Kovner goes about translating his wealth into the political muscle that year after year frustrates legislation to help America’s working poor.

In discussions about concentrated wealth, the wealthy can sometimes come across as so powerful that any attempt to rein them in can seem futile. This Nation special issue doesn’t make that mistake. Indeed, a historical hopefulness runs throughout the issue’s pages, with frequent references to the mid 20th century campaigns that ended America’s original Gilded Age.

Long-time CEO pay critic Sarah Anderson and Too Much editor Sam Pizzigati capture that hopeful spirit in their contribution to the special issue, a look at a dozen policy approaches “that can help slice America's superwealthy down to democratic size.”

Can an offensive against our plutocracy, they ask, actually succeed?

“Why not?” they answer. “Our forebears faced a plutocracy more entrenched than ours. They beat that plutocracy back. Our turn.”

Stat of the Week

The super-rich will pay less of their 2008 incomes in federal income tax than the merely rich, the Tax Policy Center reported last week. The nation's top 0.1 percent of taxpayers will pay an average 18 percent of their incomes in individual income tax. The top 1 percent will pay 18.3 percent. The single biggest reason the super-rich pay less: The current 15 percent top tax rate on most income from capital gains and dividends. In 2008, the top 0.1 percent will get 42 percent of their income intake from money making money.

Too Much is published by the Council on International and Public Affairs, a nonprofit research and education group founded in 1954. Office: Suite 3C, 777 United Nations Plaza, New York, NY 10017. E-mail: editor@toomuchonline.org.