From an infamous, leaked, 2005 Citigroup memo, declaring the U.S. the world’s leading plutonomy:
[T]he top 1% of households in the U.S., (about 1 million households) accounted for about 20% of overall U.S. income in 2000, slightly smaller than the share of incme of the bottom 60% of households put together. That’s about 1 million households compared with 60 million households, both with similar slices of the income pie! Clearly, the analysis of the top 1% of U.S. households is paramount. The usual analysis of the “average” U.S. consumer is flawed from the start. To continue with the U.S., the top 1% of households also account for 33% of net worth, greater than the bottom 90% of households put together. It gets better (or worse, depending on your political stripe) — the top 1% of households account for 40% of financial net worth, more than the bottom 95% of households put together.
The gist of Citigroup’s analysis is that its clients should invest in the type of things that the top 1% consume — “toys for the wealthy” — because economically, the rest of us don’t really matter.
In a plutonomy there is no such animal as “the U.S. consumer” or the “U.K. consumer”, or indeed the “Russian consumer”. There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie.
Likewise, there is no such thing as a “Washington taxpayer” either.
On average, Washington is a relatively low tax state, ranking only 35th nationally as a percentage of personal income, even according to the conservative Tax Foundation. But due to the highly regressive nature of our sales tax reliant tax structure — the most regressive in the nation — this burden is distributed incredibly unevenly, with the bottom 20% of households, those earning less than $20,000 a year, paying an average of 17.3% of their income in state and local taxes, while the top 1% of households, those earning over $537,000 a year, pay only 2.6%.
This is, of course, class warfare, and as billionaire investor Warren Buffet is famous for saying, his class is winning. And his is the class who the editors at the Seattle Times defend.