top of page
Search

Federalist No. 15 and the Crisis of Inequality





In Federalist No. 15, Alexander Hamilton wrote about the national crisis that was facing Our Nation in the late 18th Century. Back then, crisis arose from a national government under the Articles of Confederation which was too weak to respond to the demands of a growing Nation.  America was being taken advantage of by countries all over the world and was too weak to stand up for itself. Hamilton argued a new National Union was needed to protect our interests.


In Federalist No. 15, Hamilton said that “experience…. is the oracle of wisdom.”  Hamilton urged the citizens of the new Nation to look at their own experience and decide what was true and what was false. Let us do the same today.


Today, the great National crisis comes in the form of income inequality.   In 2019, 4 in 10 Americans had almost no savings and would not be able to handle an unexpected emergency that cost over $ 400. Look into your own finances and ask yourself today: if you had an unexpected emergency of over $ 400, would you be able to handle it?  How much savings do you have?  How are you doing today? How much economic pain can you and your family handle before you reach the breaking point?


Look at the chart at the top of this post again and consider the following facts.


  • In the 1950’s, the top 4% made as much as the bottom 35%.  In the 1970’s, the top 4% made as much as the bottom 38%. In 2017, the top 4% made as much as the bottom 57%. 

  • From 2000 to 2018, Middle class incomes have only increased at an annual rate of .3%. At the same time, the annual wealth for those at the top increased at a rate of 3.2%.

  • From 1970 to 2018, the share of income held by middle class families dropped from 62% to 43%.  During this same time, the share of income held by upper class families increased from 29% to 48%. 


Now consider the shifting tax rates over time. 


  • In 1981, the highest tax rate was 70%.  In 1982, it was 50%. In 1987, the top tax rate was 38.5%, in 2018, it went down to 37%. 


Look at the rates for Capital gains, which is money made from investments and other forms of property gains. 


  • In 1979, it was 35% for individuals and 30% for corporations.  In 1981, 20% for individuals and 28% for Corporations.  In 2003, 15% for individuals and 35% for Corporations.  Starting in 2018, it was 20% for individuals and 21% for Corporations. 


The trendlines are clear: while middle class families have made less and less, the wealthiest have made more and more but have not been required to pay their fair share. Meanwhile our National Debt, and the cost of living, has soared.


We need to change our tax laws in simple ways that restore fairness to America.  This is our great National Crisis today, and is the source of so many of our problems and stresses. Middle Class Americans have been forced to tighten their belts for decades, while millionaires and billionaires have had it easy.


In order to solve this crisis we must tax all income that exceeds $ 10 million dollars in a given year at a rate of 50%. This will restore fairness to our economy and get our finances back in order.  We must end the National Crisis of inequality in America today.


Sources

 
 
 

Comments

bottom of page