A relative handful of Americans, a key congressional panel forecasts, will take home more this year than half the nation’s taxpayers combined.
Americans worried about the ever-intensifying concentration of wealth at America’s economic summit have been focusing of late, quite understandably, on the latest annual round of Wall Street bank bonus awards.
But we now have even more reason to worry about our savagely unequal distribution of income and wealth — from researchers at the congressional Joint Committee on Taxation. Earlier this month, that panel released income estimates for the coming year. They make for a sobering read.
In 2010, the tax panel calculates, a little over 1 million U.S. taxpayers will report incomes over $500,000. These 1 million top-earners will collect an astounding $241 billion more in income this year than the just under 80 million taxpayers who will take home less than $40,000.
Wall Street’s movers and shakers did their best last week to camouflage their contribution to this enormous national income imbalance.
At Goldman Sachs, CEO Lloyd Blankfein announced that his giant bank would be devoting a mere $16.2 billion to the pay pool for Goldman’s 32,500 employees, far less than the $20 billion-plus that financial analysts had expected.
Goldman, overall, is devoting only 35.8 percent of the bank’s record 2009 revenue to compensation. Last year, pay ate up 48 percent of Goldman revenue.
Goldman’s chief financial officer, David Viniar, wants all of us to consider this smaller payout share a thoughtful, conscientious bank response to widespread public concern over excessive banker compensation.
“We are not deaf to the calls for restraint,” noted Viniar, “and we heard them.”
Restraint? Even with the smaller share of bank revenue going to pay, the “average” Goldman employee will pocket $498,153 for the year.
Relatively few Goldman employees, of course, will actually see anything close to half a million dollars. Goldman’s top bankers and traders, as always, will see far higher rewards than the bank’s clerks and receptionists.
How much higher? We won’t know the details until later this year when New York state attorney general Andrew Cuomo will release his analysis of bank payouts.
One significant Goldman Sachs shareholder isn’t waiting to find out. The public agency that runs mass transit in the Philadelphia area last week filed suit against Goldman executives for their ongoing bonus grab.
“Goldman’s employees are unreasonably overpaid for the management functions that they undertake,” the Southeastern Pennsylvania Transportation Authority lawsuit charges.
The plaintiffs may want to call billionaire investor Warren Buffett to testify on their behalf. Buffett last week exploded at the sheer greed he continues to see on Wall Street. Any bank CEOs who go to the government for bailout billions, Buffett told Fox Business News, should have to “forfeit all their net worth.”
“Make it so the CEO of the institution that fails or that goes to the government and needs help really gets destroyed himself financially,” said Buffett. “I mean, why should he come out any better than somebody who gets laid off from a job as an autoworker?”
Goldman Sachs has so far repaid the $10 billion in bailout aid the bank collected under the federal TARP program. But the bank received another $43.4 billion of direct benefit from other bailout programs that has never been reimbursed.
The American people may not know these exact numbers. But they get the drift, and their support for taking on Wall Street is soaring. A Washington Post-ABC News poll, released Thursday, found that 73 percent of Americans would support “a special tax on bonuses over $1 million.”
By a 72-to-19 percent margin, adds a new CBS poll, Americans now feel that the federal bailout has benefited “mostly just a few big investors and people who work on Wall Street.”
That judgment may be a but unfair. Last week, after all, Goldman Sachs did earmark $500 million of its revenue for charity. That truly magnanimous gesture steers into good works all of 1 percent of the company’s record 2009 rake-in.
Sam Pizzigati edits Too Much, the online weekly on excess and inequality.