Households across the country are still feeling the effects of the Great Recession, with unemployment falling very slowly, while foreclosures are still increasing, along with poverty rates and oil prices. Family wealth is currently down $12.8 trillion from its 2007 peak.
However, one group of Americans is doing very well — corporate CEOs, whose pay is returning to pre-recession levels:
At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010 as the executives’ compensation started working its way back to prerecession levels, a USA TODAY analysis of data from GovernanceMetrics International found. Workers in private industry, meanwhile, saw their compensation grow just 2.1% in the 12 months ended December 2010, says the Bureau of Labor Statistics.
Median CEO pay last year was $9 million, the highest since 2007. The median CEO bonus was $2.2 million. These gains come as income inequality in the U.S. is already the worst its been since 1928. “We have the recipe for controversy over CEO pay: big increases in CEO pay that show up following run-ups in stock prices coupled with high unemployment rates,” said Kevin Murphy, professor of finance at the University of Southern California.
But right now the discussion on Capitol Hill is centered on how much should be cut from the non-defense discretionary portion of the budget during the remainder of 2011; these cuts will fall almost exclusively onto middle-class and low-income families. Senate Democrats have attempted to reframe the discussion to include new sources of revenue, including a tax on millionaires, but yesterday, House Republicans reiterated that taxes are off the table.
Speaker of the House John Boehner (R-OH), for instance, derided the idea as a “job-crushing tax hike,” while House Majority Leader Eric Cantor (R-VA) said that it would be “a terrible move in the current economic environment.”
But raising taxes on millionaires is not, in fact, the same as raising taxes on job creators. According to a recent Wall Street Journal-NBC poll, an overwhelming majority of Americans (81 percent) say that adding a surtax on millionaires is an acceptable way to reduce the budget deficit. This is far higher than than the percentage that say that would accept recent moves by the GOP like attempting to defund Planned Parenthood or cutting funding for the Affordable Care Act.
Rep. Jan Schakowsky (D-IL) recently released a bill that would implement a graduated income tax on millionaires that would raise $78 billion. Allowing the Bush tax cuts to expire for those making more than $1 million could, in one instant, reduce eight percent of the medium-term budget deficit.