MLK on Economic Injustice and the Racial Wealth Divideand How the New GOP Tax Law Will Make It All Worse

As we celebrate Dr. Kings legacy, we must remember that economic justice was central to his mission. The gap between rich and poor he highlighted in the 1950s and 1960sand the economic disparities between White and Black Americahave only worsened with time. The recently enacted Republican tax legislation that gives massive tax cuts to the wealthy and big corporations will further exacerbate these troubling national divides.

MLK ON ECONOMIC INEQUALITY

Now our struggle is for genuine equality which means economic equality. (1968)

A true revolution of values will soon look uneasily on the glaring contrast of poverty and wealth. (1967)

[T]here must be a better distribution of wealth within this country for all Gods children. (1965)

• In 1962, the top 1% of American households received under one-tenth of the nations income (8.4%). By 2015, the share of the nations income going to the top 1% had ballooned to almost a quarter (23.5%).
• In 1962, the richest 1% of American households held one third (33%) of the nations wealth (the richest 5% held 54.6%). By 2016, the share of the nations wealth owned by the top 1% had grown to 40% (and the top 5% had grown to two-thirds, or 66.7%).[i] Meanwhile, the bottom 90% of households hold only 21% of the wealth today.[ii]
• The billionaires on the Forbes 400, the wealthiest people in America, have combined net worth totaling $2.7 trillion. Together, this small group has more wealth than the bottom 64 percent of the U.S. population combined. The net worth of the wealthiest three billionaires Jeff Bezos, Bill Gates and Warren Buffettis equal to the bottom half of the U.S. population combined.[iii]
• The recently enacted Trump-GOP tax overhaul gives one-fifth of the tax cuts to the top 1% in 2018, and this share grows to 83% after 10 years.[iv] Their tax cut will average $51,000 in 2018; the bottom 60% of taxpayers will get about a dollar day.[v]
• The Trump-GOP tax law will result in 13 million Americans losing health insurance, and millions more paying higher premiums. The $1.5-$2.2 trillion net cost of the tax cuts will threaten funding for Social Security, Medicare, education and other public services working families rely on.[vi]

MLK ON THE RACIAL ECONOMIC DIVIDE

The inseparable twin of racial injustice was economic injustice. (1958)

Ourincome record is acceptable only if wewish to tolerate a societyin which the average Negro earns half as much as his white counterpart. (1966)

• In 2016half a century after Dr. King noted this unacceptable discrepancymedian Black income was still roughly half that of White income ($60,000 vs. $35,000). Latino families fare only slightly better than Black families with a median income of $39,000.[vii]
• Whats worse, over the past 35 years Black wealth has actually shrunk in constant dollars. Already a small fraction of White wealth, it has also greatly eroded in comparison to that of Whites.
• In 1983 (the earliest year race-based comparisons are available), the median net worth of Black households was the equivalent of $7,000. By 2016after the destruction of housing values in the Great Recessionthat figure had dropped to just $3,400. Latino families have seen a small increase in their median net worth, from $4,100 to $6,300 between 1983 and 2016. Meanwhile, median White wealth has grown by over a third, from just over $100,000 to roughly $140,000.[viii]
• Over the past three-and-a-half decades, median Black wealth has gone from 7% of White wealth to just 2%.[ix] In other words, the median White family has gone from owning 15 times more wealth than the median Black family to more than 40 times more! The 269 richest people in America have more wealth than the entire Black population of over 14 million households.[x]
• The Trump-GOP tax law delivers most of its tax cuts to the wealthy83% to the richest 1% by 2027which will significantly increase the income and wealth gaps. It also weakens the estate tax, the only direct federal response to the nations widening wealth gap. Under the new rules, couples with fortunes of up to $22 million wont pay a dime in estate tax, allowing for further accumulation of dynastic wealth.[xi]
• The Trump-GOP laws massive tax cuts on corporate and business income will also widen the racial wealth gap. Since minorities have lower rates of corporate stock ownership[xii] and business income,[xiii] they will benefit less from the tax cuts, while suffering more from the cuts in public services the tax reductions will require.