2017 was, by all accounts, a shit year. But it might have been one of the best years of all time for rich people in America.
While most working people were trying to find enough time off of work this year to get our eclipse glasses from what few public libraries are still open, the super-rich saw their net worths climb to new highs as the Trump administration continued to shower them with nonstop benefits. Here are just a few of the opulent Christmas presents the absurdly rich got this year from the Trump economy:
1. A year of non-stop record-breakers on Wall Street
Since January, the Dow Jones has increased by 25 percent, while the S&P 500 has increased by 20 percent. And while President Trump has boasted on more than one occasion about how stocks have boomed under his presidency, it’s important to note that a vast majority of working-class Americans don’t benefit from a rallying stock market.
According to a 2014 assessment of IRS returns, 88 percent of people who made more than $1 million in income had money in the stock market. However, only 8 percent of people making $25,000 per year own any stock at all. And only 18.7 percent of all American taxpayers have money in the stock market.
In short: It’s kind of hard to be excited about a bull market when roughly one in three Americans live at or near poverty.
2. Corporate profits are at an all-time high while wages remain stagnant
This fact is tied to the previous section about the stock market, as stock prices are more a reflection of a company’s short-term profits as opposed to the economic security of that company’s workforce. According to data compiled by the Federal Reserve Bank of St. Louis, after-tax corporate profits were $1.86 trillion in the third quarter of 2017 — an all-time high.
However, these profits aren’t being shared with workers. The St. Louis Fed found that while wages cratered following the Great Recession, they never rebounded the same way corporate profits did. A comparison of the St. Louis Fed’s two tables assessing wages and profits tell a story of profits steadily growing and wages steadily declining. By the first quarter of 2010, after-tax profits had already surpassed pre-recession levels, while wages remain lower than 2009 levels:
If your boss’s stock options have been on a roll but your paycheck hasn’t increased — congratulations! You’re a victim of the class war.
3. Trump just cut the shit out of rich people’s taxes
The tax bill that President Trump signed into law late last week was a smorgasbord of handouts for the rich. Some of the beneficiaries include 14 Republican senators drawing income from pass-through entities, and President Trump’s heirs, who stand to save $1.24 billion in taxes on inherited wealth.
Tax rates for corporations will be reduced from 35 percent to 21 percent. The estate tax threshold will be doubled, allowing unearned wealth to be handed down tax-free if it’s less than $10 million ($22.4 million for couples). According to Mother Jones, the wealthiest earners will see their tax rate drop from 37 percent to 29.6 percent when taking new tax breaks for pass-through entities into account.
Granted, while lower-income individuals will also get a tax cut, those rates will expire in 2027 while the corporate tax cut remains permanent. By 2027, people making between $20,000 and $30,000 per year will face a tax hike of roughly 26 percent.
It’s painfully obvious to most Americans that this tax bill is a blatant handout to rich people. As FiveThirtyEight.com noted, the Republican tax bill is actually less popular than previous tax hikes.
4. Rising home prices disproportionately benefit rich people
Many American cities are in the midst of an affordable housing crisis, with rents continuing to climb to all-time highs despite wages remaining lower than they were during the Great Recession. The St. Louis Fed found that, like corporate profits, home prices reached an all-time high in 2017 after rising steadily ever since February of 2012.
Data from the U.S. Census Bureau shows that, like stock ownership, homeownership is almost exclusively for rich people. 78 percent of Americans making more than the median income are homeowners, compared to just 48 percent of Americans making less than the median income.
Additionally, homeowners tend to skew older, as most millennials are struggling with tens of thousands of dollars in student debt seen as a requirement for attending college (which is itself a requirement for getting a good-paying job). Roughly 40 million Americans have student debt, and the debt itself has ballooned to more than $1.4 trillion.
Earlier this year, the Federal Reserve Bank of New York released a study showing that for millennials aged 28-30, roughly 35 percent of the decline in homeownership between 2007 and 2015 can be traced directly to student debt burdens.Mean student debt by age 24 more than doubled between 2003 and 2011, and the New York Fed estimates that there would be 360,000 more millennial homeowners in 2015 if tuition rates remained at 2001 levels:
Homeownership has long been equated with achieving the American Dream. But for young people and Americans earning below the median income, that dream has increasingly become a mere fantasy.
5. Trump’s deregulation crusade is a godsend for rich people
President Trump declared that he aimed to bring federal regulations back to 1960 levels. By 2018, he’s promising to repeal three old regulations for every new regulation introduced under his presidency. However, fulfilling that promise would mean repealing the Voting Rights Act of 1965, the Civil Rights Acts of 1964 and 1968, the Americans with Disabilities Act, parts of the Clean Water Act, and the Clean Air Act.
However, many of the regulations the Trump administration has undone involve the enrichment of multinational corporations that lobbied against legislation regulating them following the financial crisis of the late aughts.
This summer, Attorney General Jeff Sessions’ Department of Justice announced it would not defend an Obama-era rule that made workers earning less than $47,000 per year automatically eligible for overtime pay. While the May 2016 regulation doubled the original overtime threshold, labor advocates said the rule change was necessary to accommodate millions of American workers who put in more than 40 hours of work per week.
In October, Vice President Mike Pence cast the deciding vote to kill an Obama-era regulation in the Dodd-Frank financial reform law that allowed consumers to file class-action lawsuits against financial institutions. This vote came roughly a month following the Equifax breach, in which millions of Americans’ sensitive information was hacked and leaked thanks to Equifax’s poor cybersecurity practices.
And earlier this month, the U.S. Department of Labor asked for legislation allowing for restaurant owners to pool servers’ tips and distribute money earned by tipped workers to salaried employees, like cooks and dishwashers. Because the federal minimum wage for servers is just $2.13 an hour, this means the people who wait your tables depend on your tips to make ends meet. The National Restaurant Association — the main lobbying arm for restaurant owners — has long since argued that tips should belong to owners, not the servers who earn them.
Rich people have had a banner year in 2017. Will 2018 be the year when the tables start to turn for the 99 percent, or will the new gilded age continue unabated?
Carl Gibson is a politics contributor for Grit Post. His work has previously been published in The Guardian, The Washington Post, The Houston Chronicle, Al-Jazeera America, and NPR, among others. Follow him on Twitter @crgibs or send him an email at carl at gritpost dot com.