Journalism: What Went Wrong?

Nobody knows what a "fair share" of taxes is, but our actual share is easy to calculate. For 1991, taxes from all levels of government were $9,049 for every man, woman and child in America. That's $27,147 in taxes for an average family of three ... Median income was $38,244 for that same family. So the actual per-capita share of total taxes for that average family was a staggering 71% of their total income!

Fact is: we lost the tax revolt 15 years ago. Despite the Reagan tax cuts, government's take is still racing out of control. But now they simply hide these taxes from middle-class voters. They nail your employer, or the capital needed to create new jobs and improve productivity.

The middle class is shrinking. But corporate profits declined during a major boom. And the rich did not increase their share of total wealth. So ... who's grabbing it all?

(Updates/revisions: Links have been added for all sources cited. More recent data has not been added, because this column rebuts specific claims regarding a specific era, and much of this data is no longer reported by The Statistical Abstract.)

For well over a year, we've watched and read alarming reports of a disturbing new trend: The rich are increasing their share of income and wealth, at the expense of middle-class workers. The story was told in a syndicated series, by journalists Donald Barlett and James Steele. Their work has been published in a popular book, America: What Went Wrong?

Bill Moyers featured the book in his PBS series, ''Listening to America.'' And Phil Donahue said Barlett and Steele were a ''sure bet'' to win the Pulitzer Prize. But it's all a hoax.

Don't take my word for it. See for yourself. If I show you where to see the truth, with your own eyes, will you spend just ten minutes looking at it? The facts are at your library, in a reference book titled Statistical Abstract of the United States. I'll walk you through it.

Using 1989 tax data, Barlett and Steele analyzed $150 billion in capital gains, and report only $48 billion was earned by low and middle income taxpayers. Look again. Three-fourths of all investment profits are never reported on tax returns: tax-exempt employee pension plans.

Employee pension assets increased $385 billion in 1989. Those were net profits, owned by workers, but never reported on tax returns analyzed by Barlett and Steele.

By comparison, these tax-exempt pension profits were 24% greater than taxable corporate profits of $311 billion. In less than a minute, we've found $535 billion of investment profits for 1989 ... of which $433 billion (81%) went to the middle class.

For the decade, pension assets increased by over $2 trillion, also unreported and untaxed.

Barlett and Steele claim federal debt is the ''greatest transfer of wealth this century -- from middle-class taxpayers to the wealthy individuals who buy notes to finance the federal debt.'' Another whopper. All individuals, wealthy or not, owned less than 11% of the public debt.

Total pension assets were $2.9 trillion in 1989. That could have bought 145% of the federal debt (then $ 2.0 trillion) ... or 97% the entire New York Stock Exchange!

The rich increased their share of reported income and wealth. But a much larger share of income and wealth went to worker pension funds, unreported and untaxed. And if tax cuts for the rich helped restore the stock market -- which had sunk lower in real dollars than the Crash of '29 -- then pension funds got a free ride up when the market tripled .

What about wages? As a percentage of national income, wages and salaries fell 1.4% from 1980 to 1989. Corporate greed, right? Wrong. Same Table, a few lines lower. Compared with wages, corporate profits fell more than twice as much (3.5%). And corporate profits peaked in 1980, before the mid-80s boom.

Real wages increase only when productivity increases. And productivity increases when we invest more capital per worker. Liberals disagree; they say invest more in education. But they also claim Mexico can steal our high wage jobs. Does this mean Mexican peasants are better educated than we are?

Tax fairness is a great issue for politicians. Nobody knows what a ''fair share'' of taxes is. But our actual (per-capita) share of taxes is easy to find. In 1991, before the Clinton tax hikes, taxes from all levels of government were $9,049 for every man, woman and child in America. That's $27,147 in taxes for an average family of three. For that same family, median income was $38,244. So the actual share of total taxes for that average family was a staggering 71% of their total income!

At the federal level, per capita taxes were $4,762 in 1991. Increase that by 5% per year, or $5,250 for 1993. That's $15,750 for an average family of three. Compare that with your own federal taxes last year, based on the size of your own household.

All taxes are ultimately paid by individuals, and the per capita tax burden is over 2/3 of median income. That's what Barlett and Steele are covering up -- the hidden taxes that destroy jobs and reduce living standards. It's not just taxes. Employer mandates are the same game.

The middle class is shrinking. But corporate profits declined during a major boom. And the rich did not increase their share of total wealth.

So ... Who's grabbing it all?