Certainly if we can perfect our tax system so that it does more to reward work, we should do it. And, if we can ferret out any abuse of existing preferences or tax credits that are not being properly used in accordance with the law, we should do that and we should take corrective steps. But I must say respectfully that it is my belief that the focus of this hearing and the focus of the overall work this year and last year of the Ways and Means Committee in this area is misdirected.
Let's look at the facts: The richest 1/5 of Americans are reported to own 84 percent of the wealth of this country. While the bottom 40 percent are estimated to own about 3 or 4 percent of the wealth of this country. The Congressional Budget Office reports that over the last three decades after tax income for the top 1 percent soared by 277 percent, while 2/3 of the income gains from 2002-2007 flowed to the top 1 percent of households.
The focus of this hearing is not on the 1,500 millionaires who paid zero income tax in a recent year. It is not on those corporations who not only paid zero, such as in some years General Electric, Boeing, Wells Fargo, and in some cases, actually received money back in credits from the government. It is not on the area where revenues are not flowing to our government. It is not about those at the top. It is all focused on whether those who have an ownership interest in 3 percent or less of our nation's wealth--whether they are getting too much.
The overall concept of this hearing seems to follow closely the report last year of the House Republican Study Committee concerning the disincentives of our current system. This is the same group and same set of reports that condemned as welfare-- and seemed to call for reductions in-- Pell Grants, Title I grants to disadvantaged schools, Head Start, the School Lunch Program and the School Breakfast Program. I believe that is a mischaracterization of those important initiatives that help those who are struggling to become part of the middle class and to share in the American dream, to help them advance. It is wrong to continue to deny those opportunities.
When a mother with a couple of children who lives in Austin or San Marcos or San Antonio leaves the Welfare program for a full-time, minimum wage job, the Earned Income tax credit and the Child tax credit are available to help her and other working families--it increases the value of her work in a significant way and is an incentive to advance.
These are serious problems that need to be addressed to encourage and help people move into the middle class and to see that our nation has the revenues that it needs in order to sustain those programs.
During the same period of time through the recent recession, there were reports by the PEW Research Center that Hispanics particularly represented the hardest hit by the recession--a 66 percent drop in wealth from 2005-2009, a widening of the gap in our country that has not been seen in the last quarter-of-a-century during the time that data was collected.
We need more focus on those real problems rather than on the small issue that is raised by today's hearing.