Foxwoods Resort Casino and the income gap
Published: Sunday, October 14, 2012
Updated: Sunday, October 14, 2012 21:10
200 people make up 72% of Foxwoods Casino’s gambling revenues.
This according to Rebecca Carr, the Chief Marketing Officer for the largest casino in the country, when she stopped by campus last week to present to the student organization UConn Marketing Society. If her statistic shocks you, it should. Is it right? Is it fair? Should it be more? Should it be less?
Our nation has the highest income disparity between rich and poor in the industrialized world. Connecticut has the third-highest income disparity nationally behind New York and Washington D.C. (The most equal state financially: Utah.) Is Connecticut’s status bad? Depends who you ask. Yes, Connecticut has 11 of the 400 richest Americans according to Forbes. Our hedge fund managers and Wall Street investors often earn jealousy and resentment from the state’s struggling suburban middle class and urban poor.
But with casino profits down because of recession and bordering states New York and Massachusetts opening gambling venues for the first time, those same billionaires and multi-millionaires are perhaps the primary factor keeping Foxwoods afloat in the present economic climate. Foxwoods is among the state’s largest employers, with about ten thousand workers according to a New York Times Magazine article in March. One could argue that subtracting those two hundred would mean enormous harm for those ten thousand. Not to mention the possibility of erasing the $174 million Foxwoods directly contributed to the state last year, money our state depends upon.
And the oft-repeated claim that the rich are “not paying their fair share” is fictitious: the rich actually pay more than their share in taxes. According to Citizens for Tax Justice, last year the infamous “Top One Percent” earned 21.0 percent of all income but paid 21.6 percent of all taxes. Similarly, the top two quintiles paid a greater percentage of total taxes than they took in total income, while for the middle quintile and bottom two quintiles it was reversed, contributing a smaller percentage of total taxes than they made in total income.
The problem is when Republicans warn in apocalyptic terms of earth-shattering consequences upon raising taxes on billionaires. Mitt Romney and Paul Ryan, in particular, would seemingly do anything to please their rich friends who fund their campaigns. (Romney, compared to Obama, has received less than half as large a percentage of campaign funds from so-called “small donors,” according to the Center for Responsive Politics.) The Republican idea that raising taxes on billionaires will tank the economy is not only wrong, but the past two decades have actually proved the opposite. In the 1990s, Bill Clinton raised taxes on billionaires. The economy grew while unemployment dropped. In the 2000s, George W. Bush lowered taxes on billionaires. Economic growth slowed – even decreasing in 2008, which is almost unheard of – while unemployment rose.
The contention that raising taxes on billionaires is “punishing success” is somewhat misleading. If you increase taxes on that group slightly, as President Obama currently proposes doing effective this January, the rich will still be rich. (Contrary to Republican counterarguments, Obama’s tax proposal is indeed mild, raising taxes on the wealthiest by under five percent.) “The American Dream” would not be crushed. The poor could still become rich.
In fact, that often occurs. According to W. Michael Cox, former chief economist at the Federal Reserve Bank of Dallas, “86 percent of those in the lowest 20 percent of income earners in 1979 had moved to a higher grouping by 1988. Moreover, 66 percent reached the middle tier or above, with almost 15 percent making it all the way to the top fifth of income earners.” Old numbers, but a trend doubtless present throughout modern American history. Poor people with skill and determination would still try to become rich, even if the rich are taxed more. Keep in mind: in most countries, the poor can never become rich.
The truth is, we should neither demonize the wealthy as the Occupy crowd and some Democrats do, nor should we exalt them on a pedestal as Republicans do. The truth resides somewhere in between. Increasing their taxes should not be off the table, especially with our large deficit. At the same time, the rich help the economy greatly.
Just look at Foxwoods for proof.