Income inequality is bad. Wealth inequality is worse. More than half (55.6 percent) of all Nevadans are financially insecure, according to a new report by Prosperity Now. That means that Nevada’s households do not have enough money in savings to subsist at the poverty level for 3 months in the absence of income.
Wealth is important because it equals opportunity. Wealth is the down payment on your first home. It’s having enough saved to send your kids to college without tapping out your retirement fund. It’s knowing that your bank account can help you weather a rainy day. Whether we have a lot or a little, wealth is about opportunity — and it is increasingly distributed unfairly.
The wealthiest 0.1 percent of Americans today own about as much wealth as the bottom 90 percent of Americans combined. Our “upside-down” federal tax system perpetuates the problem. A typical millionaire in the top 0.1 percent gets tens of thousands of dollars every year from tax deductions, credits, deferrals and other lopsided tax programs. A typical working family gets little or nothing at all. These tax programs could be expanding financial security, boosting retirement security, or increasing home ownership and college savings for working class families. Instead, they are helping the richest households get even richer.
This may seem like an issue that’s just too big to manage. But that’s not the case. Nevada has some homegrown ideas that have worked here and could work for the rest of the country. This is especially true in the area of college savings. Here’s what Nevada did: We started College Kickstart. Now every child entering a public school kindergarten in the state gets a college savings account with a $50 initial deposit. And every working family gets additional support to add to their own savings. These accounts grow with accruing interest and deposits right up until the child is college-ready. This is how we start reversing wealth inequality in this country.
This isn’t just pie-in-the-sky thinking. Research shows that low- and moderate-income students with less than $500 in an account are three times more likely to enroll in college and four times more likely to graduate. And if we accomplish this by turning those upside down tax programs right-side up, it would also mean an historic decrease in inequality.
Nevadans can’t do this on our own. The nationwide problems of growing inequality and stagnating opportunity demand nationwide solutions. But Nevada can point the way with our own homegrown successes. I hope the presidential wannabes took a careful look at what we’ve accomplished here. I hope they tell us how they intend to supercharge College Kickstart and take it nationwide. I hope they’ll take a stand to turn these pro-inequality, anti-opportunity tax programs right-side up.
Nancy E. Brown is President of Opportunity Alliance Nevada.
Source: Reno Gazette-Journal
