From the Heritage Foundation, Two Americas: One Rich, One Poor? Understanding Income Inequality in the United States, August 24, 2004
Class warfare has always been a mainstay of liberal politics. Politicians frequently depict the United States as a nation starkly divided between the rich and poor. For example, vice presidential candidate John Edwards decries "two Americas...one privileged, the other burdened...one America that does the work, another that reaps the reward. One America that pays the taxes, another America that gets the tax breaks."
The Census income distribution figures are the foundation of most class-warfare rhetoric. On the surface, these figures show a high level of inequality: The top fifth of households have $14.30 of income for every $1.00 at the bottom.
However, these figures are flawed by the exclusion of taxes and social safety net spending and by the fact that the "fifths" do not contain equal numbers of people. Adjustment for these factors radically alters the picture of income distribution: The top fifth of the population has $4.21 of income for every $1.00 at the bottom.
The remaining inequality in society is heavily influenced by the lack of work at the bottom. If working-age adults in the lower quintiles worked as much as their higher-income counterparts, the income disparity of the top to the bottom quintiles would fall to $2.91 to $1.00.
Still, the top fifth of U.S. households (with incomes above $84,000) remain perennial targets of class-warfare enmity. These families, however, perform a third of all labor in the economy. They contain the best educated and most productive workers, and they provide a disproportionate share of the investment needed to create jobs and spur economic growth. Nearly all are married-couple families, many with two or more earners. Far from shirking the tax burden, these families pay 82.5 percent of total federal income taxes and two-thirds of federal taxes overall. By contrast, the bottom quintile pays 1.1 percent of total federal taxes.
In one sense, John Edwards is correct: There is one America that works a lot and pays a lot in taxes, and there is another America that works less and pays little. However, the reality is the opposite of what Edwards suggests. It is the higher-income families who work a lot and pay nearly all the taxes. Raising taxes even higher on hard-working families would be unfair and, by reducing future investments, would reduce economic growth, harming all Americans in the long run.
2 comments:
You are wrong, the rich get richer
and the poor get poorer. And everyone knows the poor work harder
and longer and die pregnant in farm fields from heat stroke, and that's just one example. They work harder cleaning your dirty house. The rich go to dinner and try to figure out a way to continue to to make slaves out of the poor.
All the evidence I've seen proves that the poor in America are richer than the rich were 200 years ago. Nobody is poor in America. The poor have gotten richer in America.
All the evidence I've seen -- beginning decades ago with Banfield's Unheavenly City -- indicates that those who remain poor refuse to play by the rules. You can give me "just one example" of a working poor person who doesn't make it, or whose children don't make it, but that exception proves the statistical trend.
For the better part of a decade I rented a 12-room house and opened it up to the homeless. I served dinner to thousands, and gave shelter to hundreds. I worked hard cleaning their dirty house. It was one of the most wonderful and rewarding times of my life.
Sure, there are evil rich people who abuse their workers and cheat the poor. But most of the rich go to dinner to figure out how to keep employing as many people as they can. Most of those that don't care about the poor might be persuaded to do so, but they won't be by stereotypes and slander.
Post a Comment