tax.com: The Rich Get Richer

The Rich Get Richer

David Brunori | Jun. 29, 2010 07:11 AM EDT

The Center on Budget and Policy Priorities released a report over the weekend showing that the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007. The CBPP concluded that the data suggests greater income concentration at the top of the income scale than at any time since 1928. While the recession that began in December 2007 likely reduced the income of the wealthiest Americans substantially and may thereby shrink the income gap between rich and poor households, a similar development that occurred around the bursting of the dot-com bubble and the 2001 recession turned out to be just a speed bump. Incomes at the top more than made up the lost ground from 2003 to 2005. In 1979, when the data begin, the average after-tax incomes of the top 1 percent of households were 7.9 times higher than those of the middle fifth of households. By 2007, top incomes were 23.9 times higher than those of the middle fifth — a more than tripling of the income gap.

The gap between the top 1 percent and the poorest fifth of Americans widened even more sharply. In 1979, the incomes of the top 1 percent were 22.7 times higher than those of the bottom fifth. By 2007, top incomes were 74.6 times higher than those at the bottom — more than tripling the rich-poor gap in 28 years. The gap between the rich and poor continues to grow. I don't know how anyone can think that is good.

Comments (0)

You write, “The gap between the rich and poor continues to grow. I don't know
how anyone can think that is good.” So do you think the gap is bad? And if so
why?

Posted by Daniel W. Durham on Jul. 1, 2010 at 01:59 PM

I'm always amazed at our lack of curiosity about the mechanics of the
income-concentrating and wealth-concentrating machines we live with.

How is it that some of us are permitted to accumulate so much, in a society
whose founding principle is that we are all created equal?

Why do we tolerate structures which funnel our wealth to some of us? Have we
been somehow duped into believing that such structures reflect justice? Has
our education in political economy been so lacking that we aren't even curious
about how it is that we arrived at such large proportions of our aggregate
wealth belonging to a tiny fraction of us? (Political economy is the science
which deals with the natural laws governing the production and distribution of
wealth and services.)

Look to Henry George's writings and speeches for a way to understand.

Posted by LVTfan Wealthandwant on Jul. 5, 2010 at 10:05 PM

I hate to sound like a nut but I like the idea of a consumption based taxing
structure. No tax returns means no avoiding taxes. You spend money means
you're paying your fair share not matter the amount. Let's quit spending a
large percentage (who knows what the # is? ) of our tax dollars in just
collecting it. Call me crazy.

Posted by Bob Miller on Jul. 7, 2010 at 04:23 AM

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