For decades, the share of national income held by the top 1% in the United States has soared. Income inequality, which former U.S. President Barack Obama declared “the defining challenge of our time,” has become a major issue in U.S. politics, with both Republicans and Democrats proposing higher taxes on the rich.
The idea, peddled by nationalists and progressives, that the economic system is rigged against ordinary workers and households has also fanned the flames of populism. Some even argue that economic inequality threatens democracy.
And yet, the belief that income inequality has risen sharply may be wrong. New research by Gerald Auten of the U.S. Treasury Department and David Splinter of the congressional Joint Committee on Taxation finds that the after-tax income share of the top 1% has barely changed since 1962. This stands in stark contrast to the work of Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, which has shaped policy and political debate in recent years: the trio conclude that the income share of the top 1% increased by roughly 55% over the same period.
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The idea, peddled by nationalists and progressives, that the economic system is rigged against ordinary workers and households has also fanned the flames of populism. Some even argue that economic inequality threatens democracy.
And yet, the belief that income inequality has risen sharply may be wrong. New research by Gerald Auten of the U.S. Treasury Department and David Splinter of the congressional Joint Committee on Taxation finds that the after-tax income share of the top 1% has barely changed since 1962. This stands in stark contrast to the work of Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, which has shaped policy and political debate in recent years: the trio conclude that the income share of the top 1% increased by roughly 55% over the same period.
The top 1% of Americans aren't to blame for income inequality
Give the poor and the working class paths to economic opportunity.
www.marketwatch.com