Democrats routinely push the theme of income inequality as a means of driving votes. But is income inequality really as dire as the left proclaims?
Reason magazine took on that question, starting with a Dec., 2013 study by the Congressional Budget office, looking “at historical tax burdens borne by Americans at all income levels.” An economist from a think tank whose employees mostly donate to Democrats analyzed the data:
“Among other things, the CBO examined after-tax income trends for each quintile of American households since 1979, including not just wages but benefits and transfer payments. Using the CBO data, the Brookings Institution economist Gary Burtless has shown that from 1979 to 2010, the last year for which data are available, the bottom fifth’s after-tax income in constant dollars rose by 49 percent. The incomes of households in the second lowest, middle, and fourth quintiles increased by 37 percent, 36 percent, and 45 percent respectively. The poor and the middle class got richer.”
The rich got richer as well.
The Reason article, “Obama: Wrong About Income Inequality”*, provides a more nuanced analysis than that excerpt, but anyone interested in the ongoing progressive memes pushing income inequality—a variation on Democrats’ perpetual class warfare tactics—should read the article.
The essayist, Ronald Bailey, also explains the method proponents of income-inequality-politics use, and he cites a Harvard economist who, Bailey said, believes “over-relying on this measure is a mistake.”
As is the case in any free society, mobility is there if you are smart enough and tough enough to journey towards it.
Reason’s blog also has an interesting post about income inequality and mobility.
Ironically, four of the top cities referenced in the blog’s analysis of high income inequality in cities are Democrat strongholds.
The print article uses data from Brookings, the CBO, and the Office of Tax Analysis for the U.S. Treasury. None, rest assured, are bastions of conservative philosophy.
Bottom line—those cute little graphic memes put out by prog groups and distributed by hard leftist groups like Media Matters are aimed at selling you an idea that may not be grounded in reality. Same goes for groups that aren’t hard left.
Bear in mind any meme is a snapshot removed from context.
Few politicians talk much about inflation, and how excessive regulation and hard left energy policy have contributed to driving up the cost of everything we need to survive on a daily basis. Inflation isn’t talked about much right now at all. You can have some fun with the inflation calculator on the Bureau of Labor Statistics website—it’s likely that whatever figures you plug into it will make you groan when you see the results.
I used a sample sum of $100, with the year 1970 as my first calculation—that sum would have the buying power of $602.88 in 2014. If I plug in the same $100 for 1990, that amount has a buying power of $178.97 today.
Excessive government really will cost you—that’s a meme in full context you can count on, rich or poor.
(Commentary by Kay B. Day/March 11, 2014)
*See the April, 2014 print edition of Reason magazine for the article “Obama: Wrong About Income Inequality” by Ronald Bailey.