[Peace-discuss] Spreading the wealth, from poor to rich...

[C. G. Estabrook]

[From Mort's favorite "elitist academic," Larry Bartels, director of Princeton's 
Center for the Study of Democratic Politics.  --CGE]

For the past thirty years, the United States has been conducting what one 
observer (Samuelson 2001) has called “a massive social experiment” regarding the 
political and social consequences of increasing economic inequality.  The share 
of national income going to families in the bottom 40 percent of the income 
distribution declined by about one-fifth, from 17.4% in 1973 to 13.9% in 2001, 
while the share going to families in the top 5 percent increased by more than 
one-third, from 15.5% to 21.0% (Mishel, Bernstein, and Boushey 2003). 
Meanwhile, the share of income going to the top one-tenth of one percent 
quadrupled between 1970 and 1998, leaving the 13,000 richest families in America 
with almost as much income as the 20 million poorest families (Krugman 2002). 
The economic causes of these trends—technological change? demography? global 
competition?—are a matter of some scholarly controversy.  But the important 
political point is that, whereas most rich democracies have significantly 
mitigated increasing economic inequality through government action, the United 
States has mostly been content to let economic trends take their course, doing 
“less than almost any other rich democracy to limit economic inequality” through 
employment and wage policies, taxes, and transfers (Jencks 2002, 64).

In light of these developments, business writer Robert Samuelson (2001) argued 
that “If Americans couldn’t abide rising inequality, we’d now be demonstrating 
in the streets.”  Instead, quite to the contrary, the past three years have seen 
a massive additional government-engineered transfer of wealth from the lower and 
middle classes to the rich in the form of substantial reductions in federal 
income taxes.  Congress passed, and President Bush signed, two of the largest 
tax cuts in history in 2001 and 2003.  One accounting put the total cost to the 
federal Treasury of those cuts from 2001 through 2013 at $4.6 trillion—more than 
twice the federal government’s total annual budget.  Many of the specific 
provisions of the Bush tax cuts disproportionately benefited wealthy taxpayers, 
including cuts in the top rate, reductions in taxes on dividends and capital 
gains, and a gradual elimination of the estate tax.  As a result, according to 
projections by the Institute on Taxation and Economic Policy, the total federal 
tax burden in 2010 will decline by 25% for the richest one percent of taxpayers 
and by 21% for the next richest four percent, but by only 10% for taxpayers in 
the bottom 95 percent of the income distribution...

[The entire article is at <http://www.princeton.edu/~bartels/homer.pdf>.]