Rising Inequality and Taxes

New York Times columnist Frank Rich writes today of the continuing increase in income inequality. In 1976 the richest 1% of Americans accounted for 9% of the country's total pre-tax income, but by 2007 it was 23.5%. In the 2000s when the richest 1%'s income increased 10% each year, median incomes for families declined and poverty rates increased. Rich quotes a new study that claims the reason for the increasing share of wealth going to the the top 1% is that tax laws and policies have been consistently rewritten to favor them. Both Democrats and Republicans have legislatively contributed to this increasing inequality in hopes of getting campaign contributions from the superrich.


Currently, it is the Republicans who absolutely demand that the expiring Bush era tax cuts for the superrich continue.They say the cuts for millionaires are needed so that small businesses have the funds they need to continue to create jobs. But according to the Tax Policy Center only 2% of small business owners would have increased taxes. If this is true, the argument that small businesses need this tax cut is as phony as the earlier Republican one that weapons of mass destruction were stockpiled in Iraq.

So is there any argument to support tax cuts for the superrich? Often Republicans say that these are the people who create jobs. But these wealthy people now are sitting on more than a trillion dollars that they are not investing to make new jobs. And during the last 10 years when they have benefited from the Bush tax cuts there has been virtually the lowest rate of job creation in the last 60 years. Why should we think a continuation of the Bush tax cuts would make a difference?

Why do the Republicans always - since the 1850s - support the wealthy? There are not enough wealthy voters who directly benefit from these policies to win an election, so they win because they convince the non-wealthy to vote for their candidates. With nearly no growth in jobs nor in personal income over the last decade why would the poor and middle class and the rich, but not superrich, support Republicans? It can't be for economic reasons.