I have been looking into income inequality as of late. I actually posted about it earlier, and you can find it here. And the information I’ve found now has definitely surprised me. For example, one news article I read, “The Real Causes of Income Inequality” from the Wall Street Journal, cited a statistic that “the United States doesn’t tax its poor as much as in European countries, and . . . if the U.S. spent and taxed like France and Sweden, it would hardly affect the top 10%, who would pay about what they pay now, but the bottom 90% would see their taxes double.”
This is the kind of stuff I never would have expected to discover. A couple articles shared one point that I didn’t know I’d find beforehand: there was a dramatic increase in reported income inequality in the ’80s, but this was the result of rich people like doctors or lawyers incorporating to change the way their income was taxed. One article, “Inequality and Taxes”, stated that “between 1979 and 1988 is that marginal tax rates on individuals stopped being higher than tax rates on corporations” and that “pre-1981…many doctors, lawyers and consultants incorporated to escape the high personal tax rate.” When people stopped this practice, “shifting income from the corporate tax to the individual tax created an illusory increase in top incomes.” In other words, income inequality never took off at all.
Seeing how income inequality was a hot-topic this election cycle, I wish that more nontraditional viewpoints like these became known to most people, instead of, say, whether or not Donald Trump eats KFC with a knife-and-fork or drinks Diet Coke.
This has been my process researching income inequality. I took this topic and did flat searches and have read the basic articles condemning successful people. Then I did searches about their specific points. As I’ve read these reports and news articles, my view has drastically shifted. Partway through this piece, I hit a database and the articles I started reading not only took blame from the successful, but placed it in the hands of the government. It turned into a matter of policy: what the government does and how it handles our taxes holds the biggest effect on inequality, outside of the economy.
Did you know that recessions and depressions are the greatest reducing factor for inequality? I didn’t. In all honesty, I came into this topic looking to justify my biases and am disappointed to say that they’ve been cast away. If you hold yourself as something of an armchair expert on anything subjective, I implore you to do the research. Step up and leave the armchair. I’m working on mine and loving it.