Share It is not surprising that income inequality has been a major topic in the U. Near the end of the Economist published an article claiming that out of any highly developed nation in the world the U. With a host of social ills correlated with high levels of income inequality, it is crucial we figure out how to reduce America's income inequality.
Inequality is just a symptom; the real problem is a constricted mobility for lower and middle income households. Throughout the Obama era, the issue of income inequality has been a central tool of political strategizing. Liberals have used the issue as a sword against conservatives, accusing the latter not only of indifference toward the plight of working Americans but of actually welcoming the widening gulf between rich and poor, as if conservatives want nothing more than to see the wealthy become wealthier, even if it is at the expense of the poor.
At the same time, however, conservatives have often shied away from the issue, perhaps afraid of how the issue might feed the big-government agenda of liberalism. The inequality problem is not the simplistic problem the Left makes it out to be.
But there is a serious underlying problem reflected by the growing income gap in America — a problem that strikes at the heart of the conservative vision of America. And if they are to provide a workable governing vision, conservatives must show their concern for this problem and articulate their solutions to it.
The Widening Income Gap Given the wage stagnation and weak employment gains of recent years, it is not surprising that many economists claim that the gap between rich and poor is at its widest since records began 45 years ago.
This gap widened even throughout the recovery. From toonly the households at the very top of the income ladder saw gains, while families in the bottom 40 percent saw their incomes decline over that period, according to the Federal Reserve. Meanwhile, household incomes in the middle stagnated.
The growing income gap has been driven by the anemic economic growth during the Obama era. This policy led to a surging stock market that in turn substantially increased the wealth of the richest Americans who had significant stock investments. At the same time, it vastly decreased the income received by the elderly who saw declining interest payments on their saving.
While Fed policy did boost profits in the financial markets, it did nothing to combat wage stagnation or the reduced share of wages in gross national income.
A debt-based monetary system has produced a debt-driven economy, which rewards those with the financial acumen and assets to invest in the market, while eroding the earnings of working Americans.
Increased financial sector profits accrue mainly to upper-income recipients, who are relatively few in number, while the decreased share of wages affects the relatively larger number of workers — thus leading to greater income inequality.
The Liberal View of Inequality To Democrats over the past eight years, income inequality lies at the core of what is wrong with America. Consequently, the crisis of income inequality demands and justifies a more active government agenda of redistribution, including higher taxes, higher spending on government entitlements, and higher regulation of business: And the Left has used this call for bigger government to paint themselves as defenders of the working and middle classes, regardless of the fact that a bigger government has not only failed to alleviate the income gap but has widened it.
One way in which Democrats have attempted to reduce income inequality is by raising the minimum wage.
But this is hardly a remedy. So raising the minimum wage is not a great way for lifting up the incomes of the poorest households in America.
The other liberal measure for addressing inequality is to raise taxes on the higher income households. But again, this measure greatly exaggerates what can actually be done. And the bottom 60 percent receive more in government transfer payments than they pay in taxes.
In other words, the U. Indeed, it is not even certain what revenues would be produced by such taxes, since higher income individuals will increasingly shift their money into various tax shelters.
A state-by-state analysis shows that the blue states following liberal policies have bigger income gaps than do red states that follow more conservative, growth-oriented policies. So, at the minimum, redistributionist policies like raising tax rates or the minimum wage fail to achieve greater income equality.
And at worst, such policies actually worsen the inequality by dampening the economic opportunity and mobility needed by lower income individuals. The Conservative Approach to Inequality The conservative approach takes a bottom-up focus, rather than a top-down one.
It seeks to lift up the bottom, rather than to bring down the top. It seeks to maximize the opportunities for the least well-off, through maximizing the income and economic opportunities of the whole society, rather than to simply target the most well-off for what may eventually become punitive taxation, irrespective of how this taxation would affect all the lower brackets.
A policy agenda serving this focus includes increasing upward mobility through education that empowers workers and regulatory and tax reform that sparks job creation and wage growth. Conservatives must also fight crony capitalism, which benefits the politically connected, and orient tax policy to benefit families and the middle class, not just to penalize the rich.
One of the most significant proven restraints on upward mobility, family breakdown, will be discussed in a future essay. Welfare programs that incentivize work have been far more successful in boosting incomes and mobility than simple cash assistance programs. Census Bureau estimates that the earned income tax credit lifted 5.
Conservatives advocate expanding this EITC to childless adults, reducing the marriage penalty by adding a second-earner deduction, and reducing the disincentives to work in other welfare programs. Conservatives also propose reforming the childcare tax credit to make it easier for single mothers to reenter the workforce, get off welfare, and take advantage of opportunities for upward mobility.
Unfortunately, the current welfare system largely serves the goal of providing a social safety net, rather than that of moving people out of poverty.
Although the first goal is necessary for survival, the second goal is vital for achieving upward mobility.When the income gap in America grows, people become less trusting and more unhappy, a new study finds. How the Deck is Stacked: Income Inequality in the U.S.
– Lesson Plan According to studies by the Pew Research Center, the American middle class is shrinking and the gap between high-income and. Here’s a closer look at the current state of income and wealth inequality: the gap in median earnings between high school-educated and college-educated households grew by $28, If these.
Sep 27, · Both presidents aided and abetted the widening income inequality gap which ultimately enriches the top 10%, 1% and% of Americans while sticking it to middle-income .
View Essay - income and wealth caninariojana.com from BUSINESS at University Of Charleston. Is Capitalism a Friend or Foe? 1 The Great Income and Wealth gap in America: Is Capitalism a Friend or Foe? Abby. Find Study Resources. Main Menu; by School; by Subject.
Course Study Guides. by Book. Income inequality Income inequality is about the measurement of people’s household or individual based on their income across the various participants in an economy.
It is also known as the gap between the rich and poor, wealth and poverty, the different of income between populations or .