Taxes Are The Price We Pay For an EQUAL Society.
Thomas Piketty, the world-famous French economist, has ran the numbers on American income inequality. And, his analysis confirmed what many of us already know – low taxes on the rich have made them much richer, and have left the rest of us trying to catch up.
According to new research presented at the American Economic Association, since 1980, incomes for the top one percent have grown about four times faster than the bottom 90 percent.
After reviewing surveys, national accounts, and other tax data, Piketty and his colleagues found that most of that growth has been driven by capital income.
Before 1990, most of the income gains – even in the top one percent – were the results of higher wages. Because taxes went up along with higher pay, income equality was relatively consistent for decades. But, when those at the top started bringing in more of their income through capital gains, the income gap started to widen.
Previous studies have suggested that low taxes on capital gains income are “by far the largest contributor” to income inequality, and this latest research confirms that suggestion.
For most of us, wages have been relatively stagnant over the last 40 years – increasing by less than one percent per year. Meanwhile, the top ten percent are taking in a larger share of the income than they did in the roaring 1920s, and they've convinced the working folks like us to oppose any increase in the taxes that would help level the playing field.
As Piketty's research shows, our system is rigged to benefit those at the top, and it's so broken that many Americans believe they should oppose the tax policies that would bridge the great wealth divide.
Rich people have every right to make their money off of capital investments, but that doesn't mean they deserve lower tax rates than the people who must work to survive. We can't close the income gap without closing the tax divide, so it's time to make those at the top pay their taxes, just like the rest of us.