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Income Inequality in the U.S. Is Even Worse Than You've Been Led to Believe

March 6, 2018 in Blogs

By Alex Henderson, AlterNet

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Data show the country is failing its lower and middle-income earners miserably.


The more the ultra-rich prosper, the less they're burdened with taxes, the greater the benefits for society as a whole. If you're familiar with Republican economic theory of the past 40 years, you've probably heard this line of reasoning. In fact, just the opposite is true.

Take it from the world's third richest man, Warren Buffett, who recently noted that between 1982 and 2017, “the wealth of the 400 [richest people in America] increased 29-fold—from $93 billion to $2.7 trillion—while many millions of hardworking citizens remained stuck on an economic treadmill. During this period, the tsunami of wealth didn’t trickle down. It surged upward.”

The reality is the United States is now home to some of the worst income inequality in the developed world, and thanks to the recent passage of the Tax Cuts and Jobs Act, this wealth gap will grow exponentially wider.

Lowering the corporate tax rate from 35 to 21 percent, the GOP’s massive overhaul of U.S. tax law exemplifies trickle-down economics at its worst. Trump supporters insist that corporations will generously share their gains with employees, but according to economist Robert Reich, “almost all the extra money is going into stock buybacks” rather than wage increases. Because the richest 10 percent now own 84 percent of stock shares in the U.S., he emphasizes, this will do little to nothing to improve the prospects of most Americans.

According to the firm Birinyi Associates, a record $170.8 billion worth of buybacks and counting have been announced since the president signed these tax cuts into law. Reich has denounced the legislation for creating greater inequality in a country that is already radically unequal.

In 2017, the World Bank’s Gini index, which measures inequality country by country, …read more

Source: ALTERNET

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