The False Narrative About Income/Wealth Inequality: “Inequality Myths And The Need For Economic Opportunity”
As the prospects for tax reform rev up, the Left is trotting out a succession of false narratives to combat it.
One of those narratives is that it will only help the rich and will feed income inequality.
Among their misleading tactics is to neglect to tell you that 45% of American families pay no federal income tax. Of course, if there is going to be tax relief, by definition, the tax relief will go to those paying federal income taxes.
They also neglect to tell you that the Top 20% pay 95% of all federal income taxes – a rise from 84% in 2015.
Now they are focusing on Income/Wealth Inequality.
Keep this mind:
- Income inequality is not worse today than ever. It was far worse at the end of the 1800’s when Rockefeller and Carnegie were kings and had more wealth than the Top 20 richest people in the world today combined. It was the growing economy, built on their platforms, that created the American Middle Class out of Americans who had no where near the wealth and access to health care and education that poor in America do today;
- Income and wealth inequality is tied to age and education – and of course it is. Those reaching retirement age have more wealth than 20 somethings. Those with advanced degrees tend to have more income and wealth than those that do not;
- Inequality is necessary otherwise there would be no business start ups. Capitalism is based on savings that are invested into businesses. Without some inequality, that couldn’t happen; and as the historian Will Durant would tell us, there can only be equality in a poverty imposed by government, i.e. places like Cuba.
They also fail to tell the truth about the fact that those at the bottom and the top are not static groups – as I pointed out two years ago in this Forbes.com article:
INCOME INEQUALITY MYTHS and the need for Opportunity.
“Among [the] falsities is the notion that those that are doing well, and those that are not, are static groups. In truth, there is much “mobility” between the groups. For instance, a study by economists Andrew Rettenmaier and Donald Deere demonstrated that, towards the end of the last century, with regard to income, of those workers in the lowest 20%, 32% moved up to the next highest 20th percentile within a year and 1% of them moved into the highest 20th percentile. Over a 15-year period, two-thirds had moved to the next highest group. Continuing on that theme, according to a government study, 70% of the population will have experienced at least one year within the top 20th percentile of income.
On the other end of the scale, there is downward mobility. Of those in the top 20th percentile, in one year, 25% of them fell to next lower 20th percentile and two percent of them fell into lowest 20th percentile. Fifteen years later, 61% had dropped from the top.”
Read more, including the what is happening to our nation’s youth under this weaker than it should be economy by clicking here: INCOME INEQUALITY MYTHS and the need for Opportunity.
