Christopher Ingraham at the Washington Post reports, U.S. lawmakers are redistributing income from the poor to the rich, according to massive new study:
Back in 1980, the bottom 50 percent of wage-earners in the United States earned about 21 percent of all income in the country — nearly twice as much as the share of income (11 percent) earned by the top 1 percent of Americans.
But today, according to a massive new study on global inequality, those numbers have nearly reversed: The bottom 50 percent take in only 13 percent of the income pie, while the top 1 percent grab over 20 percent of the country’s income.
Since 1980, in other words, the U.S. economy has transferred eight points of national income from the bottom 50 percent to the top 1 percent.
That trend is even more remarkable when you set it against comparable numbers for wealthy nations in Western Europe. There, the bottom 50 percent earn nearly 22 percent of the income in those economies, while the top 1 percent take in just over 12 percent of the money.
The income situation in Western Europe today, in other words, is similar to how things were in the United States nearly 40 years ago.
The 2018 World Inequality Report, written by a team of leading international economists including Thomas Piketty of “Capital in the Twenty-First Century” fame, finds that the rise of income inequality in the United States is “largely due to massive educational inequalities, combined with a tax system that grew less progressive despite a surge in top labor compensation since the 1980s, and in top capital incomes in the 2000s.”
Since the 1970s the price of higher education has skyrocketed, putting the price of tuition out of reach for many low-income students. Over the same time, the tax code became more generous to the wealthiest Americans — the top marginal income-tax rate fell from 70 percent in 1980 to 39.6 percent in 2017, taxes on capital gains fell by more than half from the mid-1970s to the mid-2000s, and the estate tax has fallen as well.
Those changes have made it easier for high-income Americans to grab more and more of the income pie in any given year.