A wealth gap? No, it’s a stupid gap
A recent report from the Center on Budget and Policy Priorities shows that the after tax income of the top 1% of earners has more than doubled between 1979 and 2007. (story here from TaxProf)
The gaps in after-tax income between the richest 1% of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007 (the period for which these data are available), according to data the Congressional Budget Office (CBO) issued last week. Taken together with prior research, the new data suggest greater income concentration at the top of the income scale than at any time since 1928.
A look at the graphical data tells the story:
The survey does, indeed, show, as fellow tax bloggers Jim Maule and Linda Beale are sure to point out, that the rich have gotten richer. What it does not show, and what is not to be automatically inferred from it, is that the poor and the middle-class have gotten poorer.
Of course, I fully expect the tax-the-rich types to suggest that very thing. But by doing so they only betray one of their many faulty premises: Namely, that wealth, like energy, is finite and an increase in one individual’s wealth is always be matched by a commensurate decrease in another individual’s wealth.
The best part of this post comes in the comments section:
A reason for the “wealth or income gap”: Smart people keep on doing things that are smart and make them money while stupid people keep on doing things that are stupid and keep them from achieving.
People who get an education, stay off of drugs, apply themselves, and save and wisely invest their earnings do a lot better than people who drop out of school, become substance abusers, and buy fancy cars and houses that they can’t afford, only to lose them.
We don’t have an income gap. We have a stupid gap. Guess which group voted for Obama.