Economic Inequality

In America there is a case of Economic equality. Examples of this gap between the rich and the poor and can be proved though many individual studies. Evidence shows that a study by the Economic Policy Institute found that the top 1% earned ten times more than the rest at the start of the period than the bottom 90% and at the end of the period, they earned as much as 20 times more. For the even wealthier 0.1% the gain rose from 20 times the earnings of the lower 90% to almost 80-fold. (Economist, Jan 20, 2011)This proves that the rich are getting richer and in a shorter amount of time than the poor or bottom 90% which is one a huge consequence of Economic inequality. This was not the only case. The Urban-Brookings center also used statistics from the Congressional Budget Office to notice the same trend. The findings show that the average effective income tax rate (percent paid after deductions and credits) for the richest 1% began at 21.8% in the year 1979, and increased to 24.2% in 1996 but by 2007 it had dropped to 19%. (Politifact June 24, 2011). A consequence of this inequality is that the taxes which are paid by wealthy Americans are due to the overly progressive tax structure and growing programs for the rest of the non-taxpaying Americans. (Wall Street Journal September 26, 2011). A real life example a story told by Warren Buffet who is behind Bill gates as the richest men in America. Buffet complained that the tax system is so corrupt that Buffet paid a smaller share of his income than his secretary.  There are many arguable routes on how to address economic equality. An example could be shifting the power between workers and employers so that income goes more towards wages than profits. Another strategy could be strengthening the middle class, so that the gap between the rich and poor will be less pronounced and more leveled out. Improving the tax system is another way to approach this issue.  A Progressive tax system which taxes more on the richer class will help close the huge gap between the rich and the poor.  Nick Hanauer's is firmly against taxing less on "Job Creators" because he believes that the rich shouldn't be titled as such. In his ted talk he speaks about he is in the wealthy class but he is in no way a "Job Creator." In fact he stated “calling ourselves job creators isn’t just inaccurate, it’s disingenuous.” Hanauer argues “[O]ur current policies are … upside down. When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer.” Hanauer’s belief to address this economic in equality is to tax the rich more.