WaPo Editorial: U.S. income inequality doesn't have to be the worst in the industrialized world

[Celerity]

https://www.washingtonpost.com/opinions/us-income-inequality-doesnt-have-to-be-the-worst-in-the-industrialized-world/2019/07/28/61ed1e0a-afc0-11e9-8e77-03b30bc29f64_story.html?utm_term=.1b7ceffe686e

INCOME INEQUALITY, and the impact of President Trump’s policies on it, looms as a major issue in the 2020 presidential campaign. Fortunately, the nonpartisan Congressional Budget Office has just issued a report on U.S. income inequality through the end of 2016 — that is, about the time Mr. Trump assumed the presidency. Spoiler alert: The situation was improving slightly after eight years of Barack Obama’s presidency but might well have headed in the opposite direction since.

The CBO’s bottom line is that the nation’s progressive income tax system and means-tested benefit programs such as Medicaid (expanded via Obamacare) and nutritional assistance significantly counteracted the increasingly upwardly skewed distribution of income that the market alone delivered, via wages, salaries and investment earnings, between 1978 and 2016. Consequently, the U.S. Gini coefficient — a broad measure of income inequality in which 1.0 is the highest inequality score and 0.0 the lowest — stood at 0.42 at the end of 2016, after accounting for taxes and transfer payments. This was the highest Gini coefficient of any industrial democracy; it was slightly lower, though, than at the end of President George W. Bush’s term. Perhaps most important, the trend was downward, implying decreasing inequality as Mr. Obama left office.

The CBO has not yet been able to measure what has happened in the past two years. However, all signs point to regression. The biggest policy change in that interval — the Trump tax cuts, which took effect on Jan. 1, 2018 — tilted the distribution of income after taxes upward. Some 27.2 percent of the benefits from changes to individual taxation in that law accrue to the top 1 percent of households, according to the Center on Budget and Policy Priorities.

As for transfers to the poor, the most aggressive efforts by the Trump administration and the Republican Congress to cut (or, in the case of Obamacare, eliminate) them legislatively have indeed been prevented. On July 23, though, the White House proposed a regulatory change, through executive action, that would remove 3.1 million of the 40 million people currently on the rolls of Supplemental Nutrition Assistance Program, eliminating about $2.5?billion a year in transfer payments. So the administration is not finished looking for ways to shrink federal programs that transfer money downward in the distributional scale.

snip

[empedocles]

1. Campaign finance in US just may have something to with this sad status

[Roy Rolling]

2. Two things

Fairness Doctrine

Citizens United

They are what turbocharge the race to the bottom.

[Cosmocat]

3. Key factors

for sure ...

The epidemic of flat stupidity of the American people generally is the core issue.

Article in the local paper about the food stamp cuts.

Obama, Socialism, free stuff ...

That SO many virulently cheer it on, or babble about "both parties are the same" is overwhelming.

We are pushing mud ...

[zentrum]

4. What?!!

The Fairness Doctrine is what insured we'd get less partisanship and more straight forward, honest reporting in our news. Established in 1949.

The Fairness Doctrine was undone by two Presidents. Ronald Reagan and Bill Clinton.

Clinton's Telecommunications Act turbo-charged right wing media.

To this day, I"ll never understand why he signed it. Never.

But, in any event, it was the undoing of the Fairness Doctrine that gave us propaganda for news.

At least, that's my understanding.

[ProfessorPlum]

7. I'm positive that is what Roy meant

[zentrum]

8. You're probably right.

[Farmer-Rick]

5. I think the upward movement of capital in our society is due to capitalism

It's kind of built into the economic system. Ways to mitigate the unequal and destructive nature of capitalism were well established and in place before Nixon.

After Nixon most legislation and policies focused on allowing capitalist to plunder our nation and to prey on people with less skill and resources to protect themselves.

Deregulation, the destruction of unions, "free" markets, globalization, the movement of manufactoring to foreign shores incentiviced with tax cuts, tuition and student loan huge cost increases, health care insurance and allowing for profit medical care, reduction of taxes for corporations and the richest Americans, contracting out of government services and turning punishment of minor crimes and rule violations into profit centers for the rich. All of these things Only helped one class of people in the United States and it was the filthy rich.

[Celerity]

6. +1

[zentrum]

9. Yes, yes, yes and also----yes.