Inequality is a product of government policy - by: David Cay Johnston
Inequality Rising — All Thanks To Government Policies
May 31st, 2013 10:32 am
David Cay Johnston
A revealing new examination of the top 1 percent in a variety of countries brings into focus how the American government’s tax, union bargaining, inheritance and other rules widen the growing divide between those at the top and everyone else:
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Saez has shown that in the two years of recovery for which we have data, 2009 to 2011, 121 percent of the income gains went to the top 1 percent. That means the 99 percent saw its share of the national income pie sliced more thinly.
These gains were so highly concentrated that 40 percent of all the increased income in our nation of 314 million went to fewer than 16,000 households.
On the rise of CEO and other executive pay, while that of most workers is flat to falling, the authors find that “tax cuts may have led managerial energies to be diverted to increasing their remuneration at the expense of enterprise growth and employment.”
In plain English, that means some executives are lining their own pockets at the expense of the enterprises they run. In a country where they can keep most of their increased pay because of tax rate cuts, executives have an incentive to focus on their wealth, while if tax rates were at pre-Reagan levels, pushing for much higher pay results in much less personal after-tax gain.
Much more:
http://www.nationalmemo.com/inequality-rising-all-thanks-to-government-policies/2/
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