[One note here at the outset: the wealth gap multipliers are not really “hidden pieces” as my headline below implies, but they are pieces that most people don’t think about when they speak of income disparities and tax policy. But they are pieces you can’t separate from the whole picture of economic disparities, and are arguably just as important a topic of discussion as income taxes. Bernie Sanders speaks about it, but unfortunately his bombast tends to cause independent voters—the ones who increasingly make the differences in elections—to tune out.]
Hidden Pieces of the Tax and Wealth Puzzle: Wealth and Wealth Gap Multipliers
Regardless of specific amounts, even at comparable incomes (say, within one order of magnitude, $75,000 to $150,000), those with wealth behind them are many times more secure than those with little wealth. (Note that I plucked these numbers out of national averages; of course incomes and expenses are far greater in many major cities and upscale suburbs. Incomes are far lower among the poor and much of the lower middle class, of whom to speak of their nonexistent “wealth” is a bitter irony.)
To state the obvious: the wealthy have something to fall back on in hard times and personal emergencies.
Moreover, their wealth expands through wealth multipliers.
I have not looked at exact disparities in wealth in the U.S. for 20 years, since it was bad then and has obviously been getting worse. The Great Recession of 2007-2009 amplified the wealth disparity, and it hasn’t improved since then. (For a good idea of where it’s all going, read Plutocrats by Chrystia Freeland. )
Multiplier Number One, Race: note that the hardest hit are people of color, where the wealth gap is worse than for whites, and widening: see CNN analysis at Racial wealth gap in 2016
Continue reading “How to Cripple an Economy, Part 3: Wealth Gap Multipliers”
