Income Inequality: Century Old Political Scam (1)

First in a series.

President Obama, Hillary Clinton, media commentators, and misguided Republicans blame income inequality for middle class hardship and a host of other problems, even the riots in Ferguson and Baltimore.Obama inequality tweet  Mrs. Clinton’s campaign will allege that whoever becomes the Republican nominee caused or supports inequality and is therefore wicked and dishonorable

The President’s tweet needs context. “Fighting income inequality” is merely the current title of  an old political tactic of the progressive left, telling voters who lack sufficient income to blame their distress on people with higher incomes.

Certainly Barack Obama has been a devotee of attracting votes by generating the base emotions of bitterness and resentment toward wealthier people since his community organizing days, before the term “fighting  income inequality” became stylish.How much tax do the rich pay?

In fact, “inequality” is really just a buzz word umbrella for a batch of election campaign themes – and lies – progressives have used for a century.  First among them is the notion that high income people pay an insignificant share of total income taxes.  For example, Stanley Greenberg who provides polling and strategy recommendations to Democrats recently wrote that”

the American people are ready to tax the richest and disrupt that group’s special deal with government

New York City Mayor Bill de Blasio was asked why he was waiting and had not yet endorsed his old friend Hillary Clinton to be the Democrats’ Presidential nominee:

I think progressives all over the country, I think everyday Americans are demanding that their candidates—the President and every other level—really say that we have a plan that we can believe in for addressing income inequality…It has to include the willingness to tax the wealthy… [emphasis added]

Phrases like “willingness to” or “ready to” tax the wealthy are designed to nudge the naive and uninformed toward the perception that wealthy people pay an miniscule share of total taxes or even no taxes at all.  Because these assertions are heard so often most people perceive the wealthy as shouldering a far smaller share of the total  tax burden than they actually do.

The pie charts above present IRS data to bring the tax burden of high income people into perspective.  Because of America’s steeply progressive tax system the top 4% pay more than half – 56% – of all the income tax revenue the IRS collects.  The data is from 2012, the last year for which the IRS has completed it’s reporting.  The top two tax brackets were increased as of 2013.  Thus, when the 2013 report is published it will probably show an even larger share paid by the very few at the top.

By the way, the bottom 62% of taxpayers, those earning $50,000 or less, pay 6.4% of all the income tax revenue the government collects.

It’s important to note that while they claim to be horrified by income inequality Democrats and progressives never propose laws to prevent people from earning high incomes.  Why not? Two reasons:

  • Most voters, even those who support progressives, admire and/or feel an affinity or kinship with some high income people such as Hollywood celebrities and pro athletes.
  • The Massive Government machine progressive Democrats have manufactured has a rapacious appetite.  As the charts above show the top 4% feed the machine more than half of all income tax revenue.  So, while they bitterly complain about the rich earning “too much” Democrats desperately need the cash those rich folks provide to fund their multitudinous, government “programs.”

Democrats routinely blame high incomes earned by some people for less than sufficient incomes earned by other people.  But there is no cause-effect connection.  Complaining about “income inequality is simply the latest version of a decades old con progressives and Democrats use to attract the votes of people whose income is insufficient to support their needs or the lifestyle they desire.

The next post in this series will explore the value high income earners add to the American economy including making the existence of a middle class possible.

1 Comment so far

  1. Jacob on July 1st, 2015

    Great blog. How much longer till #2 in the series?