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Income Inequality Is Only Part of the Problem

May 3, 2014

Much discussion has been taking place of late related to income inequality in our society and the myriad of problems it creates for so many of us and the overall economy. Another, related aspect of economic inequality that pervades our society is the vast inequality of wealth, and the way in which our means of inheritance tends to further exacerbate income inequality and entrench it for generations to come.

The emphasis this society places on money and its use to obtain not only the means for survival, but also the means for personal advancement, has resulted in the fact that having it in sufficient amounts becomes a determining factor in the actual opportunity for the achievement of the old goals of life, liberty and the pursuit of happiness for most of us. Quality health care, education, even food, shelter and the physical environment one lives in are often dependent upon the economic circumstances one grows up in. Being born into wealth, however and whenever it was obtained, goes a long way towards determining what obstacles face one in trying to compete with others or simply to meet one’s own goals for survival, comfort or personal fulfillment.

Those at the top of the economic pyramid pride themselves on their hard work and abilities, often without acknowledging the role that pure luck may have played in their attainment of that status. For every Sam Walton or Bill Gates or Steve Jobs who may have pulled themselves up by their bootstraps, defying all odds and achieving great monetary wealth and fame, how many of our wealthy actually started out with a leg up on the competition, so to speak? To the best of my knowledge, we do not select our parents and their economic wherewithal, but it certainly has a great impact on our upbringing and the opportunities as well as the obstacles we will face in making our way in the world.

Sam Walton may be able to claim to have earned the vast fortune he was able to accumulate in founding and building the Walmart empire. Can those who ended up inheriting that vast wealth lay the same claim to it, just by being his descendants? While arguments may be made for differences in income based on differences in societal contributions by different people (not that all of us will agree on what they should be), why should that disparity be perpetuated ad infinitum for the benefit of succeeding generations of people not contributing to the same extent? On the other hand, why must so many continue to have to swim against a much swifter stream to catch up with our more fortunate peers merely because of circumstances beyond our control?

Any effort to alleviate economic inequality cannot succeed if it aims solely to lessen the income disparity between the haves and the have-nots in our society. While the current system that allows for corporate CEO’s to be paid (not earn) hundreds of times what the lowest paid workers in their firms are paid is unjust in the extreme, the situation is made worse by the fact that they are allowed – even encouraged – to use their wealth in order to benefit further at the expense of others. This is known as the current state of affairs for politics in the USA. The recent Supreme Court rulings firmly entrenching the ability of the wealthy to spend unlimited amounts of money to influence our government are cases in point.

The tax code in this country in particular has enabled the redistribution of money and wealth from the lower and middle levels of the economic structure to the upper levels at a rapid pace. Income earned by hedge fund operators or venture capitalists in the form of carried interest and capital gains that are taxed at a rate far lower than the income earned by their secretaries, drivers and other subordinates, which makes it that much easier for them to amass and retain vast fortunes the rest of us could never hope to gain, short of winning Powerball. Did most high paid corporate executives with seven figure salaries start out dirt poor and pull themselves up by their bootstraps, or like Mitt Romney and the Walton clan, start out in families that were already part of the 1%? I don’t know the exact figures, but I would wager that more started out closer to the top than the bottom of the economic pyramid.

Better health care, education, nutrition and even personal safety are more plentiful for those born to wealth than those born in poverty. The current attempts by those on the right to protect existing wealth and privilege by curtailing any and all social programs designed to try to make up for historical lack of opportunity among the less fortunate among us – including affirmative action, quality health care, financial aid for higher education, and full funding for public education – all should be seen as attempts to roll back the clock and make our society one of permanent high inequality, with wealth and power centered in a lucky few. Pretending that the need for such programs no longer exists because we no longer legally own people as slaves, women can vote and  anyone who is qualified may be admitted to Harvard or Stanford (as long as they don’t mind being in debt for life) is self-justifying sophistry aimed at allowing the social and economic elites to feel superior to and look down on the rest of us.

A wealthy CEO, celebrity, sports start or heir does not often deserve the fame and fortune they possess, any more than the poor deserve their poverty. The system that values the abilities of some so much that they are allowed to flourish in luxury while forcing others to languish in poverty with little prospect of improvement needs improvement. Justice and fairness are sorely lacking in 21st Century American capitalist society. Those who have been benefiting most from living under this society need to pay a greater share in the maintenance and upkeep of it. The way this is accomplished is through the tax code, social programs and government in general. Not everything is or should be accomplished with a monetary profit in mind.

The claim that so many people pay little or no federal income tax ignores the fact that lower income people actually often pay a higher percentage of their incomes in the form of more regressive payroll, state, local and sales taxes, so their overall tax burden is actually greater than for those at the top of the income scale. It also fails to account for how much of the true incomes of the very wealthy are taxed at a lower rate or not at all. Starting to make the total tax burden on each of us more equitable would help to make opportunity more equal, as long as money remains the main criteria by which we dispense privilege in this society. Starting to tax wealth in an equitable manner, instead of merely looking at income, is also necessary. Wealth has been redistributed in this country for a long time – from those at the bottom to those at the top. Redistributing it back in the other direction is not theft, as the libertarians and political apologists for the wealthy refer to it. This redistribution seeks to institute social justice that has robbed so many of the ability and opportunity to reach their full potential,

Affirmative action, equal opportunity, pay equity and other programs designed to negate the effects of long-term under-privilege based on gender, race, ethnic group, economic status, sexual preference or other arbitrary criteria are still appropriate and necessary and will remain so as long as people suffer at the hands of others in our society. The biggest freeloaders are often not the poor in this nation, but some of those with the largest bank accounts. Not all of the wealthy are evil, nor all the poor saints, but we should be doing less to enable the excesses of the former while easing the tribulations of the latter.

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  1. Very well written even flavored with a far left flavor. Example, for every Romney there are two or three Kennedys. For every Walton there are many,many Liberal counterparts-Soros,Zuckerberg,Bloomberg,Steyer that more than counter the far right. I believe the issue is more rooted in the elite class our Government has created within its own frame work. My concerns are more with the rich political elites rather than the corporations that lobby them. This is not a left/right issue as class warfare proponents perpetuate, rather a political royalty class /common American issue.
    This is just my observation-not a criticism of your views.


    Liked by 2 people

  2. Reblogged this on seanaldenfitzgerald and commented:
    Nicely written.


  3. We have to address the Class stereotypes and biases that breed income inequality. Our class system is a relic of the feudal era.


  4. Carroll Hebron permalink



  5. Patti permalink

    This entire diatribe can be distilled into two words, jealousy and greed. Why are you or anyone else entitled to the fruits of another person’s labor? Those fruits belong to the laborer to do with as he or she wishes. They have already been taxed therefore the government has no claim to any of it.


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