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The rich get richer, the poor get poorer
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Question:Liberals and poor people sometimes say 'The rich get richer, the poor get poorer'. Is it true? It seems that a blue collar worker today is having a lot better life than at my father's time, 30 years ago?
Answer:Over the past 30 years, the inflation-adjusted wage for the average American has not risen. But the rich are getting much richer. The top 1% of Americans has doubled their inflation-adjusted wealth. Throughout history, this type of scenario has ended badly. (Posted at http://news.morningstar.com/articlenet/article.aspx?id=196870&pgid=wwhome1a in June 2007)
It is also not true that today people have a better life than people in a comparable position 30 years ago. It is true that we have more amenities thanks to technology than we had 30 years ago- just think of mobile phones. Mobile phones as of 2007 are loaded with features that would make gadgets from a 1975 James Bond movie look weak.
But: Many families only can pay their bills today with both adults working. Double income has become the norm. That was not the case in 1975. Especially women/ mothers suffer from this, as they often have 2 jobs - taking care of the house/ children and their 'regular' job.
The gap between rich and poor in the USA is certainly widening. This is not some socialist propaganda, but a fact. Taxation plays a big role in it. Why are capital gains taxed lower than earned income? As of 2007, a millionaire pays only 15% capital gains tax on earnings from the stock market (assuming he held the position at least one year) while someone working for his money pays up to 35%. So earning money on the stock market is supported by the government while earning money through work is punished. Well, both are punished with taxes, but one is punished more severely :-)