Friday, September 30, 2011

The Great Wage Disparity

One of my prior posts talked about how between 1963 and now the top tax rate went of 91% for income's over three-million dollars (in todays dollar valuation) to 35% today, but other changes and tax loop holes for the wealth bring their effective tax rate to 17%, far less than their employees pay.

Another cause for the great wealth disparity of today can be seen when we look at our earnings history.  When you look at the graph below, think of the green "Productivity" line as our wealth building activity.  All wealth is  generated from labor.  In a fair economy, the more wealth we produce, the more money we should have.  That is only marginally true.  Look at the disparity between what I call the producing class (all of us, the blue line) and the owner class (in red).

Putting it all together, wealth disparity has grown so much over the past 40 years because the owner class has been paying less each year in taxes while taking more each year in earnings relative to everyone else.
Found on Mother Jones. Originally submitted by volunteer editor Jessica S.

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