Are the Rich Really Getting Richer?

"There are frequent complaints that U.S. income inequality has increased in recent decades. Estimates of rising inequality that are widely cited in the media are often based on federal income tax return data. ..............."

"However, there have been large changes in U.S. tax rules over time that have made a dramatic difference on what is reported as income on individual tax returns. .........."

"Measurements of inequality have also been affected by large reductions in income tax rates, particularly in 1986..........."

"In sum, studies based on tax return data provide highly misleading comparisons of changes to the U.S. income distribution because of dramatic changes in tax rules and tax reporting in recent decades............"

".......there is little evidence of a significant or sustained increase in the inequality of U.S. incomes, wages, consumption, or wealth over the past 20 years."

“I keep getting richer, but “rich” keeps getting redefined up. I’ve now concluded that “rich” has probably been secretly defined as “having more money than I do”. It’ll be forever beyond reach.”

You hit one of the proverbial “nails” on the head about this issue.

Rush often places the facts of this situation on the opposite side - the “poor” - in two ways.

1. The incomes of who is called “poor” keeps increasing (the socialists don’t readily admit it, they try to keep the focus on the ‘distance’ between the very top and the very bottom).

2. The actual economic circumstances of “the poor” keeps improving - # who own a home, own a car, have air conditioning, free public education, tuition assistance, own how many TVs, etc., etc., etc. to the point that many “workers” in many countries would be economically better off in the U.S., with whatever part of “public assistance” that our economic safety net provides, even with the limits and qualifications for many parts of that safety net.

Why is 1 and 2 true. Because even the hardworking poor in the U.S. benefit from the EITC which results in refunds to some of the hardworking poor that exceed the tax they had to pay. The EITC has actually helped in the reduction of welfare, because it rewards workers as opposed to shirkers. You have to have EI (earned income) (but a low EI) to get its TC (tax cerdit).

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