"Study: US Tax Code Fails To Slow Widening Economic Inequality"
Study: US Tax Code Fails To Slow Widening Economic Inequality
at Citizens For Tax Justice
http://www.ctj.org/taxjusticedigest/archive/2013/04/study_us_tax_code_fails_to_slo.php#.UV3-Kb9k8yF
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Are economically disadvantaged families in the US likely to reverse their fortunes anytime soon? Not according to a new report by the Brookings Institution, which found that growing economic disparities between Americans are becoming increasingly permanent and irreversible. In other words, the study confirms that disadvantaged Americans are finding it increasingly difficult to move up the income ladder, while at the same time the position of the well-off is increasingly secure.
Brookings also found that between 1987 and 2009 the US tax system only partially mitigated the increase in income inequality and that it was not enough to sufficiently alter its broadly increasing trend. This result is not all that surprising given that the overall (combined state and federal) tax system is barely progressive, meaning that it can only have a small redistributive impact.
While many countries have taken dramatic steps to reduce income inequality, the US has allowed income inequality to grow so extreme that it now has the fourth highest level of income inequality in the developed world. Looking at the low end of the scale, the US Census Bureau found that over 46 million (PDF), or 1 in 6, Americans were below the poverty line in 2011 (the most recent year for which data is available).
But dont expect a revolution just yet. Most Americans are wholly unaware of how off track our economic system has gotten. For example, as the viral video Wealth Inequality in America explains, there is a huge disconnect between the actual distribution of wealth, the distribution of wealth as the public perceives it, and the distribution that the public believes is desirable.
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