Inequality, Poverty, and Taxes

Inequality, Poverty, and Taxes

Income distribution in the United States has remained virtually unchanged for onequarter of a century. According to government figures, the poorest 20 percent of all families received 5 percent of the cash income in 1947 and they receive the same share today. By contrast, the richest 5 percent received 17 percent of the cash income in 1947 and 16 percent today. If the various types of noncash income that are omitted from the official figures are added to the distribution, the share going to the rich is vastly increased.

Except for the select few in the top 1 percent of the income distribution, there is little if any progressivity in the tax structure. According to a recent report by the Brookings Institution, the same proportion of income is paid in taxes by families at the 20th percentile and at the 99th percentile. Because of high taxes and the high cost of living, very little saving is accumulated by the lower and middle income groups. Abut one-third of all the wealth in the United States is owned by the top 1 percent of the families who have a net worth of $200,000 or more.

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