General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsChart of the Year: Changing Distribution of Income Growth During Economic Expansions
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Prophet 451
(9,796 posts)The rich get richer and the poor get poorer, the GOP dream.
Tom Rinaldo
(22,911 posts)Scuba
(53,475 posts)Odin2005
(53,521 posts)edhopper
(33,208 posts)and the Dems is not rescinding the Bush tax cuts. That and the hands of Wall Street policy have lead to the last data line.
badtoworse
(5,957 posts)...as well as tax rates. Since 1949, the trend has been declining for the bottom 90% and rising for the top 10%. That spans high marginal tax regimes and lowered ones, and it also spans periods of Democratic and Republican domination. This suggests to me that other factors are driving this.
IMO, the root cause is the expansion of the global market place such that products that were previously manufactured only in the US are now being manufactured at lower cost in foreign countries. In 1949, at the start of the graph, Europe and Japan were still recovering from WWII and had limited industrial capability, and the third world countries had not yet started developing into viable locations for new plant. Through the sixties, this meant that the US was basically the only game in town.
This situation gradually changed over the decades making it cheaper to manufacture overseas than domestically. The beneficiaries of the cost reduction were largely wealthy people with ownership or investments in the manufacturing companies. The losers were American workers who were increasingly in competition with foreign workers that would do their job for less money. Increasingly, economic expansion meant building a new plant in China or manufacturing clothing in Sri Lanka. The trade deals like NAFTA were particularly damaging in this regard.
edhopper
(33,208 posts)but the giant shift to the benefit of the wealthy can clearly be seen as a result tax cuts and deregulation started under Reagan.
Note that with the Clinton tax increase, the trend slightly reversed, only to be squashed under Bush, with Obama doing nothing to change that.
former9thward
(31,805 posts)People in the bottom 90% are in jobs that are affected negatively by global competition. Those in the top 10% are in occupations that benefit by global competition. The U.S. was top dog after WW II. Since then more and more countries can do what we used to do almost exclusively. It is the 'new normal'.