Equally Poorer

Michael Tanner
October 26, 2011

Excerpt:
According to data just released by the Tax Foundation, the top 1 percent of the wealthiest Americans earned 16.9 percent of all adjusted gross income in the United States. While no doubt that’s a lot of money, it actually represents a decline from 2008, when the rich earned 20 percent of all income. That’s right; the rich are earning a smaller proportion of U.S. income.

In fact, there has been a 39 percent decline in the number of American millionaires since 2007. Among the so-called super rich, the decline has been even sharper. The number of Americans earning more than $10 million per year has fallen by 55 percent. Perhaps someone should tell the folks in Zuccotti Park: Inequality is actually declining.

Interestingly, the decline in earnings by the rich has corresponded with higher unemployment and rising poverty overall. We are all poorer, but at least we are more equally poor. Hooray.

Could it be that the rich might actually perform a valuable service in our economy by, say, creating jobs? After all, what does the president think that the rich do with their money: Bury it in their back yard? In reality, individuals either spend that money or they save and invest it. If they spend it, it helps provide jobs for the people who make and sell whatever it is they buy. If the money is instead saved and invested, it provides the capital that is needed to start businesses and hire workers. It is trite but true — not many Americans have been hired by a poor person. the rest