Income inequality is all the talk.
It’s not just liberal tax-the-rich circles talking; conservative small-government folks are also deliberating on how to change the current status quo. This discussion is not unique to the United States; it can be heard around the world.
Oxfam fueled the debate with their recent report that the top one percent of the world’s rich owns nearly half of the world’s wealth. To be more specific, 85 of the world’s richest people have as much wealth as 3.5 billion of the world’s poorest.
Those are the lucky “1’s.” They are the stars of the old TV show, “Lifestyles of the Rich and Famous.” If only all of us had those “champagne wishes and caviar dreams.”
But…we don’t. So the rest of us fall below 1—and most way below—on the 1 to 10 scale, where the 1’s are the super-rich and the 10’s are the extremely poor. Most of us are somewhere between 3 and 7. Yet, it appears as though the middle class is quickly shrinking.
And then there are the “10’s”; that is, those living in extreme poverty. In some countries, they reside in favelas, slums, or refugee camps. Here in America, they live on skid rows or in encampments on the outskirts of town. They are tagged as “the homeless”. There are a little over a half million people in America who experienced homelessness last year.
So what do we do?
Some people propose a “Robin Hood” approach by balancing this vast wealth gap by taxing the rich. In a way, our tax system has such an approach already. For those “10’s” who are single and earning less than $10,000 per year, their tax rate is 10% or lower. For those “1’s” who are single and earning more than $400,000, their tax rate is 39.6%. Read More »