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U.S. Income Inequality Worse Than Egypt’s

by George on February 22, 2011

I wonder how many Americans realize that the rate of income inequality in the United States is actually worse than Egypt. Yes, Egypt.

That is an indicator of how corrupt we’ve become. How did this happen?

The guy on the left has received a lot of tax breaks. Makes sense, doesn't it?

Frankly, it started with Reagan, but to blame it on Reagan wouldn’t be accurate. Reagan did two things: he greatly increased federal spending (bringing us to our first-ever trillion dollars of debt) and he reduced the top marginal rate almost in half, from 90% to about 50%.

The problem here is not always obvious. Certainly, slashing the top marginal rate puts more money at the disposal of the top rate wage-earners. It resulted in more spending – which improved the economy while Reagan was in office – but led to declining government revenue and a real problem once he left it.

The declining government tax revenue became an issue in the succeeding George H. W. Bush administration which was, despite his “read my lips” pledge, forced to raise taxes to cover a growing deficit.

The problem is that Republicans have short memories. All they recall is the robust economy under Reagan and have become so enamored of tax cuts that they see it as a cure-all for everything.

Need a robust economy? Cut taxes! Feel like punishing the poor? Cut taxes! Want to ruin a once-great nation? Start a war with Iraq and then don’t fund it … oh, and then cut taxes! Want to feel like a great guy even if you’re a schmuck? Create a fabulous expansion of entitlement spending (Medicare Part D) and then don’t fund it … oh, and then cut taxes again.

Unfortunately, although the Republican Party is really short on ideas, it is remarkably adept at finding scapegoats.

Federal aid to states has been slashed and, according to the Republicans – and their just-a-step-slow acolytes, the Tea Party – the problem isn’t that we’ve richly rewarded a legion of hedge fund managers, Wall Street dicks, and banking executives that can get through locked doors simply by oozing beneath them – with generous tax breaks, our problems are because the federal government is too big.

So, as the wealthiest of our nation enjoy the lowest tax rates since the implementation of the 16th Amendment to the U.S. Constitution, the rest of us our struggling to find jobs and make ends meet. Is this the American way?

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