Wednesday, December 27, 2017
The U.S.'s widening gap between the rich and poor is partly due to less progressive taxation, the World Inequality Report 2018 said, a finding that may spark additional debate about the current Republican tax reform effort, which critics say will reward the wealthy and corporations far more than the middle class or lower-income households. The share of American national income controlled by the country's top 10 percent of earners stood at 47 percent in the U.S. and Canada last year, compared with 46 percent for Russia. Europe's share of income held by its top 10 percent of earners stood at 37 percent, by comparison. Yet in 1980, the United States and Western Europe had similar levels of inequality, the researchers found. At that time, the top 1 percent held about 10 percent of income. Fast forward to 2016, when the balance had shifted considerably, with the top 1 percent in Europe holding a 12 percent income share, compared with 20 percent in the U.S.
"From a broad historical perspective, this increase in inequality marks the end of a postwar egalitarian regime which took different forms in these regions," the report noted.
It added, "The income-inequality trajectory observed in the United States is largely due to massive educational inequalities, combined with a tax system that grew less progressive despite a surge in top labor compensation since the 1980s, and in top capital incomes in the 2000s."
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