In a recent post, I argued that the tax burden on the rich is not as great as some would have you believe. It’s not that there is anything wrong with being rich. After all, the idea that with hard work and little luck any of us could make it rich is an integral part of the American Dream. But it’s nevertheless bizarre to imagine that the rich are really the ones are suffering—not when the rest of us have been doing so much worse.
As I’ve written, according to the latest census reports, 1 in 7 Americans—and 1 in 5 American children—lives in poverty. That’s more than at any time in the last fifteen years. As Timothy Noah writes, while most Americans think there’s too much income inequality in the U.S., most have no real idea just how much there wide the gap between the rich and the poor has become. As Noah explains in his excellent series on income inequality in the U.S., over that time the rich have gotten steadily richer. As Noah points out, between 1980 and 2005 an incredible 80% of our the nation’s growth went to the richest 1% of the population, so that now that 1% makes around 18% our national income. Far from suffering, the rich are doing better than ever before.
But, as Matt Yglesias says, the real story may be not how rich the rich have become, but how little the rest of us have. While the top 20% own about 85% of our country’s total wealth, the poorest 40% of us own just 0.3% of the country’s wealth. That means the richest fifth of Americans have around 280 times as much money as the poorest two-fifths combined. So maybe we should worry less about how the rich and think a little more about how ordinary Americans are doing.