Disturbing economic inequality news plus a stunning chart

The fallout from our nation’s decades-long effort to slash taxes on wealthy individuals and profitable corporations (and the public structures those taxes once provided) continues to spread. The Washington Post reports that the growing gap between the super rich and everyone else is directly and negatively impacting state government budgets:

Income inequality is taking a toll on state governments.

The widening gap between the wealthiest Americans and everyone else has been matched by a slowdown in state tax revenue, according to a report being released Monday by Standard & Poor’s.

Even as income has accelerated for the affluent, it has barely kept pace with inflation for most other people. That trend can mean a double whammy for states: The wealthy often manage to shield much of their income from taxes. And they tend to spend less of it than others do, thereby limiting sales tax revenue….

Rising income inequality is not just a social issue,” said Gabriel Petek, the S&P credit analyst who wrote the report. “It presents a very significant set of challenges for the policymakers.”

Stagnant pay for most people has compounded the pressure on states to preserve funding for education, highways and social programs such as Medicaid. The investments in education and infrastructure also have fueled economic growth. Yet they’re at risk without a strong flow of tax revenue.

Meanwhile, this week’s most stunning visual of the nation’s mushrooming inequality comes from the U.S. Federal Reserve, courtesy of the good people at Too Much Online:

Inequality - wealth distribution


One Comment

  1. Alan

    September 16, 2014 at 10:33 pm

    This sadly reminds me of a rather famous Scottish theater company, 7/84, (7% of the population owned 84% of the wealth), established in the 1970’s, and some 40 years later still evident in the USA, and getting worse.

    I had the delightful pleasure of seeing “When The Wind Blows” by 7/84 in the Greenock Arts Guild in 1989 by 7/84, directed the late Gerard Kelly.

    It’s thoroughly depressing that in this day, in the worlds’ wealthiest nation, we have poverty that simply doesn’t exist in western Europe, yet our politicians seem to be more concerned about winning their next election rather than addressing the ills of our society. I wonder just when all of this ‘trickle down’ economics will have a positive effect on the rest of us? Somehow, I think I will be evaporated by a nuke before the trickle down ever happens…

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