Over at avalantern, my contemporary posted a link with this picture:
The message most people get from looking at this image is something along the lines of “wow, a small percentage of people control a large portion of the wealth in the United States.” But how important is this really? And does the United States have a uniquely inferior treatment of this inequality?
The answer to the first question, as I’ve written about before, is: not very. Wages for median family in America have indeed stagnated since the 1970’s. But in terms of standards of living almost everyone is better off compared to forty years ago. Just because rich people are even better-er off doesn’t necessarily mean an injustice. Economics is not a zero-sum game.
The answer to the second question is probably much different than most people imagine. Check out this graph from the OECD:
What sticks out to me the most is the fact that United States has the highest percentage of taxes paid by the richest decile. Furthermore, the United States does not have an absurdly different proportion of income distributed to the richest decile compared to the other profiled countries. (Note: the first graph analyzes wealth, the second graph looks at income.)
Neither graph focuses on the redistribution of wealth. The United States tends to put its tax revenue disproportionately towards defense (something that is a whole other issue altogether). But I think it’s important to highlight just how much the US taxes the rich relative to all those socially democratic European countries.