In 2010, the U.S. collected $1.3 trillion in individual income taxes,
but merely $160 billion in corporate taxes.
And yet a curious thing has happened in the midst of all this misery. The wealthiest Americans, among them presumably the very titans of global finance whose misadventures brought about the financial meltdown, got richer.
And not just a little bit richer; a lot richer.
In 2009, the average income of the top five percent of earners went up, while on average everyone else’s income went down. This was not an anomaly but rather a continuation of a 40-year trend of ballooning incomes at the very top and stagnant incomes in the middle and at the bottom.
The share of total income going to the top one percent has increased from roughly eight percent in the 1960s to more than 20 percent today. This is what the political scientists Jacob Hacker and Paul Pierson call the “winner-take-all economy.”
It is not a picture of a healthy society.
Such a level of economic inequality, not seen in the United States since the eve of the Great Depression, bespeaks a political economy in which the financial rewards are increasingly concentrated among a tiny elite and whose risks are borne by an increasingly exposed and unprotected middle class.
Income inequality in the United States is higher than in any other advanced industrial democracy and by conventional measures comparable to that in countries such as Ghana, Nicaragua, and Turkmenistan.
It breeds political polarization, mistrust, and resentment between the haves and the have-nots and tends to distort the workings of a democratic political system in which money increasingly confers political voice and power.