Federal government largest driver of income inequality?


I missed this when Reuters reported on it earlier this week, but it’s worth a close look. The scourge of income inequality has been the focus of Democratic politics since at least September 2011, when Barack Obama began demanding higher tax rates on the wealthy in order to achieve “fairness.” Obama and his party have played class-warfare games ever since, playong footsie for a while with the Occupy Movement, until the stories of abuse, criminality, and weirdness got to be too damaging. All the while, the Democrats have insisted that they are fighting income inequality, and that we need more government spending to eliminate it.

In their “Unequal State of America” series, though, Reuters discovers the epicenter of income inequality — and it’s right where all that federal spending starts:

In the town that launched the War on Poverty 48 years ago, the poor are getting poorer despite the government’s help. And the rich are getting richer because of it.

The top 5 percent of households in Washington, D.C., made more than $500,000 on average last year, while the bottom 20 percent earned less than $9,500 – a ratio of 54 to 1.

That gap is up from 39 to 1 two decades ago. It’s wider than in any of the 50 states and all but two major cities. This at a time when income inequality in the United States as a whole has risen to levels last seen in the years before the Great Depression. …

The federal government does redistribute wealth down to struggling Americans. But in the years since President Lyndon Johnson took aim at poverty in his first State of the Union address, there has been an increasingly strong crosscurrent: The government is redistributing wealth up, too – especially in the nation’s capital.



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