Reducing income inequality is essential for economic growth
Published 9:46 am Thursday, March 31, 2016
Income inequality is a major problem in our country. More and more money is going to the wealthiest citizens. Meantime, the great majority of our people see their limited resources buying less and less.
One major cause of this inequality is our tax code which provides many loopholes that allow many wealthy individuals to pay low tax rates and in some cases, no taxes at all.
Another major cause of income inequality is the decline of labor unions. Historically, unions have been a major support for workers, guaranteeing a living wage. This led to growth of the middle class. But as unions have increasingly been weakened, middle class incomes have remained flat.
Our government has the power to reduce income inequality by taking steps to remedy both these problems. Unfortunately, the Republicans who control congress have shown no interest in taking action to help the middle class.
Tax loopholes need to be closed so the wealthiest individuals may no longer hide money in offshore tax havens, enabling them to be assessed at a lower tax rate than middle class citizens. For an example, look up the low tax rate that multi-millionaire Mitt Romney has reported paying. The current tax system is rigged in favor of the rich. That is unfair and counterproductive for our economy. It needs to be changed.
Unions have been weakened as corporations have moved jobs to low-wage countries such as Mexico and China. President Obama has proposed rewarding companies that keep jobs in America and penalizing those that send jobs to other countries. The Republican-controlled congress has opposed these initiatives and many, many Republicans have, in fact, supported corporations’ efforts to maximize their profits by leaving American jobs behind.
Gross income inequality is not only unfair, it is bad for our economy. Wage stagnation impedes economic growth. An economy grows when individuals are earning enough to purchase goods and services. If middle class income is stagnate, so is the economy.
This situation can change if we elect those who care about correcting our unfair tax system and who oppose the off-shoring of jobs. Those persons are more likely to be Democrats than Republicans. Please keep this in mind when you cast your vote in November.