The income gap

If a thesis is repeated hundreds of times, many people believe it; if it is repeated millions of times, hardly anyone doubts it. Like masks can stop the spread of a virus, or you can stop climate change by forcing people to own a different car or sending rich celebrities in private planes to conferences where they lavish themselves with goodies, or men can become women by wishful thinking and hormones. And there's another one: there's a rising gap between rich and poor.

"Phil Gramm, Robert Ekelund, and John Early recently showed in their excellent book "The Myth of American Inequality: How Government Biases Policy Debate." The actual percentage of their income paid by the top one percent of earners in tax in the U.S. was only 16.1 percent in 1962, when the top marginal rate was 91 percent. However, in 1988, when the top rate was only 28 percent, the percentage paid by the top one percent of earners had risen to 21.5 percent! As the top tax rate fell by two-thirds, the percentage of their income that the top one percent of tax filers paid in federal income and payroll taxes rose by a third.

Since the 1960s, the welfare state in the U.S. has been constantly expanded, so that the proportion of the population receiving transfer payments, and the amount of transfer payments, has increased continually. If one takes into account taxes on the one hand and transfer payments on the other, it becomes clear that the actual income, i.e. what a citizen has left after taxes and transfer payments, is much lower for the rich and much higher for those on low incomes."

New Study Calls into Question the Theory of Rising Inequality - Foundation for Economic Education (fee.org)

Exploring Income Transfers: What You Should Know (enrichest.com)

List of 80+ Federal Welfare Programs (singlemotherguide.com)

Judging polices on intentions rather than results

We have so many "feel good" policies that drain us dry, and should be a warning, but our leaders never learn, and perhaps the citizen-voters don't either. Virtually every transfer of wealth program in the War on Poverty failed a the macro level, and struggled at the micro. Like Head Start. The government's own studies at year 50 showed almost no advantaged for the thousands invested in each child. But it feels good, hope never dies, and the program will continue to be a bloated, over-sold, under achieving with good intentions so you can get back to your nice life. These programs make politicians wealthy, they get them reelected. These programs provide millions of jobs for the middle class bureaucrats and their staff who run them, from the grant writers, to suppliers and operators, to social workers to the low income who are hired in to staff them.

This article is 22 years old--but not much has changed. https://fee.org/articles/why-the-war-on-poverty-failed/

I remember the Harrington book that launched LBJ's war. I was so excited we could end poverty in my life time. However, the standard for poverty simply went up to accommodate a perpetual lower class. Then we went to "gap" instead of material wealth. Or looked at ZIP codes. Then we judged all by race, color and ethnicity, not actual need. And in all the administrations since LBJ, only the Trump years made an actual, real dent and improved the lives of millions without robbing Peter to pay Paul. And that was just too scary for leaders of both parties--loss of power, sound the alarms!

The War on Poverty: 50 years of failure | The Heritage Foundation

The War on Poverty After 50 Years | The Heritage Foundation

Homelessness in America: An Overview | The Heritage Foundation

"The welfare state is self-perpetuating. By undermining the social norms necessary for self-reliance, welfare creates a need for even greater assistance in the future. President Obama plans (2014) to spend $13 trillion over the next decade on welfare programs that will discourage work, penalize marriage and undermine self-sufficiency."

And scholars will always disagree. The Accomplishments and Lessons of the War on Poverty | Scholars Strategy Network

Income inequality—shrinking

As government transfer payments to low-income households exploded in the last 50 years, their labor-force participation collapsed and the percentage of income in the bottom quintile coming from government payments rose above 90%.   WSJ Incredible Shrinking Income Inequality – WSJ

"Nobody making under 400,000 bucks would have their taxes raised. Period. Bingo." – Joe Biden, May 22, 2020

Of course, that doesn't tell the whole story. An increase in the federal corporate tax rate to 28 percent as proposed would raise the U.S. federal-state combined tax rate to 32.34 percent, highest in the OECD and among Group of Seven (G7) countries, harming U.S. economic competitiveness and increasing the cost of investment in America. When businesses are taxed more they either move to another country or raise our prices. So who is Biden kidding?

Few people could get elected promising to raise your taxes, but Biden isn't few people. He's just Barack Obama 2.0.