The Rich REALLY Are Getting Richer....

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Today our friends at the Center on Budget and Policy Priorities and the Economic Policy Institute released a really interesting study called Pulling Apart. The study, which was released nationally and in several states, documents the growing income inequality in this country. Questions like who were the economic winners between the early 1980s and the early 2000s and how much did the winners win by were answered in this report.

The results are pretty shocking even for those of us who think that the gap between the haves and have nots is already too broad - this helpful report gives us the data to back up this presumption. For example, in my home state of North Carolina, the poorest 20% saw an annual increase in their inflation-adjusted income of about $105 dollars a year over the past two decades, while the wealthiest experienced an average increase in their income of $4,050 per year! Wow! These figures tell me that if you are in the poorest 20% group it's real, real hard to move up the ladder. It's unbelievable to think that the richest 5% experience their income growing the equivalent of 4 new laptop computers each year, while the poor lag behind.

The authors found that the states with the largest income disparities between the poorest and wealthiest groups are:
  • New York
  • Texas
  • Tennessee
  • Florida
  • Arizona
Obviously it's interesting to note that three of these states (Texas, Florida, and Tennessee) don't have broad based income taxes. These are also states that have very regressive tax systems, mainly because they lack an income tax. In states with regressive tax structures the poor pay more of their income in tax (in some cases, several times more) than do wealthier taxpayers. So not only are we seeing that the rich are getting richer, but in these states the tax system is actually accelerating this trend. No wonder the income gap is widening so much.

If you are interested in looking at what's going on in your own state with regards to the economic gap click here. If you're interested in learning more about your own state's tax structure click here.

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