The income and wealth gap in the U.S. has been increasing steadily ever since the election of Ronald Reagan in 1980.
Policies advanced by Republican presidents – especially George W. Bush and Donald Trump – and Republican leaders in Congress have produced skyrocketing gains for the tiny handful of the very richest Americans, big gains for the top 1%, no gains for the upper middle class, and big losses for 90% of the country, compared to the overall economic growth of the U.S. According to data from the St. Louis Federal Reserve, “On average, Black families own about 23 cents for every $1 of white family wealth, while Latinx families own on average about 19 cents for every $1 of white family wealth.” The U.S. ranks the lowest among developed nations in income and wealth inequality.
Harris
The Biden and Harris administration, by contrast, has made historic investments in addressing infrastructure needs and climate change – laws passed with zero or very little Republican support – to narrow America’s income gap, bring up the 90% of the country below the rich and super-rich, and ensure a living wage for the tens of millions of Americans operating at or near the poverty level.
Harris proposes to expand the Child Tax Credit that, for a time during COVID, cut childhood poverty in half in the U.S., and provide an Earned Income Tax Credit of $1,500 for those in lower-income jobs. She also proposes to build three million new housing units and to create a $40 billion fund to help local governments find solutions to the housing crisis.
Here’s a short video that vividly captures what U.S. wealth inequality looks like graphically. It’s worth watching to better understand the profound economic disparity between the top 1% and the rest of us: Wealth Inequality in America
Trump
This steady increase in income and wealth inequality is the direct outcome of forty years of Republican “supply-side,” “trickle-down” economics: the notion that tax breaks for corporations and the very rich will result in gains for everyone else. Donald Trump’s 2017 tax overhaul proved this theory not only false, but catastrophically false.
Trump’s tax cut alone gave America’s richest individuals a gift of $1.5 trillion.
In a new term, Trump promises to preserve that tax cut and to cut further (likely putting Social Security and Medicare under increased financial pressure). He has proposed to end taxes on tips and Social Security payments, and to cut regulations to help business. This is always a tradeoff, as regulations are designed to protect against economic meltdowns arising from overly risky business behavior – a regular feature of American life over the past hundred years.
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