Fascinating. The data in this graph and discussion suggest that while the rich have been getting richer and the poor have been getting poorer--those in the middle have also been getting richer as well. (Note: the graph is inflation adjusted in constant 2009 dollars.) -- Now if we were having the middle class bifurcating--with half disappearing into the poor while half disappearing into the wealthy, this would suggest one set of policy changes. After all, having half the middle class disappear into the poor indicates a lot of hard working individuals who are (over the course of half a century) declining because of a lack of jobs, which then suggests policies that encourage middle class job creation would be appropriate. But with the middle class disappearing into the upper class, but the poor staying at the bottom of the poor suggests **a completely different set of policies.** Specifically it means identifying reasons why the poor stay poor (my favorite being implicit marginal tax rates which punish the poor when they try to succeed), rather than trying to figure out where the middle class is going. -- Personally I would favor restructuring benefits to the poor to taper off at higher income levels than they currently do, and those taper offs should be gradual rather than sharp cutoffs. If this means that lower-middle class (and in some cases, middle class) families qualify for programs we think of as "welfare programs", then so be it: the point here is to reduce the implicit marginal tax rate the poor pay to under 100%. (Right now, at some points the poor can actually give up $1.40 for every additional $1 they make--which means poverty is a rational reaction to a broken tax and welfare system.)
Posted on: Mon, 22 Jul 2013 19:49:00 +0000
Trending Topics
Recently Viewed Topics
© 2015