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Wealth and Inequality

- April 18, 2014
Does the gap between rich and poor threaten democracy?
  • Overview
  • Current Situation
  • Chronology
  • Pro/Con
  • More...
Featured Report

The very richest now claim a share of the world's wealth not seen since the Gilded Age of the late 1800s and early 1900s. The world's top 1 percent owns about half of global wealth and the bottom half less than 5 percent, according to French economist Thomas Piketty. President Obama is calling for a variety of steps to help struggling middle-class and poor Americans climb the income ladder and to provide more government revenue for programs benefiting the poor. Among his proposals are a hike in the minimum wage and an end to tax loopholes favoring the wealthiest Americans. Likewise, New York City Mayor Bill de Blasio swept to victory with a proposal to help pay for preschool programs for poor children by taxing the rich. But conservative economists say such measures would punish entrepreneurialism and stifle economic growth, arguing that wealth at the top translates into investment that creates jobs at the bottom.

Proposed Fixes

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Executive Pay

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1870s–1900sGilded Age sees rising inequality; progressives call for taxes on the rich.
1920s–1930sFDR's Depression-era New Deal creates social programs; increases taxes on the rich.
1940s–1970sWorld War II brings highest U.S. tax rates on the rich.
Late 1970s–1990sConservatives support tax cuts as key to growth; middle-class income growth falls behind productivity growth.
1992–2000Average income grows 32 percent as economy expands, income of bottom 99 percent grows 20 percent, income of wealthiest 1 percent grows 99 percent.
2000sFinancial collapse leads to new financial regulation; average family income drops during Great Recession (2007–2009).

Do the rich pay enough in taxes?


Curtis Dubay
Research Fellow, tax and Economic policy, Heritage Foundation.


Peter Diamond
Professor of Economics, Emeritus, Massachusetts Institute of Technology.
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