January 14, 2014 by David K. Sutton
How Does Wealth Inequality Affect The Average American?
How does wealth inequality affect the average American? After all, for those of us fortunate enough to make a decent living, why should it matter that there are a select few in society making astronomical sums of money?
This is one of those typical “don’t think about it” questions you get from conservatives. It’s a premise that kind of makes sense on the surface, so long as you don’t think about it too hard.
Because money equals power, that means people with more money have a greater ability to influence their respective areas of interest. Hell, the Supreme Court, in their “Citizens United” ruling, declared that money equals speech, which is bullshit, but since that’s the ruling we are living under, that means some people have more speech than others. So that’s one problem with high wealth inequality, those with massive wealth are not participating in democracy on the same level as the rest of us.
When a person has so much wealth they could never dream of spending it all in their lifetime, and they are also politically ambitious, that means they have an outsized advantage in our political system, whether it be running for office, or lobbying those already in office. In “What Does It Mean To Be A Liberal?” I wrote, “When wealth concentrates in the hands of too few, the rights of the many are effortlessly tempered by the power of the few.” It doesn’t have to be deliberate. I don’t think the wealthy are all bad people purposely trying to screw the poor, but it’s natural for people to look out for their own interests. When they do so with massive wealth and political power, it tends to be at the detriment to people at the bottom of the economic ladder.
As wealth inequality increases, a greater share of the economic gains from productivity go disproportionately to people at the top, even though these economic gains are only made possible by the labor of all classes. This is one of the big reasons why wages for average Americans have been mostly stagnant for decades compared to big gains for a select few at the top. And this all connects back to the greater speech and outsized political advantage. The disproportionate impact the extremely wealthy have on the political system and legislation affords them even greater power and wealth. It’s a feedback loop.
So we need to find a way to make for a more equal and just society, and yes, that will include tax increases for top incomes. We need our tax system to be more progressive. A more just society does not mean everyone will make the same income, or that we will impose a 90% tax on the top incomes, as those are absolutist retorts from the right-wing. And no, this isn’t about socialism or demonizing wealth, the canards of the Right, meant to deflect away from truly systemic issues in our society. We won’t fix this problem if we continue to ignore it.