Anonymous
Anonymous asked in Social ScienceEconomics · 1 year ago

why is the gap between rich and poor growing in the U.S?

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  • L
    Lv 7
    1 year ago
    Favourite answer

    Between the "rich" and "poor" was the "middle class". The "middle class" was where most of the working population was. With factory closures or production moving to lower cost countries, the "middle class" jobs went away. The people who made up the "middle class" either landed jobs paying higher wages making them more wealthy or minimum wage jobs placing them into the "poor" category.

    While all that was going on, many production jobs that remained in the US were automated - result was people no longer needed to do stuff - robotics replaced people. And the people either found the higher paying or lower paying jobs, but nothing that would be considered "middle class".

    And while all *that* is going on, the federal, state and local tax increases "award" people who make less money by providing different sorts of subsidies, assistance, lower tax brackets and all that... especially in the states that are high-tax states... so the people who make lots of money get taxed at a higher rate to subsidize the "poor". For example, I am in a 40% tax bracket in California... between state and federal taxes... while someone who is "poor" is in a 25% tax bracket.

    And while all *that* is going on the *really wealthy* are not "employed", so if they set it up properly, they have no income tax (and certainly no payroll tax)... Their money is made in tax-free investments... so while "taxing the rich" is an interesting sound-bite, especially since "the rich" have the money to be taxed, in practice, getting them to share their wealth is problematic.

    Some would suggest that the current tax structure for individuals needs to be gutted and replace with a "flat tax". In my mind, any earnings over $35k/year should be taxed at 5%. No deductions for anyone. Not for children, not for mortgage, not for interest payments, not for medical expenses...

    So... if someone makes $10 million in earnings, they pay 5% on everything over $35k. If someone makes $50,000 in earnings, they pay 5% on everything over $35k... 5% across the board for earnings over $35k. But flat tax will never happen because the CPA/Tax Attorney/Accountant etc. lobby would not allow it...

    This means Sales tax and funky local taxes for special projects goes away and federal, state and local government needs to learn to live within their means and stop spending money they don't have. Remember, the only money government truly has is that which we pay to government in taxes...

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  • don
    Lv 5
    1 year ago

    Because of corrupt liberals.

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  • 1 year ago

    Because of globalization. Once upon a time, the poor could leave high school, and go to work @ the factory. They had good paying jobs with benefits. Now-a-days, all those factory jobs have left the country & went to China, Vietnam, Pakistan, India, Mexico, etc. The low labor cost countries.

    You have to renegotiate some of those deals & bring the jobs back. Otherwise they're stuck working in low paying service industry jobs.

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  • 1 year ago

    Because of supply and demand. The incomes of "the Rich" have kept up with inflation over the years but the incomes of entry-level positions have remained stagnant. That is because there are only 22 million entry-level jobs in America but there are 40 million unskilled laborers with more coming every day. If you want a higher entry-level wage, then you simply have to be in favor of a more secure border.

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  • 1 year ago

    Because the rich control the government and the economy. And because the poor are unable to fight back and defend their standard of living.

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  • LM440
    Lv 6
    1 year ago

    In the U.S. there is an abnormal income difference between business owners and management to the working class. This variation is only taking a snowball effect as companies cut productive employees and stack up figure head ineffective management.

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  • Anonymous
    1 year ago

    People with guns are free to be poor. It's in our constitution for more than 200 years. On the other hand, I'm wondering why rich and poor are growing in China. It has only one communist party. and people are not free at all.

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  • Athena
    Lv 7
    1 year ago

    In the U.S.?

    As opposed to Venezuela?

    Maybe because the rich make money and the poor rely on the government for their needs?

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