A new report from the U.S Census Bureau strengthens the argument for letting the Bush-era tax cuts expire at the end of 2010 for the wealthiest 2 percent of Americans. In 2009, according to census figures, the income gap between the nation's richest and poorest citizens reached its widest margin ever.
People making over $100,000 — the top 20 percent of Americans — pulled in 49.4 percent of all income earned in the nation. At the other end of the spectrum, folks below the federal poverty line earned just 3.4 percent of all income. The ratio of 14.5-to-1 was the largest ever, and almost double the record low ratio of 7.69-to-1 in 1968.
But the census figures don't just delineate a rich-versus-poor dichotomy. There is evidence suggesting the real dividing line pits the very rich versus everyone else.
People earning more than $180,000 — the wealthiest 5 percent — saw their income increase slightly in 2009. But there was a slight decrease for families at the $50,000 median income level, the heart of middle-class America.
Such numbers suggest we are witnessing a concentration of wealth in this nation that harkens back to the days of the 19th century robber barons. And it exceeds anything that's happening in other industrialized Western nations. When it comes to greed at the top, America is No. 1.
Of course, propagandists for today's robber barons scream "Class warfare!" whenever someone suggests the growing disparity between rich and poor is unhealthy. But the thing is, the widening income gap is itself a consequence of a form of class warfare that has seen the richest of the rich — aided by a government policy of benign neglect — horde an ever greater share of the nation's wealth while shoving ever larger numbers of Americans into poverty.
This is an unhealthy situation — economically, politically, morally. And a good first step toward curing it would be to let the Bush-era tax cuts expire for income above $200,000 for individuals and $250,000 for couples while extending the cuts for lower levels of income.
Doing so will leave money in the pockets of those Americans who are most likely to spend it in ways that get the economy moving again while still shaving $700 billion off the federal deficit over the next 10 years.