Found this well-sourced well-written article on Art on Issues and thought I’d share it here.
Over the past 30 years the vast majority of income gains have gone to the wealthiest in our country. In an economy that is 70% personal consumption, we will continue to experience slow recovery and anemic job growth until we more broadly share prosperity and rebuild the purchasing power of our economic engine, the middle class[snip]
The median household income between 1979 and 2005 rose only 13 percent while the income of the richest 0.1% increased 296%. And as Krugman points out, it was politics that drove both the Great Compression and the Great Divergence.
As income began concentrating at the top over the past 30 years, taxes on the wealthy were reduced from 70% pre-Reagan, to 28% under Reagan, and now 35% since the Bush tax cuts. The increase in income at the top along with lower tax rates destabilized income inequality. And the Tea Party’s recalcitrance about raising taxes on the wealthiest while adopting a spending cuts only approach, places safety nets at risk that further exacerbates the plight of the middle class and the poor, and thus our economic recovery and jobs creation as well.
The entire post can be found here and is well worth the read.