RESULTS Op-Ed on Income Inequality Published in the Des Moines Register

June 1, 2010
by Jos Linn

RESULTS volunteer and staff person Jos Linn had an op-ed published in the Des Moines Register on May 29, 2010. The piece highlights new information on the impact income inequality has on the social ills faced by rich countries and U.S. states.

How America could become stronger

Iowa is indeed a good place to live. Not because of our rolling hills, pleasant summers, or national political influence. No, a recent book shows with strong and compelling evidence that Iowa’s unique appeal rests in our lower income inequality.

In “The Spirit Level: Why Greater Equality Makes Societies Stronger,” epidemiologists Richard Wilkinson and Kate Pickett poured over reams of data on a set of common social problems: trust in society, mental health, drug use, life expectancy, infant mortality, obesity, children’s educational performance, teenage births, violent crime, imprisonment and social mobility. Using this data, they looked to see how these problems related to income levels in rich countries and the 50 states. What they found is astounding.

They first discovered that the overall wealth of a society does not determine the likelihood of these problems. Richer countries can do better or worse than less affluent ones. However, when they looked at income inequality — the gap between rich and poor — in every area they measured societies with greater income inequality have significantly higher rates of these problems. For example, unequal countries have three times the amount of mental illness, six to eight times the homicide rate, and eight times the teenage birth rate compared to more equal countries. The same goes for U.S. states. Louisiana, Mississippi and New York, where inequality is much higher, do far worse than more equal states like New Hampshire, Wisconsin, and Iowa (Iowa’s murder rate is seven times lower than Louisiana’s).

But even though Iowa fares well when examining the gap between the “haves” and “have nots,” the United States is at or near the top in every problem category. And based on the evidence, we know why. The U.S. income gap is at its highest level in generations. The richest 10 percent of Americans own 70 percent of all U.S. wealth. After 30 years of “trickle down” economics, most Americans are still waiting for the trickle.
But Congress can start to right this ship. Here are three steps it can take this year toward closing the income gap:

  • First, expand the Earned Income Tax Credit and Child Tax Credit for low-income workers. The 2009 expansions of these credits, which have helped 7 million people, will expire this year. Make them permanent to strengthen families and help struggling workers make ends meet. We must also make these credits available to more low-income workers.
  • Second, allow all the Bush tax cuts for the top 2 percent of income earners to expire. This helps the middle class as well as wealthy taxpayers. As Wilkinson and Pickett discovered, the rich in low inequality countries are healthier, safer and do better in school than the rich in unequal countries.
  • Finally, leave the estate tax alone. Since 2001, cuts to the estate tax have made the richest 2 percent of Americans a whole lot richer. Fortunately, next year the estate tax returns to its fairer, pre-Bush levels, but Sen. Chuck Grassley and others are working zealously to prevent that from happening by enacting another, permanent cut. In a struggling economy, and in light of this new evidence, giving another tax cut to a few extremely wealthy families is the last thing Congress should be thinking about.

These changes won’t solve everything, but they’ll at least get our country (and our tax code) moving back toward rewarding work, not wealth. And by reducing income inequality in the United States, we can start addressing one of the underlying causes of many of our most pressing problems.

Need proof? Look no further than our own back yard. What’s good for Iowa is good for America.

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