How Did The Income Gap in America Get So Big?

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Can average Americans still dream the dream?


Has America just become a nation of whiners?

“The rich are too rich while I can’t get ahead.”

“I work longer hours with less help for the same money while benefits take more and more out of my paycheck.”

“We’ve been at our jobs for twenty years and still live paycheck to paycheck.”

We have all heard these sentiments from our employees, our children, our spouses, our parents – ourselves. What’s happened to resourceful “pull yourself up by your own bootstraps” Americans? Well, if you look at the data, you'll find they don't have bootstraps any more. They can't afford them. And they have not been able to afford them for quite some time.

According to The Washington Post, The New York Times, Reuters, CNN, Investigative Reporters and Editors, the Center for Budget and Policy Priorities, and the Congressional Budget Office, the top one percent of U.S. households saw their after-tax incomes grow by 275 percent in the last generation. That was more than quadruple the growth of the rest of the top 20 percent of the population during that same period. After tax income is more unequal today than it was thirty years ago by all accounts. Researchers have reported the one thing that clearly stands out during this period was income tax cuts, especially rate cuts for high earners.

Reuters columnist David Cay Johnston won a Pulitzer Prize in 2001 for uncovering loopholes and inequities in the U.S. tax code. He wrote the 1934 economic rebound after the Great Depression was widely shared by the vast majority of Americans who all enjoyed income increases. While in 2010, when the top ten percent of Americans began to recover from the financial reverses of the second greatest recession in our history, while the rest of our society, the vast majority, did not see any income recovery. In fact, what they experienced was just the opposite. Just 15,600 of the highest income households pocketed an astonishing 37 percent of the entire national gain. Why such dramatic differences in 1934 and 2010? The answer lies in a major shift in federal policies that hurt most of the U.S. population.

Government policy in the early 1930s had the goal of improving the lot of the average American through such policies as supporting the creation of jobs and building things people need and use. But since 1980 policy has focused on lower taxes and fewer audits to make people accounable. Analysis of the latest IRS data by economists Emmanuel Saez and Thomas Piketty reports the average income of the vast majority of taxpayers in 2010 (adjusted for inflation) was only slightly more than the average income going all the way back to 1966. Those at the top of the scale saw their 2010 average income grow by $18.7 million per taxpayer compared to 1966.

A country of whiners? Bootstraps? Looking at these statistics you have to wonder why people not rioting in the streets?

Wait a minute.

They have been.


Put Another Way:

Can We Be Reasonable?

Data from the Center on Budget and Policy Priorities shows in addition to rising incomes for the top one percent of Americans, along with the benefit of reduced taxes, the equation should include the impact of the reduction in fringe benefits and government services on the average worker. Things like health care, child care, and spending for their children’s education take a bigger bite out of the budget for middle-class and poor Americans. The affluent have greater resources to cover those necessary expenses.

At some point don’t we have to ask ourselves if it makes sense to continue providing tax cuts averaging more than $150,000 a year to people making more than a million dollars a year, while saying we do not have enough money to provide health insurance to 47 million Americans and hire public school teachers? Call me a bleeding heart, but at some point isn't there an expectation of simply being reasonable?

If we are going to be reasonable, we also have to ask ourselves why the Democrat-controlled Congress loaded the 2009 stimulus with $15 billion for more Pell grants, $9 billion for community and rural development, $20 billion for the renewable energy tax credit and other items that had nothing to do with the crisis at hand? An estimated $87 billion was used to bail out state governments that had overspent on Medicaid. About $140 billion was put toward individual tax rebates that -- most economists warned -- would do little or nothing to energize the economy. Only about $100 billion of the stimulus -- one dollar in eight -- went to support new infrastructure projects. Why would the Democrats do something like that in a time of crisis?

Maybe, just maybe, they did it because of the income shift of the past few decades. Maybe they saw it as an opportunity to balance the scales to a miniscule degree. After so many years of things going extremely in favor of the very ones in our country who need the advantage the least, maybe they thought they needed to swing the pendulum in the other direction.

The argument has been made that President Obama and the Democratic Congress didn’t engineer the stimulus to maximize its economic impact. It has been called a political exercise, repaying favors and supporting causes. To some, it looked like the stimulus's potential benefit was squandered. To others, it looked humane, offering to those who needed help longer and somewhat higher unemployment benefits, subsidies for those who had lost jobs to extend their health insurance, and expanded food stamps. It provided tax cuts to most workers – up to $400 for individuals and $800 for married couples. Not very much in light of the tax cuts given to the country’s highest earners over the past thirty years, but something. And at that point, something was a darned sight better than more of nothing.

Could we have a discussion, not just about what has happened in the last three and a half years, but about what has happened in the past generation? Is the American Dream so deep-seated in the average American that we can’t recognize when it is year after year being methodically moved further and further out of the average person’s reach? Yes, in America anyone who works hard can go from humble beginnings to untold wealth. But looking at these numbers reported by so many verifiable experts, how likely is it that the dream will continue to be realized by the present generation and those to follow? To the objective observer, is it not obvious that the game has been altered to favor those who have already realized the American Dream, making it harder and harder for those who come after them to see their dreams come true?

If just as deep-seated in Americans is the conviction that you leave your children better off than you were, we had better have this discussion pretty quick. And instead of railing about how much in debt we are leaving them, pull the wool off our collective eyes, and talk about why in America today, only the rich are getting richer?

Homeownership. A college education. Building a secure retirement. These goals were once within the reach of the average American.

What happened?





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Comments 70 comments

billybuc profile image

billybuc 4 years ago from Olympia, WA

I obviously agree completely with this hub; I wrote about this several weeks ago, and I have a follow-up coming in another week about the Economic Slavery in this country. The deck is stacked against us and it remains to be seen what we are going to do about it. I, for one, am going to simplify to the point where it makes no difference what the government does. My American Dream is now to simplify...period.

Well-researched hub my friend. Nice job!


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

No higher praise.


ib radmasters profile image

ib radmasters 4 years ago from Southern California

My opinion is that it is the nature of the Income Tax System, and its Internal Revenue Code.

Additionally, the size and scope of the government continues to increase, and the wealth of the middle class resides in the government employee.

Wage earners don't become millionaires, they become tax prey. The middle class wage earner is sinking into the poor class that is being enlarged by the federal government.

Small to medium businesses are being replaced by large corporations, and international super conglomerates own most of these large corporations.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

"Wage earners don't become millionaires, they become tax prey."

That's this hub in a nushell.

Thanks for reading and commenting and being patient while HP worked through my sources.


tammyswallow profile image

tammyswallow 4 years ago from North Carolina

You really did a great job of making all the complexities of this problem in a way that is easy to understand. I agree with ib above.. the rich keep getting richer because they drain the middle class. I think all we can do is get organized as a middle class and use the power of our dollar by supporting small business owners. So many are gone it would be difficult to do this, especially with gas. Excellent, thought provoking hub!


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

tammyswallow: Thanks for reading this and your thoughtful comment. I agree with your suggestions. I also think we need to watch carefully what our elected officials do in the coming years about our tax code. I think that's the big picture solution, but I'm not holding my breath until they act.


Melovy profile image

Melovy 4 years ago from UK

I don't know a huge lot about the American economy, so this was a very interesting read. The same widening of the gap between rich and poor has happened in the UK, after years of it improving. Some of the practices occurring now amaze me - for instance my husband is a pilot and apparently the young people joining this industry now have to pay for all their own training and often have to work for free once they've done that - or they get temporary contracts and get laid off during the winter months when it's quieter. This does not create a happy workforce, and I can't help but think that in the longterm it backfires on employers.

I agree with Tammy that supporting small (and ethical) businesses is very important.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

Melovy: Thanks for contributing from the UK. It's amazing to hear what's going on in other countries/economies. I agree with Tammy too, I just think the solution has to be bigger than that. For now though, except for voting, that's probably the best we can do.


Melovy profile image

Melovy 4 years ago from UK

Kathleen, whenever I think what I do isn't enough there's a story it helps me to remember. There have masses of starfish washed up on a beach and they are dying. An old woman is picking them up one by one and throwing them back into the sea. Someone sneers at her and says what she's doing won't make any difference to all the dying starfish. She replies, "It makes a difference to this one."

If we all take small actions, those small actions become big.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

I love that story. I used to be the theme for an organization I raised money for that interceded for abused children when they went to court. From your mouth to God's ears Melovy.


William Young profile image

William Young 4 years ago from Eaglle Grove, Iowa

Your article is well written, but we have to get over this idea in America that the rich are getting richer at the expense of the middle class. That is utter nonsense. LeBron James makes 30 million dollars a year for playing basketball. Why? Because somewhere along the way in his life he got very good at playing basketball, to the point where he was good enough to play it professionally and he makes a lot of money doing that because there is a very large marketplace of fans for his profession. So explain to me how he is harming the middle class? He's not doing anything to the middle class or anyone else for that matter. This narrative that some perpetuate that this is the haves vs. the have not's is just phony.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

William: Thanks for your contribution. This hub is not about "this idea". It is about facts and figures. They are verifiable. I've felt the same way as you until I was confronted with the historical statistics.

I don't think anyone has a problem with a sports figure or movie star who, through talent and luck, rises to riches. It is systematic redefining of the tax system that is eliminating an entire class of working people who only want to own a home and put their kids through college that is the complaint. The numbers are not phony and come from a variety of established sources.


phdast7 profile image

phdast7 4 years ago from Atlanta, Georgia

Extraordinarily well done. Well researched, well written. Sharing.


Justsilvie 4 years ago

Excellent Hub ! Voted up and shared!

I know we need a discussion on the subject, but how do we get past people who are basically in the same financial boat as the rest of the country refusing to look at the facts even when presented in black and white?

I have friends and family who look at me the same way they used to when I said I believed there was life beyond Earth. Like it is some scifi movie fantasy instead of doing some reliable research for themselves.

This quote so describes a large majority of Americans

“Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” ― John Steinbeck


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

phdast7: high praise coming from you, friend. Thanks for the encouragement.

Justsilvie: Boy, did you ever hit the nail on the head. I'm convinced most Republicans see themselves as someday being part of the one percent and want to be aligned with them - just in case they make it. Never heard the quote but it sounds just like Steinbeck!


mours sshields 4 years ago from Elwood, Indiana

Very well written and a sad commentary on our country.

Marcia Ours


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

mours sshields: Thanks. Hope it's not too sad. Where there's a will . . . Welcome to my hubs!


shiningirisheyes profile image

shiningirisheyes 4 years ago from Upstate, New York

As you know I am all too aware of the current state of the economy as well as the "rich get richer and the poor get poorer".

I commend you for producing an important and insightful hub such as this. So sad to know the situation at hand.

I hope more stop by to read it.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

shiningirisheves: Thanks so much for your comments and encouragement. I hope more read it too!


JayeWisdom profile image

JayeWisdom 4 years ago from Deep South, USA

This is an excellent article, Kathleen, well-researched, organized and "built" with facts. I agree with everything you wrote and with justsilvie who commented about "...people who are basically in the same financial boat as the rest of the country refusing to look at the facts even when presented in black and white?"

That is a sad situation, but one it seems impossible to remedy. When people refuse to see the truth, they can't be forced to recognize it.

Voted UP+++

Jaye


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

Thanks Jaye. I agreed whole-heartedly with justsilvie's comment too. Thanks for taking the time to comment. A lot of this could be repaired with tax reform, as well as decreasing the deficit. Doesn't seem that hard to understand.


tillsontitan profile image

tillsontitan 4 years ago from New York

The facts are what make our current situation so scary. You've listed the facts and added "an expectation of simply being reasonable?"...what is wrong with that? Nothing! We are the first generation in years whose children will make less and have less than their parents. Definitely something wrong with THAT picture.

"...year after year being methodically moved further and further out of the average person’s reach" how do we succeed? How can we reach the American Dream when it is becoming more and more unreachable!

This is an excellent hub...now all you have to do is figure out the answers ;)

Voted up, useful, awesome, and interesting.


BlissfulWriter profile image

BlissfulWriter 4 years ago

The United States has the greatest income gap of any industrialized nation. And Washington D.C. (no surprise) has the greatest income disparity followed by the state of New York. Reference: http://blissfulwriter.hubpages.com/t/336633


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

tillsontitan: If only I could. I know what I'd do, but those guys in DC never listen to me.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

BlissfulWriter: I did not know these stats, but I'm not really surprised. Thanks for the link. Hope my other readers will go to it for more information.

Am I wrong or is this your first comment on one of my hubs? Welcome or welcome back!


BlissfulWriter profile image

BlissfulWriter 4 years ago

Yes, this is my first comment in your Hubs.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

Looking forward to hearing more from you. Love your handle!


phdast7 profile image

phdast7 4 years ago from Atlanta, Georgia

Kathleen -- Back for a third read. This is very well done - your research is solid. And it behooves all of us to be clear about what our monetary/financial problems are and who contributed the most to them before we vote in November. Thanks for a great piece.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

Glad to see you back on HP. Tells me things are improving for your son's health! Glad you enjoyed this piece. You are welcome to share it with your students - if appropriate. See you Friday!


adjkp25 profile image

adjkp25 4 years ago from Northern California

Obviously this topic has been widely discussed, debated and distorted in the presidential elections but the numbers you have here are hard to ignore (I'm sure some will still be able to though)

For me it just seems like all of the rules are structured to favor the higher earners and reduce the chance for the ones on the bottom of the scale to better things. Some people with wealth like to use the term class warfare, they are right but not in the way that they think.

Voted up and interesting.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

they are right but not in the way that they think. -amen friend.


phdast7 profile image

phdast7 4 years ago from Atlanta, Georgia

Tomorrow is Election Day. There could not be a more important and revealing essay about where we have been as a nation and where we will be heading based on who we elect as president.

This is a must read for "thinking voters" everywhere.


Freeway Flyer profile image

Freeway Flyer 4 years ago

It's also important to mention that capital gains tax rates are much lower than other forms of income. This benefits the wealthiest, and it helps lead to an economy that rewards speculation rather than wealth creation.

This isn't just an issue of justice. An economy with too much wealth concentration toward the top is not healthy. There simply isn't enough consumer demand.


Debby Bruck profile image

Debby Bruck 4 years ago

Kathleen - Marvelous graphic to begin this article, backed up by facts and figures. So many have replied. Do we ask, "What happened?" or do we want to know how to fix what happened? Something tells me voting won't make an iota of difference. Look at this mess you got me into Ollie? I think it's up to THE PEOPLE to push the envelope and demand some clarity, revolutionary thinking, equality and new boots. The straps won't do anymore. Blessings, Debby


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

Freeway Flyer: "An economy with too much wealth concentration toward the top is not healthy." I think if we haven't learned that in the last 30 years, we never will. And with too many people only concerned with the concentration of their own wealth, we may never learn. Our economical problems shouldn't just be blamed on the last president. It goes back to decisions made beginning around 1980.

phdast7: Thanks for recycling this one. The economic problems are not just a question of our debt. As with most issues, it goes deeper than that.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

Debby Bruck: Thanks for your contribution to the discussion. "How to fix what happened." Which is so much more of a challenge than just picking who to blame. Great point. A little revolution from time to time is a good thing!

There really are two philosophies on what economic direction to take our country and they could not be clearer to the curious student. The question is, do people want to learn or just complain?


TIMETRAVELER2 profile image

TIMETRAVELER2 4 years ago

Kathleen: WOW!!! This article topped off by the graphic was a mind blower. It's also sickening to see what's going on and to think that so many don't know what they can do about the problem. Well, they (like the lady with the Starfish) can do plenty.

First: Demand term limits. No more good old boys making a career out of politics.

Second: Write, constantly, to your local, state and national politicians to share your concerns and demand change.

Third: Make it your life's mission to avoid buying anything manufactured or sold by the big companies.

Fourth: Get your own financial house in order. I see people all the time who are complaining about the economy while drinking beer and smoking cigarettes while playing on their Ipads.

Fifth: Become proactive. Don't just sit back and let others fight the battles...VOTE VOTE VOTE!

A vote is a powerful tool, and the one thing politicians fear most is a large number of people threatening to withhold theirs if things don't change. They will see some of that in today's elections, I'm sure.

When the rich foxes are in the hen houses, they need to be removed. Politicians (who all are attorneys and are wealthy themselves) are not going to pass laws that will harm their own pocketbooks. Why do you think the Reps signed the "no increase in taxes" pledge with Norquist?

Dems are no better, but at least they haven't signed their lives away and do try to make a stab at equalizing things for the middle class.

You are spot on with this hub, and I'm really glad you wrote it. Everybody in this country needs to read it, and you should really try to get it published in syndication so that all of the newspapers will carry it. The word is mightier than the sword.

Congrats on writing a truly meaningful and important hub. Voted up and shared


mperrottet profile image

mperrottet 4 years ago from Pennsauken, NJ

A really great site that concerns this issue is http://americawhatwentwrong.org/

This site grew from the book "The Betrayal of the American Dream" by Barlett and Steel. It outlines how our past 40 years of government policies have allowed jobs to fly out of the country.

This is a great hub, voted up!


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

TIMETRAVELER2: Take these comments and write your own hub - absolutely. You make great points that should be read by a broader audience. Use any material in this hub that you find useful. It all originally came from other sources to create my opinions and you've added a great deal to it.

mperrottet: Welcome to my hubs. There are so many sources on this subject. I'll check this one out. People want to blame Bush II. People want to blame Obama. The blame actually goes back a generation. The point is the learn from our mistakes instead of continuing to make them. Thanks for contributing to this debate.


TIMETRAVELER2 profile image

TIMETRAVELER2 4 years ago

Kathleen: If I do that now, I'll get hit for writing duplicate content, but thanks for the thought.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

I could delete your comment but it would grossly devalue my hub, so in my own shameless self interest I won't. Thanks for the effort. I appreciate it greatly.


HoneyBB profile image

HoneyBB 4 years ago from Illinois

Excellent hub! These same thoughts have been running through my head. When I grew up, most women stayed home and raised their children and it only took one income to raise a family. I come from a family of 12 counting my parents and we didn't have much but we never felt poor. My Dad was able to support us all with his income. He put a roof over our heads and food on our table and we even went on small family trips in the summer. Then, women started working (and I'm not saying there is anything wrong with that whatsoever) all I'm saying is that when that happened, merchants jumped right in to take away all the money they could from the family by raising prices. Now, it became impossible for the average person to buy a home on one income. All of a sudden, it takes two incomes and even then with all the other rising prices, it's difficult to make it work. At the same time, the poor who couldn't even afford a home at all faced higher rents and higher prices on utilities and everything else and many became homeless. The minimum wage couldn't cover the expenses of the bare essentials and with the prices of merchandise/homes/etc going up and the minimum wage barely moving at all more people fell into the poverty status.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

HoneyBB: Welcome to my hubs and thanks for the thoughtful comments. I'm all for women working or staying home as they choose or are able, but I also see the seachange that happened when families started earning two incomes and the price of everything skyrocketed. The marketplace saw money to be made and boy did they ever go after it. Still do.


TIMETRAVELER2 profile image

TIMETRAVELER2 4 years ago

When credit cards appeared, that didn't help things, either!


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

You know what? That was about the same time, wasn't it?


izettl profile image

izettl 4 years ago from The Great Northwest

I would have voted for Obama because I'm in the working class/not even quite as rich as the middle class (which both ROmney and Obama described as $150,00+). Where have they been? I'd love to make even half that for our whole household.

But I just didn't have any evidence in my life that pointed to things being better with Obama. I did not vote for anyone in 2008. The first thing he did in offie was bail out the banks (trickle down politics)to help the "people" well the people still lost their houses. During this time my husband and I were househunting and couldn't get answers from banks on foreclosed homes because they were spinning their wheels- they got bail out money and didn't have to act quick on selling a house that was foreclosed. 8 months to hear back form a bank- they certainly weren't desperate to sell a home. We actually bought a house so you would assume that we benefitted under Obama but I say it was at the expense of a nice hispanic family that lost it and foreclosed. It shouldn't be that one person benefits because someone else lost out. Also gas prices remain extremely high. I have studenbt loan debt I can't even pay because I was sold the Democrat lie of going to school to benefit myself- made less money upon graduatin than before. My daily living has not benefitted from Obama at all.

You are right most politicians are out of touch, including Obama. They go to ivy league colleges...what do they know about the average person. I don't even personally know anyone who has gone to an ivy league college. How can Obama relate to me to even help me... or you? At least ROmney has been succesful and charitable which is what our country needs- someone to help put some money back in our children's future piggy bank. My kids are only 5 and 9 months what do you suppose their social security looks like?


phdast7 profile image

phdast7 4 years ago from Atlanta, Georgia

Dear izzetl - I certainly understand your frustration. All three of my married sons (and their families) are trying to get by on considerably less money than they made five years ago. And gas costs too much, well, so do a lot of things. And I can make no excuse for the banks; their behavior has been selfish and injured a lot of American families. And I too find that Ivy League politicians cannot relate well to the rest of us. But, two statements you made surprise me.

(1) "My daily life has not benefited from Obama." I can believe that, but I think the larger context matters. Recessions can take 4 to 8 years to pull out of. The Bush administration handed the country over to Obama already well into a serious recession. That began "before" Obama took office.

I think that our daily life would not have benefited no matter who took office. It takes a while to dig a country out of a hole, especially when the banks, financiers, Wall Street, and mortgage speculators,

are ripping average folks off while they make big profits.

(2) You commented that "Romney has been successful...put some money in our children's future piggy banks." I don't think he would have done that. Romney has repeatedly made it clear that he wants to preserve tax cuts for the 1% (put more money in the pockets, banks, stock portfolios of the ultra, ultra-rich) and reduce middle and lower class programs.

These are often referred to as"entitlements" -- most of them are not entitlements at all! The word is used to deliberately mislead people and make them angry and upset! You and I pay taxes which support social security, medicare, unemployment insurance, medicaid, etc, etc.

If and when we need to access these programs or services, it is NOT an entitlement...we pay for those programs. So I guess my question would be -- knowing what Romney (and much of the GOP) planned to do -- how would you or your children have been better off? The GOP consistently favors the 1% (or the 5%) at the expense of, and to the detriment of, the rest of us.


Sooner28 4 years ago

Well said.

I would just add, as a comment on the actual hub, that capitalism has always produced a 1% upper class that owns most of the wealth. It's inherent in the system.


Kathleen Cochran profile image

Kathleen Cochran 4 years ago from Atlanta, Georgia Author

izetti: Thanks for your heartfelt comments, though my intention was not to promote one candidate over another. I'm an old reporter and like to put information out there for the general benefit of my readers. Still, I appreciate you expressing your thoughts. I also appreciate phdast7 for responding more efficiently than I could and Sooner28 for adding his information.

Thanks to the three of you. Sometimes the author doesn't have to add a word.


Doodlehead profile image

Doodlehead 3 years ago from Northern California

At the age of six my sat me down to explain "depreciation" of a cow on his income taxes. He said "Linda" (the cow) was worth less this year than she was the year before....(even though she gave more milk).

He told me he had to fill out paper work to explain to the government how much less Linda was and if he did not fill out the paperwork about Linda being worth less he could go to jail.

He told me to learn about taxes. I have done this. It has paid off.

I think learning the tax system would go a long way toward evening things up.

I am not saying it is is a good or a fair tax system. I am saying that since we have this system we can use it if we learn it.

It has helped me make 40% by knowing the more monetarily advantageous way to do a transaction.


Kathleen Cochran profile image

Kathleen Cochran 3 years ago from Atlanta, Georgia Author

You certainly got a leg up on the rest of us. Understanding is a wonderful thing. Fixing, though, is the answer, don't you think?


Kathleen Cochran profile image

Kathleen Cochran 3 years ago from Atlanta, Georgia Author

Wow - I need to read your hubs!


Kathleen Cochran profile image

Kathleen Cochran 3 years ago from Atlanta, Georgia Author

Doodlehead: I appreciate you contributing to this hub. Anyone with something to add is welcome on my sites. I plan to take some time and read some of your articles. I appreciate your point of view.


Thief12 profile image

Thief12 2 years ago from Puerto Rico

Interesting read. Unfortunately, that's what capitalism gets us. Another point I find interesting is how a teacher can earn an average salary of $30-40K while movie stars and athletes earn millions. I mean, what are the priorities?


phdast7 profile image

phdast7 2 years ago from Atlanta, Georgia

Thief 12 - As hardworking college professor who made less that 40K for

most of my career, I really appreciate your comment. Thanks for your support.

Kathleen, I still think this is an excellent article. If I could, I would make all politicians read it, and reread it, and.... Sharing.


RTalloni profile image

RTalloni 2 years ago from the short journey

Interesting right through the comments, offering much food for thought. One of Thief12's comments, "…what are the priorities?' hits the nail on the head.

Someone named Lebron Jones is mentioned in an earlier comment--in sports, I think they said. He and all other movie stars and athletes earn their millions because of how personal responsibility is exercised by masses of people who complain that they don't have enough money.

Choosing to give their money to those entertainers takes a big whack out of people's budgets and that is just one indication that most people have enough money. They are blind to the fact that their real complaint is that they don't have enough money to do everything they want to do.

If people in general didn't have enough money, there wouldn't be so many expensive stores and restaurants open. There would not be so many new cars being built and sold.

Apple would not have sold 150 million iPhones and 71 million iPads in 2013, not to mention all the other companies selling similar devices. Defining enough money might be our real need, but the concepts surround that are too big for a comment! :-)

We should be involved politically to encourage problem solving by our government. Finding the right definition of problem solving is another main issue because the bigger government grows, the bigger people's problems become.

In America the government (so to speak) is not only at fault. Generations of people who look to someone else to provide for their needs would only naturally create an environment that would let a government grow like ours has.

On that note, it's important to know that there are some organizations that are in the business of helping people help themselves:

Dave Ramsey's program

http://www.daveramsey.com/home/

and

Dan Miller's 48 Days, LLC

http://www.48days.com

both have a track record of helping people take responsibility for their own lives so they can live independently and (this next is an important focus of the programs) so they will have the means to effectively reach out and help those around them who are in true need, truly unable to help themselves. (Imagine how government/taxes could be reduced if everyone did that!)

By comparison, these type of organizations are not as big as government agencies/programs, but their philosophies and methods are open to everyone who is willing to take responsibility for their own lives. Relatively few people take the opportunity to make the needed changes in the way they live, though.

If we had a nation of people doing so and becoming involved in the political system (particularly with a focus on reducing its size) while teaching future generations how to do the same (rather than seeking to constantly self-indulge) we might see amazing changes in our society.

All that the issues are wrapped in is so thought-provoking that it could be overwhelming, so discussions are important. Thanks for opening one up here. I also am going to check out Doodlehad's posts on this rare-for-us snow day, but only after I go outside for a while. The sounds of children playing across the hill are reaching my ears and I want to build my own snowman! :)


Kathleen Cochran profile image

Kathleen Cochran 2 years ago from Atlanta, Georgia Author

RTalloni: I think you've written a hub of your own here worthy of its own discussion. Thanks for putting so much thought into your comment. How'd your snowman turn out?


Kathleen Cochran profile image

Kathleen Cochran 2 years ago from Atlanta, Georgia Author

Thief 12 and phdast7: A appreciate your points of view and your comments. Reasonable people can differ in their opinions, but it's hard to argue with hard data.


RTalloni profile image

RTalloni 2 years ago from the short journey

Being from Florida, snow is still a novelty to me, so I was amazed to find that it was very much like sand this afternoon. If I could post photos here I would show you my pyramidish snowman. :)

BTW, as lame as he was, he told me something today. As I poured bowls of sand-like snow and tried to pack them together, most of those individual snowflakes refused to work. Each one wanted someone else to do the job that needed doing. If they had been willing to work at their job, even though it wasn't glamorous, we could have built a magnificent snowman.

Instead, they wanted to be equal as in the same rather than equal in importance regarding the job they needed to do, and sure enough, most of them spread themselves equally out on the ground in insignificance. They simply would not sacrifice what they wanted at the moment in order to work to better themselves.

Maybe they cared more about what others might think, maybe they had been bamboozled into thinking that a government somewhere could take care of them. Whatever they were thinking, they got their way and are now in a non-distinct group of endless individuals leveled out to be trampled into the ground, while those who used their individual strengths to work and build an empire have something that others can build on in the future (since it will be snowing all night and into tomorrow).

Yes, some are at the top, but they know that without the foundation, they wouldn't be there. They all understand that they are equal in importance no matter what their job is and that if they chose to be equally the same, they would lose their corporate magnificence.

I know, it's a lame object lesson with a few holes that weaken it, and it's a make believe snow-world, but it's some food for thought… :)


rjbatty profile image

rjbatty 2 years ago from Irvine

I read an article by Robert Reich in The Huffington Post that parallels many of the points you raised. His conclusion was that this trend cannot continue, and I tend to agree. He posits two conclusions -- a change that comes about through violent means and the other through diplomacy. Of course, he hopes for a diplomatic outcome. Let's hope he's right. I think we're in store for some stormy times.


Kathleen Cochran profile image

Kathleen Cochran 2 years ago from Atlanta, Georgia Author

rjbatty: Thanks for the confirmation especially since a few readers seemed to miss the point. This hub is not about people who work or not. It's about disturbing facts that reflect a sea change in American policies over a generation that impacts most people no matter how hard they work.


Kathleen Cochran profile image

Kathleen Cochran 2 years ago from Atlanta, Georgia Author

Just added a revealing video to this oft-viewed hub. If you are a first-time reader or a return reader, let me know what you think of it, please?


Rusti Mccollum profile image

Rusti Mccollum 2 years ago from Lake Oswego, Oregon

I agree with e eery thing you said .My husband makes good money YET we went from vacations to being behind on our mortgage. HOW did that happen? Last year I uncovered some creative accounting by the IRS and have YET to get my money back. they say don't blame the president well I can't think of ONE thing he has DONE in all these years to help honest hard working Americans. My dad worked 47 years for gas co. Lived paycheck to paycheck. Hate to say it but we lived great during Clinton administration after that it all went to crap. This is JUST MY OPINION FOLKS no debate necessary.I am an American an invoked mty right to express my opinion without a fight. Great hub it invoked a very strong response from me!


Kathleen Cochran profile image

Kathleen Cochran 2 years ago from Atlanta, Georgia Author

Rusti: Your opinion is welcome here with no fight necessary, whether I totally agree or not. For one thing, we may have lived better during the Clinton years because we balanced the budget. Maybe another Clinton could do it again.


creativelycc profile image

creativelycc 22 months ago from Maine

What an excellent hub! I knew there was a significant gap - but not that big of a gap - Wow! This country needs to do something drastically different. I agree with you that we are working more hours and it only gets harder to pay our bills. I've been working as a registered nurse for almost 20 years now and it's still a struggle.


PegCole17 profile image

PegCole17 22 months ago from Dallas, Texas

Yes, there does seem to be a lot of tax loop holes that protect people who have a lot of money. Yet, I think it's more about where our taxes are being spent than about who has the money in this country.

This country was built on the premise of the American Dream: work hard, save your money and get ahead. Once you're ahead people resent your wealth, despite the fact that you may have worked all your life to earn it.

It is getting harder to achieve the American Dream. Maybe it's because we're supporting so many who don't have the work ethic and expect others to provide for their daily needs. Or perhaps it's because we're allowing non-citizens to take the tax dollars imposed on the middle class and support their needs. Or perhaps it's because we give away billions of dollars to other nations so that they will be our friends.

From Newsmax, " The CIS report shows that the United States was home to a record 41.3 million legal and illegal immigrants last year. That was up nearly 1.4 million from the 39.9 million in 2010, while the number was 31.1 million in 2000.

By comparison, the U.S. immigrant population stood at 9.6 million in 1970."

Seems like we're headed in the wrong direction.


AudreyHowitt profile image

AudreyHowitt 3 months ago from California

Well written, well researched and really well done!


Kathleen Cochran profile image

Kathleen Cochran 3 months ago from Atlanta, Georgia Author

Thanks Audrey. Glad you found this one!


Cyndi10 profile image

Cyndi10 14 hours ago from Georgia

Hello Kathleen, This was relevant five years ago and of course it's relevant now. There were so many good, thoughtful comments here. It is such a complex issue with may contributing factors even beyond what you have written here. So I'll just leave it at well done. Take care.


Kathleen Cochran profile image

Kathleen Cochran 13 hours ago from Atlanta, Georgia Author

Cyndi10, Thanks. I reposted it in response to a comment in a forum. I hope that hubber sees it. Many like to think our problems just came out of nowhere, but like most things, they grew from past decisions and actions, sometimes with unintended consequences and sometimes with the outcome some groups planned.

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