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Blog: Ways to Address Budget Deficits AND the Wealth Gap

Jun 27, 2011 | By Stephanie Niedringhaus

Despite political posturing by some, we are encouraged by the growing realization that addressing our nation’s wealth gap AND budget deficits must include much-needed reforms of tax code provisions that currently “blow out the deficit and enable big earners to avoid paying their fair shares” (Washington Post, 6/26/11). Read the lead editorial in the Washington Post to learn more:

The Washington Post

June 26, 2011

http://www.washingtonpost.com/opinions/what-government-can-do-about-the-income-gap/2011/06/22/AGJB51kH_story.html

What government can do about the income gap

Editorial

THERE’S NOTHING NEW, alas, about the increasing gap between rich and poor in America, where the share of national income, including capital gains, claimed by the top 0.1 percent of earners rose from 2.5 percent in 1975 to 10.4 percent in 2008. Still, the details never cease to amaze. In a recent Post report, Peter Whoriskey documented the fact that the average executive’s annual pay has roughly quadrupled since the early 1970s, while average wage income has crept up only 26 percent. No one who cares about the social cohesion of a society premised on the idea that all men and women are created equal can view such statistics indifferently.

The question, though, is what to do about it. Some of the growing income disparity results from long-term social changes or market forces that are either inherently benign or practically irreversible. The statistics partly reflect the spiraling rewards to superstar talent in entertainment and sports. The golden age of U.S. income equality — from World War II to the 1973 Middle East oil embargo — stands out as an exceptional time when American wage workers were still mostly shielded from Asian and European competition.

Corporate executives make up three-fifths of the richest 0.1 percent of U.S. earners, a result of the explosion of executive compensation. Government has a role in fixing this situation, but it’s worth recalling past efforts at regulating pay. In 1993, Congress ended the ta