Is Income Inequality Unjust?

In recent years, individuals concerned with social justice have identified the rapidly rising income of the wealthiest in the country as a serious problem. They claim the lower and middle classes are becoming increasingly disadvantaged due to record incomes among those in the top one percent of earners nationally. Indeed, IRS data suggest the top one percent of taxpayers accounted for 20 percent of total pretax income in 2008. By contrast, they accounted for only 11 percent in 1986. 

Those concerned with income inequality argue further that the gap also affects America’s social cohesion. Case in point, broad coalitions consisting of union members, students, and others expressed dissatisfaction with the growing rift last summer at protests organized by the Occupy Wall Street movement.

On the other hand, others wonder whether growing income inequality even matters. They reject the idea that the gap can be a sign of poorer living standards for lower and middle-income individuals and families, arguing instead that just because the top one percent are making more doesn’t necessarily mean others are making less or that the middle class is shrinking. The gap, they say, is simply a number that says little about people’s improving lifestyles over the decades. Instead of being concerned with how much money the top earners are making, we should rejoice in the mass availability of goods and services unimaginable to people at any other point in human history. Furthermore, they argue data from the IRS and other sources actually overstate the difference between incomes among the top, middle, and bottom, pointing to differences in the way the tax code has changed to account for income.

Weigh in: Is income inequality an important issue of social justice that only government can address, or is it an insignificant statistic being used to make redistribution policies more popular?

Photo Credit: Wikimedia Commons

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Richard Lorenc

Libertarian (classical liberal), entrepreneur, big cat enthusiast, Apple-head, Trekkie, double bass player. I direct programs at the Foundation for Economic Education (FEE), which teaches young people the economic, legal, and ethical principles that make free societies prosperous. He serves on the board of directors of the Coalition to Reduce Spending, an advocacy group dedicated to limiting federal spending through programs such as the "Reject the Debt" anti-spending pledge. He is also a member of the Leadership Committee of Young Conservatives for the Freedom to Marry.

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