Income Inequality News StoriesExcerpts of Key Income Inequality News Stories in Major Media
Note: This comprehensive list of income inequality news stories is usually updated once a week. Explore our full index to revealing excerpts of key major media news stories on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.
India declared a 21-day lockdown with four hours notice on the midnight of 24 March to prevent the spread of coronavirus. All over India, millions of migrant workers are fleeing its shuttered cities and trekking home to their villages. These informal workers are the backbone of the big city economy. Escaping poverty in their villages, most of the estimated 100 million of them live in squalid housing in congested urban ghettos. Last week's lockdown turned them into refugees overnight. Their workplaces were shut, and most employees and contractors who paid them vanished. Sprawled together, men, women and children began their journeys at all hours of the day last week. When the children were too tired to walk, their parents carried them on their shoulders. Clearly, a lockdown to stave off a pandemic is turning into a humanitarian crisis. In the end, India is facing daunting and predictable challenges in enforcing the lockdown and also making sure the poor and homeless are not fatally hurt. India has already announced a $22bn relief package for those affected by the lockdown. The next few days will determine whether the states are able to transport the workers home or keep them in the cities and provide them with food and money. "People are forgetting the big stakes amid the drama of the consequences of the lockdown: the risk of millions of people dying," says Nitin Pai of Takshashila Institution, a prominent think tank. "There too, likely the worst affected will be the poor."
Note: In how many countries besides India is this scenario playing out? For more along these lines, see concise summaries of deeply revealing news articles on government corruption and the coronavirus pandemic from reliable major media sources.
For nearly 20 years, Dolores Acevedo-Garcia has been collecting data on the access—and lack thereof—that children in neighborhoods across the U.S. have to necessities like healthy food and a good education. She and her team ... manage diversitydatakids.org, a data project designed to guide the high-level policy decisions that affect childhood and equality. In January, Acevedo-Garcia and her team published the latest edition of the Child Opportunity Index, an ambitious project that takes a deep look at 47,000 neighborhoods across the 100 largest U.S. metro areas, scoring them from 1 to 100, where a higher number means more childhood opportunity based on 29 key measures. Many of the more diverse metro areas in the U.S., especially cities with large black populations, have enormous opportunity gaps; the few diverse cities with small gaps tend to have low opportunity scores overall. “It’s hard to find a place that is equitable and racially diverse,” says Acevedo-Garcia. In all 100 metro areas ... combined, white children live in neighborhoods with a median score of 73, compared with neighborhood scores of 72 for Asian children, 33 for Hispanic children and 24 for black children. Black and Hispanic kids live with less opportunity than their white and Asian peers almost without exception. Milwaukee and its surrounding area has the widest racial disparity in the U.S.. A white child there lives ... with a median opportunity score of 85. For a black child, the median neighborhood score is 6.
Note: For more along these lines, see concise summaries of deeply revealing news articles on income inequality from reliable major media sources.
A bookkeeping change at the Education Department will kick hundreds of rural school districts out of a federal program that for nearly two decades has funneled funding to some of the most geographically isolated and cash-strapped schools in the United States. More than 800 schools stand to lose thousands of dollars from the Rural and Low-Income School Program because the department has abruptly changed how districts are to report how many of their students live in poverty. The change ... comes after the Education Department said a review of the program revealed that districts had “erroneously” received funding because they had not met eligibility requirements outlined in the federal education law since 2002. The department said it was simply following the law, which requires that in order to get funding, districts must use data from the Census Bureau’s Small Area Income and Poverty Estimates to determine whether 20 percent of their area’s school-age children live below the poverty line. For about 17 years though, the department has allowed schools to use the percentage of students who qualify for federally subsidized free and reduced-price meals, a common proxy for school poverty rates. In its latest report, “Why Rural Matters,” the Rural School and Community Trust found that ... nearly one in six students living in rural areas lives below the poverty line, one in seven qualifies for special education services, and one in nine has changed residence in the previous 12 months.
Note: For more along these lines, see concise summaries of deeply revealing news articles on income inequality from reliable major media sources.
The percentage of national income that is absorbed by health care has grown over the past half-century, from 5% in 1960 to 18% in 2017, reducing what is available for anything else from 95% in 1960 to 82% today. The costs of health care contribute to the long-term stagnation in wages; to fewer good jobs, especially for less educated workers; and to rising income inequality. American health care is the most expensive in the world, and yet American health is among the worst among rich countries. The U.S. has lower life expectancy than the other wealthy countries but vastly higher expenditures per person. In 2017, the Swiss lived 5.1 years longer than Americans but spent 30% less per person; other countries achieved a similar length of life for still fewer health dollars. How is it possible that Americans pay so much and get so little? The money is certainly going somewhere. What is waste to a patient is income to a provider. The industry is not very good at promoting health, but it excels at promoting wealth among health care providers. Employer-based coverage is a huge barrier to reform. So is the way that the health care industry is protected in Washington by its lobbyists—five for every member of Congress. Our government is complicit in an extortion that is an important contributor to income inequality. Through pharma companies that get rich by addicting people, and through excessive costs that lower wages and eliminate good jobs, the industry that is supposed to improve our health is undermining it.
Note: For more along these lines, see concise summaries of deeply revealing news articles on health from reliable major media sources.
The criminal justice system has given up all pretense that the crimes of the wealthy are worth taking seriously. In January 2019, white-collar prosecutions fell to their lowest level since researchers started tracking them in 1998. Since 2015, criminal penalties levied by the Justice Department have fallen from $3.6 billion to roughly $110 million. Illicit profits seized by the Securities and Exchange Commission have reportedly dropped by more than half. In 2018, a year when nearly 19,000 people were sentenced in federal court for drug crimes alone, prosecutors convicted just 37 corporate criminals. Tax evasion ... siphons up to 10,000 times more money out of the U.S. economy every year than bank robberies. In 2017, researchers estimated that fraud by America’s largest corporations cost Americans up to $360 billion annually between 1996 and 2004. That’s roughly two decades’ worth of street crime every single year. Over the last four decades, the agencies responsible for investigating elite and white-collar crime ... have seen their enforcement divisions starved into irrelevance. More than a third of the FBI investigators who patrol Wall Street were reassigned between 2001 and 2008. Even though auditing millionaires and billionaires is one of the most cost-effective government activities imaginable—an independent report estimated in 2014 that it yielded up to $4,545 in recovered revenue per hour of staff time—the IRS investigated the returns of just 3 percent of American millionaires in 2017.
Getting audited by the IRS is increasingly less certain. An audit is about half as likely as it was five years ago. Even so, some groups face higher audit rates than others. The tax agency is auditing fewer individual taxpayers not because we’re more honest, but because the IRS is working with fewer employees. The agency’s workforce has dropped from 94,000 workers in 2010 to roughly 78,000 in the most recent fiscal year, according to IRS data. With fewer agents available to perform audits, the agency’s audit rate has been whittled to 0.45% of individual returns in fiscal 2019, the IRS said. That compares with an audit rate of 0.9% in the fiscal 2014. Two types of taxpayers are more likely to draw the attention of the IRS: the rich and the poor, according to IRS data of audits by income range. Poor taxpayers, or those earning less than $25,000 annually, have an audit rate of 0.69% — more than 50% higher than the overall audit rate. Low-income taxpayers are more likely to get audited than any other group, except Americans with incomes of more than $500,000. The least likely group to get audited? That would be upper-middle-class households with an annual income of $100,000 to $200,000. Low-income households are more likely to get audited than some wealthier taxpayers ... due to the IRS checking for fraud and errors related to the Earned Income Tax Credit. Americans with annual incomes of more than $10 million have enjoyed a 75% decline in audit rates since 2013.
The world's 2,153 billionaires have more wealth between them than a combined 4.6 billion people, new research has claimed. In a study published Monday, international charity Oxfam called on governments to implement policies that may help to reduce wealth inequality. The report comes as delegates gather in Davos, Switzerland, for the annual World Economic Forum conference. Oxfam's report noted that someone who saved $10,000 a day since the construction of the Egyptian pyramids would still be 80% less wealthy than the world's five richest billionaires. Oxfam urged policymakers to increase taxes on the world's wealthiest by 0.5% over the next decade in a bid to reduce wealth inequality. A 0.5% increase in taxes on the wealthy would generate enough funding to create 117 million jobs in sectors like education and health, according to the researchers. Other suggestions made by Oxfam to help mitigate inequality included investing in national care systems, challenging sexism, introducing laws to protect carers' rights, and ending extreme wealth. "Extreme wealth is a sign of a failing economic system," the report said. "Governments must take steps to radically reduce the gap between the rich and the rest of society and prioritize the wellbeing of all citizens over unsustainable growth and profit." The call for a tax overhaul reinforces the charity's message ahead of last year's WEF summit, when Oxfam urged governments to hike tax rates for corporations and society's richest to reduce wealth disparity.
Note: For more along these lines, see concise summaries of deeply revealing news articles on income inequality from reliable major media sources.
More than 10 years after the housing crash that devastated the economy, people are still debating just what happened. Although the economy and the housing market have made a comeback, homeownership remains low. Aaron Glantz, a prize-winning investigative journalist ... set out to explain why, in "Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream." Eight million Americans lost their homes in the bust. Where did those homes go? Those houses didn’t just disappear. Who won, when everyone else lost? The people who won - a small group of businessmen who pounced to seize thousands of homes and made billions of dollars - they’re the “homewreckers.” But even though the housing bust is over, the nation’s homeownership rate is at its lowest in 50 years, and continues to go down. It helps explain why people feel so uneasy. As long as the unemployment rate is low and people have jobs and they can afford rents, the financial market is secure. If people lose their jobs, what’s going to happen? We could be back in another housing bust. Right now there’s a real crisis of affordability. People think we don’t have enough inventory because we haven’t built enough houses. Only 10 years ago, our country was awash in real estate. We have to ask ourselves if we really have a housing shortage, or if we have rigged the market so it only benefits a few of the players.
Emmanuel Saez and Gabriel Zucman say we’re coddling “a tiny minority of ultra-rich” Americans, and they’d like to put a stop to it. “The Triumph of Injustice” demonstrates how small sets of wealthy, white, well-connected citizens command inordinate financial and political clout. This, it seems, is the season for such books. Investigative reporter Aaron Glantz’s “Homewreckers” focuses on billionaires who cash in when the middle class struggles. Anne Nelson’s “Shadow Network” is about a coterie of influential far-right operatives. Taken together, these smart, engrossing titles paint a stark picture of the power wielded by a handful of plutocrats and religious hard-liners. There’s always been economic inequality, but it’s worse today than just decades ago. According to Saez and Zucman, America’s richest 1% own 37% of the nation’s wealth (“housing, pension funds, and all financial assets”), up from 22% at the end of the 1970s. “Conversely, the wealth share of the bottom 90% of adults has declined from 40% to 27%.” Counting all forms of taxation, Saez and Zucman say that the great majority of Americans pay 25% to 30% of their income in taxes into the public coffers. By contrast, America’s 400 richest people “barely pay 20%.” This disparity is the result of many factors. These include ... access to “offshore bank accounts, exotic trusts (and) hidden shell corporations,” Saez and Zucman write. Corporations use similar tactics. Facebook, for one, “has dodged billions in corporate taxes” by establishing a presence in the Cayman Islands.
The Senate will be voting this week on the Trump military budget, which calls for a massive increase in defense spending. I strongly oppose this legislation. At a time when we have massive levels of income and wealth inequality; when half of our people are living paycheck to paycheck; when more than 500,000 Americans are homeless; and when public schools throughout the country are struggling to pay their teachers a livable salary, it is time to change our national priorities. I find it ironic that when I and other progressive members of Congress propose legislation to address the many unmet needs of workers, the elderly, the children, the sick and the poor, we are invariably asked, “How will we pay for it?” Yet we rarely hear that question with regard to huge increases in military spending, tax breaks for billionaires or massive subsidies for the fossil fuel industry. When it comes to giving the Pentagon $738 billion — even more money than it requested — there is a deafening silence within Congress and the ruling elites about what our nation can and cannot afford. When I talk about changing national priorities, I’m talking about the fact that the $120 billion increase in Pentagon spending — compared with the final year of the Obama administration — could have made every public college, university, trade school and apprenticeship program in the United States tuition free, eliminated homelessness and provided universal school meals to every kid in our nation’s public schools.
Note: The above article was written by Bernie Sanders. For more along these lines, see concise summaries of deeply revealing news articles on government corruption and income inequality from reliable major media sources.
The political and economic power wielded by the approximately 750 wealthiest people in America has become a sudden flash point in the 2020 presidential election, as the nation’s billionaires push back with increasing ferocity against calls by liberal politicians to vastly reduce their fortunes and clout. On Thursday, Michael Bloomberg, a billionaire and former mayor of New York City, took steps to enter the presidential race, a move that would make him one of four billionaires who either plan to seek or have expressed interest in seeking the nation’s highest office in 2020. His decision came one week after Sen. Elizabeth Warren (D-Mass.) proposed vastly expanding her “wealth tax” on the nation’s biggest wealth holders and one month after Sen. Bernie Sanders (I-Vt.) said America should not have any billionaires at all. The leaders of the anti-billionaire populist surge, Warren and Sanders, have cast their plans to vastly increase taxes on the wealthy as necessary to fix several decades of widening inequality. Financial disparities between the rich and everyone else have widened over the past several decades in America, with inequality returning to levels not seen since the 1920s, as the richest 400 Americans now control more wealth than the bottom 60 percent of the wealth distribution. At least 16 billionaires have in recent months spoken out against what they regard as the danger posed by the populist Democrats, particularly over their proposals to enact a “wealth tax” on vast fortunes.
The U.S.’s historic economic expansion has so enriched one-percenters they now hold almost as much wealth as the middle- and upper-middle classes combined. The top 1% of American households have enjoyed huge returns in the stock market in the past decade, to the point that they now control more than half of the equity in U.S. public and private companies, according to data from the Federal Reserve. The very richest had assets of about $35.4 trillion in the second quarter, or just shy of the $36.9 trillion held by the tens of millions of people who make up ... much of the middle and upper-middle classes. It may not be long before one-percenters actually surpass the middle and upper-middle classes. Household wealth in the upper-most bracket grew by $650 billion in the second quarter of 2019, while Americans in the 50th to 90th percentiles saw a $210 billion gain. By another measurement the top 1% of taxpayers had incomes starting at $515,371 in 2017, according to the latest Internal Revenue Service data. For now, those Americans in 90th to 99th percentiles - well-to-do, but not the super rich - still control the biggest share of wealth, with $42.6 trillion in assets. The lone group left out of the fun: the bottom 50% of Americans. Those households have 35.7% of liabilities in the U.S. and just 6.1% of assets.
Hitting back against presidential candidate Bernie Sanders’s assertion that billionaires should not exist – and his calls to tax their wealth at much higher rates – Facebook CEO Mark Zuckerberg, worth $70bn, took to Fox News to defend his beleaguered class. Billionaires, he argued, should not exist in a “cosmic sense,” but in reality most of them are simply “people who do really good things and kind of help a lot of other people. And you get well compensated for that.” He warned too about the dangers of ceding too much control over their wealth to the government, allegedly bound to stifle innovation and competition. Zuckerberg’s reasoning isn’t unique among the 1%. As common as this argument is, it also happens not to be true. Take the basis of Mark Zuckerberg’s fortune. The internet was developed out of a small Pentagon network intended to allow the military to exchange information during the Cold War. And of the top 88 innovations rated by R & D Magazine as the most important between 1971 and 2006, economists Fred Block and Matthew Keller have found that 77 were the beneficiaries of substantial federal research funding, particularly in early stage development. This isn’t all to say that the private sector hasn’t played a significant role in driving innovation. But the the fortunes built off of each couldn’t exist were it not for the government more often than not taking the first step, funding innovation far riskier than venture capitalists and angel investors can usually stomach.
Why the audit rate for the rich is falling: Congressional Republicans cut IRS spending after the party took control of the House in 2011 in an effort to reduce wasteful spending. The agency also drew criticism from Republicans after the IRS said it targeted some conservative nonprofit groups in 2013. Adjusted for inflation, the 2019 IRS budget is 19% below its funding in 2010, according to the Government Accountability Office, which means fewer auditors. While most audits are done via computer, the process is far more complex for big earners, which involves more people with specialized knowledge, said Julie Roin ... at the University of Chicago. “Most people with $10 million or more are running businesses or have business interests on the side, so their income is coming from sources that are harder to audit and their deductions are coming from sources that are harder to audit,” Roin said. Why isn’t the audit rate for poorer Americans falling at the same rate? Concerned with fraud, Congress has made it a priority to audit filers claiming the Earned Income Tax Credit, an anti-poverty program that gives low-to-moderate working Americans money back on their taxes. In 2018, 25% of taxpayers who received EITC money didn’t actually qualify. Although, ProPublica reported, the law is so complex that many erroneous EITC claims are mistakes rather than outright fraud. More than a third of all audits are of EITC recipients, according to ProPublica. And now, the counties with the highest audit rates are predominantly poor.
For the first time on record, the 400 wealthiest Americans last year paid a lower total tax rate — spanning federal, state and local taxes — than any other income group, according to newly released data. That’s a sharp change from the 1950s and 1960s, when the wealthy paid vastly higher tax rates than the middle class or poor. Since then, taxes that hit the wealthiest the hardest — like the estate tax and corporate tax — have plummeted, while tax avoidance has become more common. President Trump’s 2017 tax cut, which was largely a handout to the rich, plays a role, too. It helped push the tax rate on the 400 wealthiest households below the rates for almost everyone else. The overall tax rate on the richest 400 households last year was only 23 percent, meaning that their combined tax payments equaled less than one quarter of their total income. This overall rate was 70 percent in 1950 and 47 percent in 1980. For middle-class and poor families, the picture is different. Federal income taxes have also declined modestly for these families, but they haven’t benefited much if at all from the decline in the corporate tax or estate tax. And they now pay more in payroll taxes (which finance Medicare and Social Security) than in the past. Over all, their taxes have remained fairly flat. The combined result is that over the last 75 years the United States tax system has become radically less progressive.
A new book-length study on the tax burden of the ultrarich begins with a startling finding: In 2018, for the first time in history, America’s richest billionaires paid a lower effective tax rate than the working class. “The Triumph of Injustice,” by economists Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley, presents a first-of-its kind analysis of Americans’ effective tax rates since the 1960s. It finds that in 2018, the average effective tax rate paid by the richest 400 families in the country was 23 percent, a full percentage point lower than the 24.2 percent rate paid by the bottom half of American households. In 1980, by contrast, the 400 richest had an effective tax rate of 47 percent. In 1960, that rate was as high as 56 percent. The effective tax rate paid by the bottom 50 percent, by contrast, has changed little over time. The tipping point came in 2017, with the passage of the Tax Cuts and Jobs Act. The legislation, championed by President Trump and then-House Speaker Paul D. Ryan (R-Wis.), was a windfall for the wealthy: It lowered the top income tax bracket and slashed the corporate tax rate. By 2018, according to Saez and Zucman, the rich were already enjoying the fruits of that legislation: The average effective tax rate paid by the top 0.1 percent of households dropped by 2.5 percentage points. The benefits promised by the bill’s supporters — higher rates of growth and business investment and a shrinking deficit — have largely failed to materialize.
Since the Reagan administration, Republicans have fervently claimed lower taxes will unleash the "makers" — incentivizing them to work harder and invest more, thereby trickling down to benefit ordinary Americans. Moreover, they have consistently claimed that their tax cuts would create such dramatic economic growth that they’d literally pay for themselves. Instead, the national debt is at a record high, and the gap between the richest and the poorest U.S. households is now the largest it has been in the 52 years the Census Bureau has been tracking it. And that inequality gap started to expand dramatically about the same time the Republican Party started cutting taxes. The American economy since 1950 offers a chance to consider the impact of these tax cuts. From 1950 to 1980, the top federal marginal tax rates ... were as high as 92% and never below 70%. Republicans have been slashing the top tax bracket for annual earned income since the early 1980s, and it is now 37%. Further, in 2003 the GOP shrank the tax rate on unearned income (such as dividends) to 15%, resulting (for example) in the billionaire Warren Buffett having a lower tax rate than his secretary. With such dramatic tax cuts, GOP dogma predicted a booming U.S. economy. But it turns out U.S. economic growth was substantially higher during the period of high taxes. From 1950 to 1980, average annual growth in real (inflation-adjusted gross domestic product) was 3.9%, while from 1981 to 2018 the comparable number was 2.7%.
Taxpayers in rural, poor parts of the U.S. are more likely be audited by the Internal Revenue Service than those living in wealthier counties, according to a new analysis. The county where residents are most likely to face an audit: tiny Humphreys County, Mississippi, where the median household income is less than $24,000 a year, or less than half the income of a typical U.S. family. The higher audit rates in poor regions comes down to an IRS policy of scrutinizing taxpayers who claim the Earned Income Tax Credit, or EITC, a refundable tax credit aimed at low- and moderate-income Americans. Counties with higher-than-average audit rates tend to be located in the South, the northern Plains, Mountain and Western states. The upper Midwest, Mid-Atlantic and New England states have lower audit rates. Many of the counties with the highest IRS audit rates have larger minority populations. That includes Humphreys, where 3 of every 4 residents is black. By comparison ... Denali, Alaska, with the lowest audit rate of all U.S. counties, is 84 percent white and has a median household income of more than $83,000. Audit rates for millionaires have declined by half since 2010. Corporate audits are also on the wane. But the audit rates for people who claim the EITC hasn't fallen as sharply as for the rich and corporations, ProPublica reported in December. That means a typical EITC claimant, who earns less than $20,000 per year, is more likely to face an audit than a millionaire.
The gap between the haves and have-nots in the United States grew last year to its highest level in more than 50 years. Income inequality in the United States expanded from 2017 to 2018, with several heartland states among the leaders of the increase, even though several wealthy coastal states still had the most inequality overall, according to figures released Thursday by the U.S. Census Bureau. The nation's Gini Index, which measures income inequality, has been rising steadily over the past five decades. The Gini Index grew from 0.482 in 2017 to 0.485 last year, according to the bureau's 1-year American Community Survey data. The Gini Index is on a scale of 0 to 1; a score of "0" indicates perfect equality, while a score of "1" indicates perfect inequality, where one household has all the income. The inequality expansion last year took place at the same time median household income nationwide increased to almost $62,000 last year, the highest ever measured by the American Community Survey. But the 0.8% income increase from 2017 to 2018 was much smaller compared to increases in the previous three years, according to the bureau. Even though household income increased, it was distributed unevenly, with the wealthiest helped out possibly by a tax cut passed by Congress in 2017, said Hector Sandoval, an economist at the University of Florida.
Gabriel Zucman started his first real job the Monday after the collapse of Lehman Brothers. A decade later, Zucman, 32, is an assistant professor at the University of California at Berkeley and the world’s foremost expert on where the wealthy hide their money. His doctoral thesis ... exposed trillions of dollars’ worth of tax evasion by the global rich. For his most influential work, he teamed up with his Berkeley colleague Emmanuel Saez. Their 2016 paper, “Wealth Inequality in the United States Since 1913,” distilled a century of data to answer one of modern capitalism’s murkiest mysteries: How rich are the rich in the world’s wealthiest nation? The answer - far richer than previously imagined - thrust the pair deep into the American debate over inequality. Zucman and Saez’s latest estimates show that the top 0.1% of taxpayers - about 170,000 families in a country of 330 million people - control 20% of American wealth, the highest share since 1929. The top 1% control 39% of U.S. wealth, and the bottom 90% have only 26%. The bottom half of Americans combined have a negative net worth. The shift in wealth concentration over time charts as a U, dropping rapidly through the Great Depression and World War II, staying low through the 1960s and ’70s, and surging after the ’80s as middle-class wealth rolled in the opposite direction. Zucman has also found that multinational corporations move 40% of their foreign profits, about $600 billion a year, out of the countries where their money was made and into lower-tax jurisdictions.
Important Note: Explore our full index to revealing excerpts of key major media news stories on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.