“The Myth of American Inequality”
by Phil Gramm, Robert Ekelund and John Early
Rowman & Littlefield 2022
In the best Andy Rooney skeptical style of observation of “Have you ever noticed,” the book’s cover sheet introduction page begins with “Everything you know about income inequality, poverty and other measures of economic well-being in America is wrong…..”
So, buckle up and comprehend how the US Census Bureau methods of counting income and the five quintiles of population income ranking is skewed and biased from old parameters (1947) counting of income, what is household formation, and as such misrepresents how things are on the ground.
The census does not count SNAP, Medicare and Medicaid, earned income tax credits, welfare payments, other Federal, State and Local government disbursements, etc. as “income received.” These programs flow to the lowest quintile or bottom 20% of income, and less to the 2nd quintile. These payments or government transfers are mostly paid by taxes from the top quintile. Most of their income is in the form of earned income (W2) and is withheld from paychecks so it is not seen by the top quintile earners.
Under current reporting, the income disparity is commonly claimed to be 17 to 1. When tried up with the fact of Federal transfers and withheld taxes or money not received, the tried up rate is about 4 to 1.
Deep in objective math, charts and observation, yet highly readable it is well worth your quiet time to do the read here.
It answers your question of “I’m paying a hell of a lot of taxes, and I know it’s gotta’ be going somewhere.”
Well, here you go. Again, it’s a math based and objective factfinding book and will arm you in blowing up your liberal friend’s screed of income inequality at the next BBQ.