Wealth is increasingly concentrated among a few elites in the United States.
The World Inequality Database shows that the wealthiest 10% of Americans control 71.2%, one of the most extreme levels of inequality in the world.
The growing gap has led to renewed discussion about the tax policy and social spending of the United States, particularly in light recent Republican budget plans that favor the wealthy.
Experts warn against the current trend that could trap millions of Americans in a poverty cycle.
While the Republican-led Senate, House and other agencies are working to reconcile budget plans, policymakers and economists have raised alarms over the provisions which cut funding for vital social services and give billions of dollars in tax breaks to wealthy individuals and companies.
The increasing gap and changing nature of the world
Sarah Thompson, PhD, an economist who specializes in the distribution of wealth and labor, has criticized these proposed reductions.
The budget cuts safety nets that protect lower-income Americans, while giving new tax incentives worth $10 billion to the richest Americans. The approach taken will worsen economic mobility and the wealth gap.
Statista’s data shows that the Republican Budget proposal aims to extend the provisions of 2017 Tax Cuts and Jobs Act.
The extension would lead to a $3.6 trillion tax cut through 2034 if passed.
Tax relief of $900 billion will be provided to companies and individuals who earn more than $400,000 per year.
The tax cuts would have to be offset with a reduction in the social expenditure.
Medicaid may face cutbacks up to $880 Billion, the Supplemental Food Assistance Program (SNAP), could see cuts as high as $230 Billion, and student loan subsides could drop by 330 Billion.
John Kelly, a policy analyst, highlighted the human costs of these numbers, saying:
These are not just budgets lines. They represent food, healthcare and education to millions of Americans.
The US is one of the least equal developed countries in the world.
The top 10% of European Union citizens own 59.3%.
The Netherlands have the fairest distribution of wealth at 45.4%, and Hungary is the top-ranked country in the EU with 67.1%.
Iceland and North Macedonia, which are not part of the EU, also do better. The top 10% share in wealth hovers around 56.5-76.5%.
North America, as a region, now has inequality levels that are similar to the ones found in Sub-Saharan Africa or parts of Asia.
Emily Rojas is a sociopolitical economics who warns that “Such extreme differences risk undermining the social cohesion as well as the stability of our economy, particularly if they are not addressed.”
The growing wealth concentration in America is a major concern as budget negotiations proceed.
It is urgent that we address the stark fact, which states that the richest 10% of Americans now own over 70% the country’s wealth.
In the quest for a more equitable economic future, it is crucial to know if this trend can ever be reversed.
This article US wealth inequality reaches new highs as top 10% owns 71.2% nation’s wealth first appeared on The ICD
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