Spread The Wealth

I love this.

Short version - FiveThirtyEight.com abuses the notion that the US tax code takes from the rich to give to the poor.

He uses a stat called the GINI Coefficient (which measures how evenly the wealth of a nation is distributed.)

For those unfamiliar with the Gini Coefficient, it is a measure of the distribution of income (or wealth), bounded between 0 and 1, with zero meaning equal distribution across all citizens and 1 meaning that all the income/wealth belongs to the one, richest person. That is, the lower the number the more evenly--though not necessarily fairly, which is a normative judgment for each person to make for herself--income is distributed prior to (or after) government activity in the form of taxes and/or transfers.

As you can see, the before-taxes-and-transfers Gini Coefficient for the United States (.46) is very close to the average for all nations of the OECD (.45). Put another way, the ex ante maldistribution of income here is about the same as for comparable nations. To see what the net effect of those government policies are, we need to look next at the after-tax-and-transfer Gini Coefficients.

Here are the relevant visuals (being the the right of these charts means having more wealth concentrated in the hands of a few)

 Before Taxes:

and after taxes:

So, the current US tax code is actually moving wealth into the hands of a few.

I suppose you could take the viewpoint that ending tax cuts to the wealthy IS wealth redistribution – so people making that argument have a leg to stand on – but the idea that the wealthy are currently being impoverished by their high taxes is dead on arrival.

So to those claiming that letting the Bush tax cuts expire amounts to class warfare – I’d say, Yeah, but you started it. And now you want a truce after you drew first blood?

I don’t think so.