Inequality Vs Income Inequality

977 Words4 Pages
America having redeemed its democracy after the conclusion of the civil wars, it becomes regrettable that it betrayed that it was going to reveal the same with the concentration of wealth. However, how much it is inevitable to avoid inequality of income and wealth, the level of wealth among those at the high ranks of the economic status points a potential threat to equality among all the citizens of a nation. The issue is not whether income inequality is bad or good, the question of contention is, and at what point does this inequality start to pose a threat to the equality of opportunity and above all the democracy of a nation. America had reached that tipping point of inequality that had never been seen during the Gilded Age of the 19th century. With inequalities as a result of income levels, it was complicated to correct the dysfunctions of an economy. The office of the Congressional budget pointed out that between 1979 and 2007, during the beginning of great recession the income gap after payment of the transfers and federal taxes tripled; there was an increase in the after tax. While this was happening, the medium household income was continuously falling.
At the beginning of the 19th century, wealth had become highly concentrated than income. The modern trend of wealth concentration posed a threat to the pillars of the American society, the economy, the ideal of equal opportunity and above all the democracy of the United States of America. With the concentration of wealth, there was the likelihood of consumers having low purchasing power thus many businesses were likely to lack incentives for hiring workers. The rich were spending small proportions of their income than the average class and the poor; this led to the concentration of wealth at the top of the economy. Through this concentration of wealth at the top, there was hampering of the upward mobility (Mehrotra, 25-61). Generally, low upward mobility is a correlation of high rates of inequality. With the decline in the middle class and the dropping of the medium household incomes, there were very remote possibilities of upward mobility. The relationship between democracy and the then widening inequality was totally over shown in the United States.
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