Democracy and the 'death tax'
In 1877, terrible riots tore through Pittsburgh, Chicago, San Francisco, and New York. No depression fueled worker violence; rather, the United States was experiencing perhaps the fastest economic growth in its history.
Resentment had ignited into violence over a yawning gap between the very rich, the robber barons of the age, and everybody else, says Charles R. Morris, author of "The Tycoons," a recent book.
"In that 'gilded age,' wealth inequality was just about what it is now," notes Mr. Morris. Permanently eliminating the tax on the estates of the wealthy was rejected by the Senate last Thursday. Drastically shrinking the tax remains a goal of the Republican leadership. Weakening the tax would have social, political, and economic implications, Morris says.
Morris doesn't expect violent turbulence again. "Things are a little different now," he says. But he wonders if the "unstable coalition" in the Republican Party between the religious right and prosperous business will break down, leading to a political reorganization along "lunch-bucket-type issues."
The increase in the concentration of wealth at the top in the US is "stunning," says Edward Wolff, a New York University expert on wealth. The number of households with wealth of $10 million or more in constant 2004 dollars has risen 5.19 times from 66,500 families in 1983 to 344,800 households in 2004.
Despite rising home prices, 90 percent of the increase in wealth between 1983 and 2004 has gone to the top 20 percent of households. The bottom 40 percent have seen a decline in their net worth, says Professor Wolff.