While the poor get social programs worth $365 billion, the rich get more. Subsidies to help the prosperous build wealth added up to $384 billion last year.
Clay Bennett / The Christian Science Monitor / File
Everybody knows the rich are getting richer, but they're getting richer remains something of a mystery. Is the system biased?
The shift of income to the top has occurred in the most prosperous English-speaking nations, such as Australia, Britain, and Canada. But it has been most pronounced in the United States. Thirty years ago, the richest 1 percent of Americans got 9 percent of total national income. By 2007, they had 23 percent. Last year, new census data show, the rich-poor income gap was the widest on record.
Wealth is more unevenly distributed. The top 20 percent of wealth-holders own 84 percent of America's wealth. What's causing it?
One factor is federal policy, says a study by the Corporation for Enterprise Development (CFED) and the Annie E. Casey Foundation. It finds that most federal subsidies aimed at building wealth, such as certain tax deductions (officially called "expenditures"), credits, and preferential rates, go to the richest taxpayers.
Of course, many government programs aim to alleviate poverty. Those with low incomes get Medicaid, food stamps, welfare, etc., adding up to about $365 billion. But Uncle Sam's subsidies for building wealth – of little use to the poor – were even larger: $384 billion last year.
This money helps the more prosperous buy homes, save money, start businesses, pay for college, and retire comfortably. More than half of that sum went to the wealthiest 5 percent of tax-payers. The top 1 percent got an average $95,000 in federal help. Upper-middle-income families making $100,000 got $1,600. The poor got less than $5.
That $384 billion is "under-recognized" by the public, though it comes close to basic expenditures of the Pentagon, says Robert Friedman, board chair of CFED, a community development nonprofit in Washington.