Thanks to the Occupy movement and information easily disseminated on the Internet, Americans are better informed about the rich-poor gap. The issue will continue to figure prominently in this election. Case in point: The hoopla over Mitt Romney's tax return.
At the town meeting in New Hampshire where Senator John McCain endorsed Mitt Romney as the Republican presidential candidate last month, a questioner shouted: “The US has the highest income inequality in the entire developed world.”
The senator, according to one press report, walked over to the man, and speaking “menacingly” said, “Be quiet.”
Oops, too late, Senator! The secret’s already out: A new survey put out this month by the Pew Research Center finds two-thirds of Americans see “strong conflicts” between the rich and poor – including the majority of Republicans polled – an increase from 2009. The original survey question asked respondents: “In America, how much conflict is there between poor people and rich people?”
Their responses shouldn’t be surprising. The rich have been piling up a bigger and bigger share of the nation’s income and wealth over recent decades – a fact borne out in Mr. Romney’s own tax return, which his campaign released today. Thanks in large part to information disseminated easily on the Web and the ongoing voice of the Occupy movement, Americans now know the income inequality gap well, and don’t like it because they regard it as unfair.
As campaign rhetoric and coverage already show, the distribution of income and wealth will be a prominent issue in the forthcoming presidential and congressional elections.
Under quizzing by the press, Mr. Romney has admitted that he pays an effective tax rate of about 15 percent. (His tax returns show that it’s closer to 14.5 – below average even for millionaires.) This is in large part because the vast majority of his income comes from “investments” (much of them a form of ongoing compensation from his work at private equity firm Bain Capital), which are taxed at the capital gains rate of 15 percent. That’s a rate far less than what many middle-income Americans pay in taxes.