Another Indictment against the Left’s Class Warfare Game

Inequality, growing disparity, and the wealth gap are talking points inescapable by those even remotely involved and informed in politics. To many on the Left, the unequal “distribution” of wealth represents the single greatest threat of our time.

The biggest bogeyman of all, of course, is the so-called “1 percent”—the richest of the rich who’ve amassed ungodly amounts of wealth solely through oppressing the masses and taking their disposable income by force.

Never mind that nothing is ever actually “distributed”— people (generally) earn their wealth from consumers who demand their products or services. Let’s also remember that there are more heads of household working full time and year-round in the top 5 percent than in the bottom 20 percent, despite the great disparity in numbers between the two groups. And let’s not neglect the fact that when you measure federal taxes paid minus federal transfers received, the top 20 percent of earners pay an average of $46,500 in taxes, while the bottom three-fifths receive a net benefit annually.

For the purposes of this conversation, it is imperative to highlight a subject that is almost criminally neglected by both sides of the aisle: the fact that the United States remains (for the time being) a land of opportunity where people literally can rise (and fall) at any time (despite the relatively successful efforts of many).

Statistical fraud is a national pastime of sorts, and nowhere is it more prevalent than in discussions involving wealth. A common assumption/implicit lie is that the different income brackets represent static, closed groups forever entrenched in either their misery or fortune.

But reality is very different, and new data from the IRS, which released information on the 400 highest-earning income individuals from 1992 to 2010, confirms what all credible economists already know.

Mark J. Perry of the American Enterprise Institute does a great job summarizing the IRS report, thusly (emphasis added):

  1. Of the group of 4,024 top earners from 1992-2010, there were 2,909 individual taxpayers who made it into the “Fortunate 400″ only one time during the 19-year period. Those 2,909 one-timers represent 72.3% of the total 4,024 taxpayers, and therefore only 1,115 taxpayers that make up the rest of the group (27.7% of the total, or about one in four) were able to make it into the top 400 more than once between 1992 and 2010.

  2. Moreover, since 2,909 earners made it into the top 400 once (72.3%), and another 504 (12.5%) made it into the top group twice between 1992 and 2010, that means that approximately 85% of the top earners made it into the “Fortunate 400″ group only once or twice (3,413 out of 4,024), and only about 15% of the remainder (611 taxpayers out of 4,024) were able to make it into the top group in more than 2 years out of 19.

  3. There were only 95 taxpayers out of the 4,024 total taxpayers in the top earner group (2.4%) who were in the top 400 in 10 or more years out of 19.*

So, what does this all tell you? It tells you that the ceaseless narrative of “exploding income inequality,” “wage stagnation” and “tale of two cities” rhetoric is fallacious and disingenuous in a number of profound ways, at best, and terribly destructive and counterproductive at its worst. Equality should never be the end itself. What good is “equality” if the poorest and most vulnerable of our society would be substantially worse off for it—with no hope for change or upward mobility?

As history (and common sense) show time and time again, economic prosperity cannot be had by arbitrarily taking from the producers and job creators, and disincentivizing work for all. Class warfare—or, as the intellectuals/politicians like to call it, “social justice”— can only take certain segments of a nation so far, and constantly trying to killing the goose that lays the golden egg presents the deadliest threat of all for progress and prosperity.