Income Inequality in the United States

Throughout the course of history, income inequality has been debated a multitude of times. Some may argue that the government should address and intervene the nation‘s wealth disparity in order to create an egalitarian society in which the majority of people across the country would be earning approximately the same amount of money. However, supporters of income inequality assert that the government should not interfere with the distribution of wealth, as it provides incentive to keep working diligently in a competitive world, begs the question of why the government takes away a portion of earned legitimate wealth away from its owners, and ultimately increases the economic pie for all socioeconomic classes, as referring back to history, countries whose government takes power of the distribution of wealth have been unsuccessful in the past and in the world of capitalism and democracy.

Our society is run by the power of incentive, as most Americans believe that they should receive something just as valuable as the effort and hard work they put in. This can be best comparable to certain circumstances that occur at schooli Recently, Mri Norman drastically decreased the number of points worth for AP US History notes from ten points to a heart wrenching zero points, With no more incentive of gaining points which result in a higher grade, it is predictable that many students will choose not to read or take notes anymore, despite the benefits of this task. Just as students are motivated by the idea of receiving a higher grade, millions of Americans across the nation are also motivated by the idea of earning a higher wage.

Instead of attempting to equalize Americans‘ wages, which stumps the process of competition and as a result, gives people no incentive to diligently work, as everyone will receive equal pay, the United States must learn that income inequality ultimately benefits society as a whole. By earning a higher wage for a higher level of performance in work, a sense of competition is restored. The power of incentive is a force of innovation and creativity that fuels financial growth in society. A prime example of this notion includes Bill Gates, a business magnate. Even though Bill Gates earns five billion dollars a year, he reinvests his money in other projects that clearly benefit society as a whole and restores his wealth back into the economy for the poorer people to cleanly reap.

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If given higher taxes, the one percent wealthy population of America would be less likely to donate a large sum of money because taxes replace a portion of their donations This would harm economic growth, as less money would be spent and used, cycling the system. The power of incentive aids in the process of encouraging people to work harder, therefore earning more and spending more, ultimately recycling and fueling America’s economic system. Throughout history, income inequality has been a prevalent issue in the majority of countries in the world, As the income gap increases in the United States, more people are starting to protest that the severe wealth disparity is unfair and unjust, as Source C reports that the wealthy, one percent of the population in America, earn 38% of the nation’s asset wealth (Source C). Some people are calling for “social justice” for the nation and demanding “legitimate redistribution” of wealth to all socioeconomic classes.

The term “legitimate redistribution” requires a proper definition, as supporters of income inequality define it as wealth “obtained through voluntary, non-fraudulent trade and/or inheritance”, which should rightfully belong to its owner, who is free to save, spend, invest, or donate his or her wealth in any way they please. The majority of wealth and income in America stems from renting or selling legitimately owned resources (Source C). If so, why should the government exploit the wealth that Americans have legally acquired through the blood, sweat, and tears of hard work just to redistribute it elsewhere? Dominick T. Armentano, professor of economics at Hartford University, puts it best: the government is a thief and a thief, despite giving away his treasures, is still considered a thief.

During the course of American history, the Gilded Age, occurring in the late 19th century, known for its progressions in industrial technologies, America thrived in its extremely capitalistic environment with an exponentially growing economic system (Source F) mainly because the government did not intervene with business. Despite the great inequality between big business owners such as Carnegie and Rockefeller and their employees, this period of time proved crucial for America‘s development as the world’s technological leader and exporter and trader of major textiles The Gilded Age played a significant leading to the United States people see and admire today. During this time, many people were employed and working, in contrast to the 19305 Great Depression, a time when America’s economy tremendously dipped. The production of transportation services such as railroads stimulated the nation’s domestic trading, as a result, stimulating and strengthening the nation’s economy.

The Gilded Age is truly when America made a name for itself and posed as an actual continuous threat to other countries based on the growing economy. Compared to other countries, despite America’s gap of income inequality, the United States‘ living standard for the poor is much higher than countries like Nicaragua and Venezuela, countries comparable to the United States regarding class and income division (Source D) The economic pie of America, divided based on the income earned, is separated by each of the three main class divisions or slices: upper class, middle class, and lower class, By increasing the economic pie, all of America‘s economic classes benefit, as each slice increases, which still benefits the poorer people of America.

Many people believe that America's economic pie is fixed; however, when the nation’s economic prosperity grows, the pie grows as well. Source D’s Lane Kenworthy states that if there is increases in the income of the upper 1%, the middle class and the lower class benefit as well. The more the inequality, the stronger the economic growth. The data presented in Source D reports that among developed countries, there exists a correlation between higher inequality and higher living standards, as well as a richer middle and lower class. While other countries in Europe have resorted to a more socialistic society due to mishaps in their middle and lower classes, the United States should remain stable with its free market capitalism, for inequality, ultimately, results in higher living standards for everyone, including the lower class.

Income inequality, ultimately, benefits America as a whole. When work is incentivized, people will tend to work harder, therefore increasing levels of creativity and innovation. By working diligently, some may be amassed with riches, which can be spent on projects that benefit the lower portion of the class ranking, in turn creating a continuous cycle of investing money into projects the lower class can cleanly map The amount of legitimate wealth earned by civilians should not be capped and should not be taken away by the government for taxes that may hinder one’s contribution towards society. The Gilded Age was successful primarily because there was no active government looking over the businesses. The government should step away from economic affairs in the free-market, in order to receive the maximum profit.

The United States has been thriving as a major player in world trading for many years already, signifying that free-market capitalism has been working and will continue to work because the greater the inequality in a developed country, the richer the middle and lower class are living comfortably with higher living standards. In order for the nation to keep growing, the United States must continue with a capitalist mindset, and limit the amount of taxes received by all economic classes. With the growing amount of prosperity in the nation, America should expect the middle and lower classes to grow financially and socially stronger due to the income inequality.

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