Healthcare reform: Is this the beginning of the end of inequality?
America is like a third-world society when it comes to economic inequality. Wealth is increasingly concentrated in a small fraction of the population, with an ever-widening gulf between the rich and poor.
The gap between rich and poor reached record levels in 2008, as I noted in a post last fall. (Link to October 1 2009 post.) It was the widest it had ever been since 1929.
Likewise, the inequality between executive pay and the typical workers pay has grown in leaps and bounds. In 1965, CEOs earned 24 times the typical workers pay; in 2007, the difference was 275 times. (For details, see another post from last fall.) (Link to October 29 2009 post.)
The new healthcare bill is meant to reverse the trend. “For all the political and economic uncertainty about health reform,” wrote David Leonhardt in yesterday’s New York Times, “at least one thing seems clear: The bill that President Obama signed on Thursday is the federal government’s biggest attack on economic inequality since inequality began rising more than three decades ago.”
The overall effect is an economic redistribution from the rich to the poor. For example, payroll taxes will rise for households earning more than $250,000. Those will very high earnings will pay even more (but not so much, in my opinion, that they will really feel it). Households with earnings less than four times the poverty level receive most of the benefits. The Times article also points out that the healthy will tend to subsidize the sick.
For me, this is what American citizenship is about – those with means have a moral duty to help those who don’t. We have lauded the principle of equality while permitting inequality to grow to the level that it threatens the integrity of a democratic society. The time to reverse the trend is finally here.
What do you think of the economic redistribution? Do you applaud it? Or are you appalled by it?