Obama Income Inequality Plans: Been There, Tried That
10 Comments
By JOHN MERLINE, INVESTOR'S BUSINESS DAILY
Posted 01/24/2014 06:53 PM ET
Email Print License Comment
inShare
In his State of the Union speech on Tuesday, President Obama is expected to make income inequality the centerpiece of his address.
Political analysts say it's a way for him to connect with a public still anxious about the tepid economic recovery ? now in its fifth year ? and upset with Obama over the disastrous rollout of ObamaCare. They also see it as a way to rally his liberal base in advance of the 2014 midterm elections.
But what Obama is unlikely to say in his lengthy address is that income inequality ? as measured by the Census Bureau's Gini index ? has increased faster on his watch than it did under any of the three previous presidents.
View Enlarged Image
Nor is he likely to mention that, on his watch, inequality has reached its highest level since the Census started recording it back in 1947.
And Obama is almost certain to avoid mentioning that the policies he's pushing now have either had little impact on inequality or have provided few benefits to those they're supposed to help. Or that one of his policy priorities is likely to increase inequality, not reduce it.
Here's a closer look at some of Obama's proposals.
Taxes. Raising taxes on the rich might seem like a good way to close the income gap. But inequality rose faster under President Clinton, who raised taxes, than it did under President George W. Bush, who cut them. In fact, the inequality measure was the same when Bush left the White House as when he entered it. Plus, the rich now pay a greater share of total income taxes than at any time in decades, yet inequality is also higher than ever.
Minimum wage. Obama will also call for another round of minimum-wage hikes. But raising the minimum wage hasn't reduced inequality in the past.
A 2007 law boosted the federal minimum wage over three years to $7.25 an hour ? a 41% increase while inflation has climbed just 12% since that year.
Yet inequality was much higher in 2012 than it was in 2007. The federal minimum wage climbed 21% under Clinton, years during which inequality also climbed.
And the most recent wage hikes haven't done much to help those just starting in the job market. In fact, the unemployment rate among 16- to 19-year-olds is 20% today, according to the Bureau of Labor Statistics. That's up from 16% before the increases started in July 2007.
Read More At Investor's Business Daily: http://news.investors.com/012414-68...nequality-ideas-have-failed.htm#ixzz2rWczFb1t
Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook
10 Comments
By JOHN MERLINE, INVESTOR'S BUSINESS DAILY
Posted 01/24/2014 06:53 PM ET
Email Print License Comment
inShare
In his State of the Union speech on Tuesday, President Obama is expected to make income inequality the centerpiece of his address.
Political analysts say it's a way for him to connect with a public still anxious about the tepid economic recovery ? now in its fifth year ? and upset with Obama over the disastrous rollout of ObamaCare. They also see it as a way to rally his liberal base in advance of the 2014 midterm elections.
But what Obama is unlikely to say in his lengthy address is that income inequality ? as measured by the Census Bureau's Gini index ? has increased faster on his watch than it did under any of the three previous presidents.
View Enlarged Image
Nor is he likely to mention that, on his watch, inequality has reached its highest level since the Census started recording it back in 1947.
And Obama is almost certain to avoid mentioning that the policies he's pushing now have either had little impact on inequality or have provided few benefits to those they're supposed to help. Or that one of his policy priorities is likely to increase inequality, not reduce it.
Here's a closer look at some of Obama's proposals.
Taxes. Raising taxes on the rich might seem like a good way to close the income gap. But inequality rose faster under President Clinton, who raised taxes, than it did under President George W. Bush, who cut them. In fact, the inequality measure was the same when Bush left the White House as when he entered it. Plus, the rich now pay a greater share of total income taxes than at any time in decades, yet inequality is also higher than ever.
Minimum wage. Obama will also call for another round of minimum-wage hikes. But raising the minimum wage hasn't reduced inequality in the past.
A 2007 law boosted the federal minimum wage over three years to $7.25 an hour ? a 41% increase while inflation has climbed just 12% since that year.
Yet inequality was much higher in 2012 than it was in 2007. The federal minimum wage climbed 21% under Clinton, years during which inequality also climbed.
And the most recent wage hikes haven't done much to help those just starting in the job market. In fact, the unemployment rate among 16- to 19-year-olds is 20% today, according to the Bureau of Labor Statistics. That's up from 16% before the increases started in July 2007.
Read More At Investor's Business Daily: http://news.investors.com/012414-68...nequality-ideas-have-failed.htm#ixzz2rWczFb1t
Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook
