What causes rising inequality?

Rising Inequality: Transitory or Permanent?

"... For male labor earnings, we find that the entire increase in the
cross-sectional inequality over our sample period was permanent, that is, it reflected
increases in the dispersion of the permanent component of earnings. For total household income, the large increase in inequality over our sample period was predominantly, though not entirely, permanent. For this broader income category, both the permanent and the transitory parts of the cross-sectional variance increased, but the permanent variance contributed the bulk of the increase in the total. Furthermore, the increase in the transitory component reflected an increase in the transitory variance of spousal labor earnings and investment income. We also show that the tax system partially mitigated the increase in income inequality, but not sufficiently to alter its broadly increasing trend over the 1987-2009 period."

This is just one more report (see link at bottom) funded by foundations intended to obscure the main source poverty which is the capitalist economic system which breeds poverty--- not because of inequities in the tax system as this study would lead you to believe but because exploitation of workers results in poverty wages and massive unemployment drives wages down even further.

The only way to begin to solve the wage problem is by making the Minimum Wage a real living wage based on all cost of living factors in combination with ending unemployment which requires the president and Congress be made legislatively responsible for attaining and maintaining full employment.

In addition, the question of tax reform is not as important as setting budget priorities which must include reaping the benefits of "peace dividends" by ending this insane militarism and these dirty imperialist wars which are making us all poorer because the wealth created by workers is being squandered on barbaric death and destruction instead of meaningful and massive job-creating universal governmental social programs like a National Public Health Care System and a National Public Child Care/Pre-school System which, combined, would put some 15-million people to work with real living wage jobs thus alleviating poverty.

Only as part of getting our priorities in order can we begin to explore the kind of tax reforms that must include:

- taxing the rich.
- taxing corporate profits.
- taxing Wall Street transactions. 

Unless working people create some kinds of clubs or think-tanks to educate the working class as to the horrible price we are paying in so many ways because Wall Street is doing our thinking for us, none of this is going to change.

All of this must be considered in relation to the class struggle.

We need to take to the streets, engage in political strikes and build a new working class based progressive people's party to challenge Wall Street for political and economic power...

Some kind of massive anti-monopoly/anti-imperialist coalition for:

Peace.
Full Employment.
Real Health Care Reform.
Child Care.
Action on climate change.

We need to break this mode of thinking that the only way to get the economy moving is through the government acting to improve the market when what we need is an economy based on providing for human needs. Once we accomplish this the markets will take care of themselves with proper government price controls and planned production based on human needs.

It is mind-boggling to think that there is an entire army of over-paid muddle-headed middle class intellectuals who actually spend their time putting together reports like the one below from the Brookings Institute while others of their ilk are wasting their time trying to figure out how to get people spending again to improve the market.

If we start to think in terms of people and peace, the environment and nature before corporate profits we will have begun to solve the biggest problems of all.

We have to understand that each and every bomb dropped and bullet fired in these wars is killing our jobs and destroying our standard of living while pushing prices up.

It really doesn't take a Marxist to understand all of this but studying Marxism sure helps.

If Time Magazine can acknowledge the validity of Marxism, workers should take the time to check it out, too, because there is a class struggle and we sure don't want the warmongering Wall Street class of greedy money-bags to remain on top.

http://www.brookings.edu/~/media/Projects/BPEA/Spring%202013/2013a_panousi.pdf