Reporting Pat Loeb
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KYW Regional Affairs Council
“Princes & Paupers”
By Pat Loeb
PHILADELPHIA (CBS) — Numerous polls show that Americans, with the steepest income gap of any developed country, are concerned about the growing trend but are divided over what to do about it.
“Occupy Philadelphia” called attention to income inequality but, as critics noted, they didn’t have a solution. They’re hardly alone.
“I don’t think there’s an easy answer to that question — unfortunately,” says Charles Plosser, president of the Federal Reserve Bank of Philadelphia. Plosser says solutions will be long-term and complicated. And most economists agree they’ll require changes in public policy.
Temple University economics professor Bill Stull says the free market created the disparity between the rich and poor, so it’s unlikely to correct itself.
“No, absolutely not — it’s defintely not going to correct itself!” Stull said recently.
The problem is that the most efficient tool government has to flatten incomes is tax policy, and that has become almost impossible to use — at least in favor of the poor. But, as Pennsylvania state senator Vincent Hughes notes, it is used to help the already wealthy.
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“The Marcellus shale industry is making hundreds of millions of dollars, and they’re paying no taxes right now,” Hughes says. “There’s a $300-million tax break for the largest corporations in the Commonwealth of Pennsylvania that the governor provided in his last budget.”
Hughes doesn’t understand why middle-income earners oppose taxes on the wealthy that would help them, but Professor Stull has a theory:
“What a lot of people are looking at are the people right behind them — they don’t want them to get a nickel. They’re a hundred percent more concerned with the people that are nipping on their heels than they are with Warren Buffet.”
That may be the reason that income inequality is likely to remain an issue for a long, long time.
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