This seem a little skewed to anybody else?
Rising income inequality in the U.S. appears to be slowing tax revenue growth in Indiana and other states, according to a new report by the credit rating agency Standard & Poor’s.
The report found that the rising wealth of the top 1 percent richest Americans has been accompanied by a three-decade-long slowdown in states’ revenue streams.
That funding squeeze and stagnant wages for most Americans is expected to increase spending pressures on education, infrastructure and social services programs as states struggle to increase their tax revenues, the report contends.
Indiana could be among the states hardest-hit by that trend.
[. . .]
Indiana’s top 5 percent wealthiest residents earned an average of about $246,000 during 2012, according to income estimate data from the U.S. Census Bureau. That compares with about $47,000 for the middle one-fifth of the state’s earners, $11,342 for the bottom fifth of the state’s earners and $146,468 for the top fifth of Hoosier earners.
But S&P notes that the affluent tend to save a greater share of their income and spend it on untaxed services, meaning states are unlikely to see much of an increase in sales tax collections based on the gains among this well-to-do group.
OK, OK, pound on the evil rich. I get it. But it seems to me that focusing on that infamous gap as the source of all our problems will lead us to the wrong solutions. The problem is not that the wealthiest have too much money. It is that we have too few in the middle class. So our policy focus should be on removing barriers to entry into the middle class. Coming up with brand-new schemes to somehow collect on thise "untaxed services" will be counterproductive.