Is Income Inequality An Eye Sore For Census Bureau?

In their WSJ “Incredible Shrinking Income Inequality” piece, Phil Gramm & John Early argue the ballyhooed “rise is an illusion created by the Census Bureau’s failure to account for taxes & welfare.” As they note, it’s the progressives’ warped rallying cry against capitalism and an “existential” threat to democracy.

Agreed the data supporting the income inequality mantra is “profoundly flawed” for this Census blindness. Yet, care must be taken down this potential accountability rabbit hole. The authors say “taxes” paid must be included in the stat? Does that mean the Census Bureau must factor in the income reducing tax breaks (for rich & poor alike) that are now on the books (& constantly changing) via a mind-boggling array of exemptions, deductions, credits & God knows what Turbo Tax says reduces a person’s taxes? And, what about all those business perks (for execs & worker bees alike) that the IRS & Tax Code give a wink & nod to?

Again, the welfare-minded authors are right in saying “income inequality” would be “reduced dramatically” if CB simply counted “two-thirds of all government transfer payments, including Medicare, Medicaid, food stamps & some 100 other government transfer payments, as income to the recipients.” No doubt, too, their “tweaks” would show “income inequality in America [is] not growing [but] is lower today than it was 50 years ago.” Then, again, what if those corporate “tweaks” were also simply & equally tweaked?

Davd Soul