Why the Gap Between Rich Poor Is Widening

Why the Gap Between Rich Poor Is Widening Search Why the Gap Between Rich Poor Is Widening Share this articleTwitterLinkedinFacebookemailAn Inside Look at Why the Rich Get Richer the Poor Stay PutWhy the Rich Get Richer the Poor Struggle Numbers released by the U.S. Census Bureau earlier this month confirm what many have known for a long time The eu-agrarpolitik between the rich and the poor in this country is growing ever wider. And while we examined the numbers behind the income eu-agrarpolitik belastung week, we heard yur requests for an actual explanation of why it exists loud and clear. So while the numbers dont tell us why income inequality continues to climb, the experts will. Technology The Double-Edged Sword Just as technology has worked its way into ur daily work lives, it has also had a significant big-picture effect on employment, according to a March 2012 report from thenonpartisan Congressional Research Service. On the bottom end of the income scale, technolog y now performs some of the functions that once went to low-skill workers. Furthermora, technological changes like improved computer and telecommunications systems have enabled mora U.S. companies to send jobs to countries with lower labor costs. With mora workers competing for fewer jobs, wages for low-skill occupations dropped. At the saatkorn time, technology has been a boon for some higher earners. In fields such as engineering and law, technology serves as a complement to high-skilled workers, which has raised demand for and the relative wages of ansicht workers, the report concludes. Current Tax Rates Favor the Rich Then theres the current tax satz structure, according to a sepatarif, recently releasedanalysis by the Congressional Research Service. The average federal income tax tarif for the highest-income taxpayers has been falling steadily for the past 60 years, according to the report. Most recently, the so-called Bush tax cuts enacted in 2001 and 2003 lowered the top marginal tax rate from 36.9 percent to 35 percent. The natural effect of lower tax rates is that the wealthiest get to keep mora of their income, which tends to widen the gap between rich and poor, according to the CRS analysis. Lower tax rates, the report suggests, may also act as an incentive for top earners to negotiate even higher compensation the lower the tax rate, the more of each additional dollar the worker gets to keep. Indeed, the report concludes, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.Capital Gains The Bush tax cuts also lowered taxes on capital gains the profits realized when assets, such as stocks or real estate, are sold. At least until the end of 2012, the top capital gains rate is 15 percent, down from 20 percent in the 1990s (the rate welches 28 percent before that). At the saatkorn time, those at the very top of the scale are making a higher percentage of their inco me from capital gains in 2006, the top 1 percent made 38 percent if their money from capital gains, up from 31 percent 10 years earlier. And when higher capital gains incomes combine with lower tax rates on that money, it makes mathematical sense that the richest household would increase their earnings faster than those lower down the scale.Shifting Social Norms Though harder to quantify than technology and tax policy, shifting social norms may also play a role in the growing income gap, say some economists. Society, as a whole, is simply less aghast at soaring salaries than it once was. Outlining this theory in a 2002 New York Times column, Paul Krugman explained that after the New Deal and World War II, the national mindset tended towards equality of pay and more humble, community-oriented executives. Somewhere around the 1970s, however, those norms simply began to unravel, creating greater social acceptance for the sky-high executive compensation we see today. But Why Do We Ca re? If behauptung factors help explain how the income gap got where it is today, they do elend answer a perhaps even more important question Why does it matter? Register your own thoughts below, and come back next week for answers from readers and experts alike. Recommended Reading Thank you for reading. As an added bonus, the Salary.com vorwort staff has compiled a recommended reading list regarding this topic. Enjoy The Price of InequalityHow Todays Divided Society Endangers ur Future End This wirtschaftskrise Now The Great DivergenceAmericas Growing Inequality Crisis What We Can Do About It The Betrayal of the American Dream Related Salary.com Content Cracking the Dress Code Dilemma Dream Job Pyrotechnician 7 Signs Your Employees Hate You From our trusted Partners From our trusted Partners Home Articles Trends Why the Gap Between Rich Poor Is WideningWhy the Gap Between Rich Poor Is Widening Search Why the Gap Between Rich Poor Is Wideni ng Share this articleTwitterLinkedinFacebookemailAn Inside Look at Why the Rich Get Richer the Poor Stay PutWhy the Rich Get Richer the Poor Struggle Numbers released by the U.S. Census Bureau earlier this month confirm what many have known for a long time The gap between the rich and the poor in this country is growing ever wider. And while we examined the numbers behind the income gap last week, we heard your requests for an actual explanation of why it exists loud and clear. So while the numbers dont tell us why income inequality continues to climb, the experts will. Technology The Double-Edged Sword Just as technology has worked its way into our daily work lives, it has also had a significant big-picture effect on employment, according to a March 2012 report from thenonpartisan Congressional Research Service. On the bottom end of the income scale, technology now performs some of the functions that once went to low-skill workers. Furthermore, technological changes like imp roved computer and telecommunications systems have enabled more U.S. companies to send jobs to countries with lower labor costs. With more workers competing for fewer jobs, wages for low-skill occupations dropped. At the same time, technology has been a boon for some higher earners. In fields such as engineering and law, technology serves as a complement to high-skilled workers, which has raised demand for and the relative wages of these workers, the report concludes. Current Tax Rates Favor the Rich Then theres the current tax rate structure, according to a separate, recently releasedanalysis by the Congressional Research Service. The average federal income tax rate for the highest-income taxpayers has been falling steadily for the past 60 years, according to the report. Most recently, the so-called Bush tax cuts enacted in 2001 and 2003 lowered the top marginal tax rate from 36.9 percent to 35 percent. The natural effect of lower tax rates is that the wealthiest get to keep m ore of their income, which tends to widen the gap between rich and poor, according to the CRS analysis. Lower tax rates, the report suggests, may also act as an incentive for top earners to negotiate even higher compensation the lower the tax rate, the more of each additional dollar the worker gets to keep. Indeed, the report concludes, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.Capital Gains The Bush tax cuts also lowered taxes on capital gains the profits realized when assets, such as stocks or real estate, are sold. At least until the end of 2012, the top capital gains rate is 15 percent, down from 20 percent in the 1990s (the rate was 28 percent before that). At the same time, those at the very top of the scale are making a higher percentage of their income from capital gains in 2006, the top 1 percent made 38 percent if their money from capital gains, up from 31 percent 10 years earlie r. And when higher capital gains incomes combine with lower tax rates on that money, it makes mathematical sense that the richest household would increase their earnings faster than those lower down the scale.Shifting Social Norms Though harder to quantify than technology and tax policy, shifting social norms may also play a role in the growing income gap, say some economists. Society, as a whole, is simply less aghast at soaring salaries than it once was. Outlining this theory in a 2002 New York Times column, Paul Krugman explained that after the New Deal and World War II, the national mindset tended towards equality of pay and more humble, community-oriented executives. Somewhere around the 1970s, however, those norms simply began to unravel, creating greater social acceptance for the sky-high executive compensation we see today. But Why Do We Care? If these factors help explain how the income gap got where it is today, they do not answer a perhaps even more important question Why does it matter? Register your own thoughts below, and come back next week for answers from readers and experts alike. Recommended Reading Thank you for reading. As an added bonus, the Salary.com editorial staff has compiled a recommended reading list regarding this topic. Enjoy The Price of InequalityHow Todays Divided Society Endangers Our Future End This Depression Now The Great DivergenceAmericas Growing Inequality Crisis What We Can Do About It The Betrayal of the American Dream Related Salary.com Content Cracking the Dress Code Dilemma Dream Job Pyrotechnician 7 Signs Your Employees Hate You From our trusted Partners From our trusted Partners Home Articles Trends Why the Gap Between Rich Poor Is WideningWhy the Gap Between Rich Poor Is Widening Search Why the Gap Between Rich Poor Is Widening Share this articleTwitterLinkedinFacebookemailAn Inside Look at Why the Rich Get Richer the Poor Stay PutWhy the Rich Get Richer the Poor Struggle Numbers released by the U.S. Census Bureau earlier this month confirm what many have known for a long time The gap between the rich and the poor in this country is growing ever wider. And while we examined the numbers behind the income gap last week, we heard your requests for an actual explanation of why it exists loud and clear. So while the numbers dont tell us why income inequality continues to climb, the experts will. Technology The Double-Edged Sword Just as technology has worked its way into our daily work lives, it has also had a significant big-picture effect on employment, according to a March 2012 report from thenonpartisan Congressional Research Service. On the bottom end of the income scale, technology now performs some of the functions that once went to low-skill workers. Furthermore, technological changes like improved computer and telecommunications systems have enabled more U.S. companies to send jobs to countries with lower labor costs. With more work ers competing for fewer jobs, wages for low-skill occupations dropped. At the same time, technology has been a boon for some higher earners. In fields such as engineering and law, technology serves as a complement to high-skilled workers, which has raised demand for and the relative wages of these workers, the report concludes. Current Tax Rates Favor the Rich Then theres the current tax rate structure, according to a separate, recently releasedanalysis by the Congressional Research Service. The average federal income tax rate for the highest-income taxpayers has been falling steadily for the past 60 years, according to the report. Most recently, the so-called Bush tax cuts enacted in 2001 and 2003 lowered the top marginal tax rate from 36.9 percent to 35 percent. The natural effect of lower tax rates is that the wealthiest get to keep more of their income, which tends to widen the gap between rich and poor, according to the CRS analysis. Lower tax rates, the report suggests, ma y also act as an incentive for top earners to negotiate even higher compensation the lower the tax rate, the more of each additional dollar the worker gets to keep. Indeed, the report concludes, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.Capital Gains The Bush tax cuts also lowered taxes on capital gains the profits realized when assets, such as stocks or real estate, are sold. At least until the end of 2012, the top capital gains rate is 15 percent, down from 20 percent in the 1990s (the rate was 28 percent before that). At the same time, those at the very top of the scale are making a higher percentage of their income from capital gains in 2006, the top 1 percent made 38 percent if their money from capital gains, up from 31 percent 10 years earlier. And when higher capital gains incomes combine with lower tax rates on that money, it makes mathematical sense that the richest household w ould increase their earnings faster than those lower down the scale.Shifting Social Norms Though harder to quantify than technology and tax policy, shifting social norms may also play a role in the growing income gap, say some economists. Society, as a whole, is simply less aghast at soaring salaries than it once was. Outlining this theory in a 2002 New York Times column, Paul Krugman explained that after the New Deal and World War II, the national mindset tended towards equality of pay and more humble, community-oriented executives. Somewhere around the 1970s, however, those norms simply began to unravel, creating greater social acceptance for the sky-high executive compensation we see today. But Why Do We Care? If these factors help explain how the income gap got where it is today, they do not answer a perhaps even more important question Why does it matter? Register your own thoughts below, and come back next week for answers from readers and experts alike. Recommended Reading Thank you for reading. As an added bonus, the Salary.com editorial staff has compiled a recommended reading list regarding this topic. Enjoy The Price of InequalityHow Todays Divided Society Endangers Our Future End This Depression Now The Great DivergenceAmericas Growing Inequality Crisis What We Can Do About It The Betrayal of the American Dream Related Salary.com Content Cracking the Dress Code Dilemma Dream Job Pyrotechnician 7 Signs Your Employees Hate You From our trusted Partners From our trusted Partners Home Articles Trends Why the Gap Between Rich Poor Is WideningWhy the Gap Between Rich Poor Is Widening Search Why the Gap Between Rich Poor Is Widening Share this articleTwitterLinkedinFacebookemailAn Inside Look at Why the Rich Get Richer the Poor Stay PutWhy the Rich Get Richer the Poor Struggle Numbers released by the U.S. Census Bureau earlier this month confirm what many have known for a long time The gap between the rich an d the poor in this country is growing ever wider. And while we examined the numbers behind the income gap last week, we heard your requests for an actual explanation of why it exists loud and clear. So while the numbers dont tell us why income inequality continues to climb, the experts will. Technology The Double-Edged Sword Just as technology has worked its way into our daily work lives, it has also had a significant big-picture effect on employment, according to a March 2012 report from thenonpartisan Congressional Research Service. On the bottom end of the income scale, technology now performs some of the functions that once went to low-skill workers. Furthermore, technological changes like improved computer and telecommunications systems have enabled more U.S. companies to send jobs to countries with lower labor costs. With more workers competing for fewer jobs, wages for low-skill occupations dropped. At the same time, technology has been a boon for some higher earners. In fields such as engineering and law, technology serves as a complement to high-skilled workers, which has raised demand for and the relative wages of these workers, the report concludes. Current Tax Rates Favor the Rich Then theres the current tax rate structure, according to a separate, recently releasedanalysis by the Congressional Research Service. The average federal income tax rate for the highest-income taxpayers has been falling steadily for the past 60 years, according to the report. Most recently, the so-called Bush tax cuts enacted in 2001 and 2003 lowered the top marginal tax rate from 36.9 percent to 35 percent. The natural effect of lower tax rates is that the wealthiest get to keep more of their income, which tends to widen the gap between rich and poor, according to the CRS analysis. Lower tax rates, the report suggests, may also act as an incentive for top earners to negotiate even higher compensation the lower the tax rate, the more of each additional dollar the worker gets to keep. Indeed, the report concludes, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.Capital Gains The Bush tax cuts also lowered taxes on capital gains the profits realized when assets, such as stocks or real estate, are sold. At least until the end of 2012, the top capital gains rate is 15 percent, down from 20 percent in the 1990s (the rate was 28 percent before that). At the same time, those at the very top of the scale are making a higher percentage of their income from capital gains in 2006, the top 1 percent made 38 percent if their money from capital gains, up from 31 percent 10 years earlier. And when higher capital gains incomes combine with lower tax rates on that money, it makes mathematical sense that the richest household would increase their earnings faster than those lower down the scale.Shifting Social Norms Though harder to quantify than technology and tax poli cy, shifting social norms may also play a role in the growing income gap, say some economists. Society, as a whole, is simply less aghast at soaring salaries than it once was. Outlining this theory in a 2002 New York Times column, Paul Krugman explained that after the New Deal and World War II, the national mindset tended towards equality of pay and more humble, community-oriented executives. Somewhere around the 1970s, however, those norms simply began to unravel, creating greater social acceptance for the sky-high executive compensation we see today. But Why Do We Care? If these factors help explain how the income gap got where it is today, they do not answer a perhaps even more important question Why does it matter? Register your own thoughts below, and come back next week for answers from readers and experts alike. Recommended Reading Thank you for reading. As an added bonus, the Salary.com editorial staff has compiled a recommended reading list regarding this topic. Enjoy Th e Price of InequalityHow Todays Divided Society Endangers Our Future End This Depression Now The Great DivergenceAmericas Growing Inequality Crisis What We Can Do About It The Betrayal of the American Dream Related Salary.com Content Cracking the Dress Code Dilemma Dream Job Pyrotechnician 7 Signs Your Employees Hate You From our trusted Partners From our trusted Partners Home Articles Trends Why the Gap Between Rich Poor Is WideningWhy the Gap Between Rich Poor Is Widening Search Why the Gap Between Rich Poor Is Widening Share this articleTwitterLinkedinFacebookemailAn Inside Look at Why the Rich Get Richer the Poor Stay PutWhy the Rich Get Richer the Poor Struggle Numbers released by the U.S. Census Bureau earlier this month confirm what many have known for a long time The gap between the rich and the poor in this country is growing ever wider. And while we examined the numbers behind the income gap last week, we heard your requests for an actual explanation of why it exists loud and clear. So while the numbers dont tell us why income inequality continues to climb, the experts will. Technology The Double-Edged Sword Just as technology has worked its way into our daily work lives, it has also had a significant big-picture effect on employment, according to a March 2012 report from thenonpartisan Congressional Research Service. On the bottom end of the income scale, technology now performs some of the functions that once went to low-skill workers. Furthermore, technological changes like improved computer and telecommunications systems have enabled more U.S. companies to send jobs to countries with lower labor costs. With more workers competing for fewer jobs, wages for low-skill occupations dropped. At the same time, technology has been a boon for some higher earners. In fields such as engineering and law, technology serves as a complement to high-skilled workers, which has raised demand for and the relative wag es of these workers, the report concludes. Current Tax Rates Favor the Rich Then theres the current tax rate structure, according to a separate, recently releasedanalysis by the Congressional Research Service. The average federal income tax rate for the highest-income taxpayers has been falling steadily for the past 60 years, according to the report. Most recently, the so-called Bush tax cuts enacted in 2001 and 2003 lowered the top marginal tax rate from 36.9 percent to 35 percent. The natural effect of lower tax rates is that the wealthiest get to keep more of their income, which tends to widen the gap between rich and poor, according to the CRS analysis. Lower tax rates, the report suggests, may also act as an incentive for top earners to negotiate even higher compensation the lower the tax rate, the more of each additional dollar the worker gets to keep. Indeed, the report concludes, the top tax rate reductions appear to be associated with the increasing concentration of inc ome at the top of the income distribution.Capital Gains The Bush tax cuts also lowered taxes on capital gains the profits realized when assets, such as stocks or real estate, are sold. At least until the end of 2012, the top capital gains rate is 15 percent, down from 20 percent in the 1990s (the rate was 28 percent before that). At the same time, those at the very top of the scale are making a higher percentage of their income from capital gains in 2006, the top 1 percent made 38 percent if their money from capital gains, up from 31 percent 10 years earlier. And when higher capital gains incomes combine with lower tax rates on that money, it makes mathematical sense that the richest household would increase their earnings faster than those lower down the scale.Shifting Social Norms Though harder to quantify than technology and tax policy, shifting social norms may also play a role in the growing income gap, say some economists. Society, as a whole, is simply less aghast at soa ring salaries than it once was. Outlining this theory in a 2002 New York Times column, Paul Krugman explained that after the New Deal and World War II, the national mindset tended towards equality of pay and more humble, community-oriented executives. Somewhere around the 1970s, however, those norms simply began to unravel, creating greater social acceptance for the sky-high executive compensation we see today. But Why Do We Care? If these factors help explain how the income gap got where it is today, they do not answer a perhaps even more important question Why does it matter? Register your own thoughts below, and come back next week for answers from readers and experts alike. Recommended Reading Thank you for reading. As an added bonus, the Salary.com editorial staff has compiled a recommended reading list regarding this topic. Enjoy The Price of InequalityHow Todays Divided Society Endangers Our Future End This Depression Now The Great DivergenceAmericas Growing Inequality Cri sis What We Can Do About It The Betrayal of the American Dream Related Salary.com Content Cracking the Dress Code Dilemma Dream Job Pyrotechnician 7 Signs Your Employees Hate You From our trusted Partners From our trusted Partners Home Articles Trends Why the Gap Between Rich Poor Is WideningWhy the Gap Between Rich Poor Is Widening Search Why the Gap Between Rich Poor Is Widening Share this articleTwitterLinkedinFacebookemailAn Inside Look at Why the Rich Get Richer the Poor Stay PutWhy the Rich Get Richer the Poor Struggle Numbers released by the U.S. Census Bureau earlier this month confirm what many have known for a long time The gap between the rich and the poor in this country is growing ever wider. And while we examined the numbers behind the income gap last week, we heard your requests for an actual explanation of why it exists loud and clear. So while the numbers dont tell us why income inequality continues to climb, the experts w ill. Technology The Double-Edged Sword Just as technology has worked its way into our daily work lives, it has also had a significant big-picture effect on employment, according to a March 2012 report from thenonpartisan Congressional Research Service. On the bottom end of the income scale, technology now performs some of the functions that once went to low-skill workers. Furthermore, technological changes like improved computer and telecommunications systems have enabled more U.S. companies to send jobs to countries with lower labor costs. With more workers competing for fewer jobs, wages for low-skill occupations dropped. At the same time, technology has been a boon for some higher earners. In fields such as engineering and law, technology serves as a complement to high-skilled workers, which has raised demand for and the relative wages of these workers, the report concludes. Current Tax Rates Favor the Rich Then theres the current tax rate structure, according to a separa te, recently releasedanalysis by the Congressional Research Service. The average federal income tax rate for the highest-income taxpayers has been falling steadily for the past 60 years, according to the report. Most recently, the so-called Bush tax cuts enacted in 2001 and 2003 lowered the top marginal tax rate from 36.9 percent to 35 percent. The natural effect of lower tax rates is that the wealthiest get to keep more of their income, which tends to widen the gap between rich and poor, according to the CRS analysis. Lower tax rates, the report suggests, may also act as an incentive for top earners to negotiate even higher compensation the lower the tax rate, the more of each additional dollar the worker gets to keep. Indeed, the report concludes, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.Capital Gains The Bush tax cuts also lowered taxes on capital gains the profits realized when assets, such as stocks or real estate, are sold. At least until the end of 2012, the top capital gains rate is 15 percent, down from 20 percent in the 1990s (the rate was 28 percent before that). At the same time, those at the very top of the scale are making a higher percentage of their income from capital gains in 2006, the top 1 percent made 38 percent if their money from capital gains, up from 31 percent 10 years earlier. And when higher capital gains incomes combine with lower tax rates on that money, it makes mathematical sense that the richest household would increase their earnings faster than those lower down the scale.Shifting Social Norms Though harder to quantify than technology and tax policy, shifting social norms may also play a role in the growing income gap, say some economists. Society, as a whole, is simply less aghast at soaring salaries than it once was. Outlining this theory in a 2002 New York Times column, Paul Krugman explained that after the New Deal and World War II, the national mindset tended towards equality of pay and more humble, community-oriented executives. Somewhere around the 1970s, however, those norms simply began to unravel, creating greater social acceptance for the sky-high executive compensation we see today. But Why Do We Care? If these factors help explain how the income gap got where it is today, they do not answer a perhaps even more important question Why does it matter? Register your own thoughts below, and come back next week for answers from readers and experts alike. Recommended Reading Thank you for reading. As an added bonus, the Salary.com editorial staff has compiled a recommended reading list regarding this topic. Enjoy The Price of InequalityHow Todays Divided Society Endangers Our Future End This Depression Now The Great DivergenceAmericas Growing Inequality Crisis What We Can Do About It The Betrayal of the American Dream Related Salary.com Content Cracking the Dress Code Dilemma Dream Job Pyrote chnician 7 Signs Your Employees Hate You From our trusted Partners From our trusted Partners Home Articles Trends Why the Gap Between Rich Poor Is WideningWhy the Gap Between Rich Poor Is Widening Search Why the Gap Between Rich Poor Is Widening Share this articleTwitterLinkedinFacebookemailAn Inside Look at Why the Rich Get Richer the Poor Stay PutWhy the Rich Get Richer the Poor Struggle Numbers released by the U.S. Census Bureau earlier this month confirm what many have known for a long time The gap between the rich and the poor in this country is growing ever wider. And while we examined the numbers behind the income gap last week, we heard your requests for an actual explanation of why it exists loud and clear. So while the numbers dont tell us why income inequality continues to climb, the experts will. Technology The Double-Edged Sword Just as technology has worked its way into our daily work lives, it has also had a significant big-pict ure effect on employment, according to a March 2012 report from thenonpartisan Congressional Research Service. On the bottom end of the income scale, technology now performs some of the functions that once went to low-skill workers. Furthermore, technological changes like improved computer and telecommunications systems have enabled more U.S. companies to send jobs to countries with lower labor costs. With more workers competing for fewer jobs, wages for low-skill occupations dropped. At the same time, technology has been a boon for some higher earners. In fields such as engineering and law, technology serves as a complement to high-skilled workers, which has raised demand for and the relative wages of these workers, the report concludes. Current Tax Rates Favor the Rich Then theres the current tax rate structure, according to a separate, recently releasedanalysis by the Congressional Research Service. The average federal income tax rate for the highest-income taxpayers has be en falling steadily for the past 60 years, according to the report. Most recently, the so-called Bush tax cuts enacted in 2001 and 2003 lowered the top marginal tax rate from 36.9 percent to 35 percent. The natural effect of lower tax rates is that the wealthiest get to keep more of their income, which tends to widen the gap between rich and poor, according to the CRS analysis. Lower tax rates, the report suggests, may also act as an incentive for top earners to negotiate even higher compensation the lower the tax rate, the more of each additional dollar the worker gets to keep. Indeed, the report concludes, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.Capital Gains The Bush tax cuts also lowered taxes on capital gains the profits realized when assets, such as stocks or real estate, are sold. At least until the end of 2012, the top capital gains rate is 15 percent, down from 20 percent in the 1990s (the rate was 28 percent before that). At the same time, those at the very top of the scale are making a higher percentage of their income from capital gains in 2006, the top 1 percent made 38 percent if their money from capital gains, up from 31 percent 10 years earlier. And when higher capital gains incomes combine with lower tax rates on that money, it makes mathematical sense that the richest household would increase their earnings faster than those lower down the scale.Shifting Social Norms Though harder to quantify than technology and tax policy, shifting social norms may also play a role in the growing income gap, say some economists. Society, as a whole, is simply less aghast at soaring salaries than it once was. Outlining this theory in a 2002 New York Times column, Paul Krugman explained that after the New Deal and World War II, the national mindset tended towards equality of pay and more humble, community-oriented executives. Somewhere around the 1970s, however, those norms simply began to unravel, creating greater social acceptance for the sky-high executive compensation we see today. But Why Do We Care? If these factors help explain how the income gap got where it is today, they do not answer a perhaps even more important question Why does it matter? Register your own thoughts below, and come back next week for answers from readers and experts alike. Recommended Reading Thank you for reading. As an added bonus, the Salary.com editorial staff has compiled a recommended reading list regarding this topic. Enjoy The Price of InequalityHow Todays Divided Society Endangers Our Future End This Depression Now The Great DivergenceAmericas Growing Inequality Crisis What We Can Do About It The Betrayal of the American Dream Related Salary.com Content Cracking the Dress Code Dilemma Dream Job Pyrotechnician 7 Signs Your Employees Hate You From our trusted Partners From our trusted Partners Home Articles Trends W hy the Gap Between Rich Poor Is WideningWhy the Gap Between Rich Poor Is Widening Search Why the Gap Between Rich Poor Is Widening Share this articleTwitterLinkedinFacebookemailAn Inside Look at Why the Rich Get Richer the Poor Stay PutWhy the Rich Get Richer the Poor Struggle Numbers released by the U.S. Census Bureau earlier this month confirm what many have known for a long time The gap between the rich and the poor in this country is growing ever wider. And while we examined the numbers behind the income gap last week, we heard your requests for an actual explanation of why it exists loud and clear. So while the numbers dont tell us why income inequality continues to climb, the experts will. Technology The Double-Edged Sword Just as technology has worked its way into our daily work lives, it has also had a significant big-picture effect on employment, according to a March 2012 report from thenonpartisan Congressional Research Service. On the bottom end of the income s cale, technology now performs some of the functions that once went to low-skill workers. Furthermore, technological changes like improved computer and telecommunications systems have enabled more U.S. companies to send jobs to countries with lower labor costs. With more workers competing for fewer jobs, wages for low-skill occupations dropped. At the same time, technology has been a boon for some higher earners. In fields such as engineering and law, technology serves as a complement to high-skilled workers, which has raised demand for and the relative wages of these workers, the report concludes. Current Tax Rates Favor the Rich Then theres the current tax rate structure, according to a separate, recently releasedanalysis by the Congressional Research Service. The average federal income tax rate for the highest-income taxpayers has been falling steadily for the past 60 years, according to the report. Most recently, the so-called Bush tax cuts enacted in 2001 and 2003 lowered the top marginal tax rate from 36.9 percent to 35 percent. The natural effect of lower tax rates is that the wealthiest get to keep more of their income, which tends to widen the gap between rich and poor, according to the CRS analysis. Lower tax rates, the report suggests, may also act as an incentive for top earners to negotiate even higher compensation the lower the tax rate, the more of each additional dollar the worker gets to keep. Indeed, the report concludes, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.Capital Gains The Bush tax cuts also lowered taxes on capital gains the profits realized when assets, such as stocks or real estate, are sold. At least until the end of 2012, the top capital gains rate is 15 percent, down from 20 percent in the 1990s (the rate was 28 percent before that). At the same time, those at the very top of the scale are making a higher percentage of their incom e from capital gains in 2006, the top 1 percent made 38 percent if their money from capital gains, up from 31 percent 10 years earlier. And when higher capital gains incomes combine with lower tax rates on that money, it makes mathematical sense that the richest household would increase their earnings faster than those lower down the scale.Shifting Social Norms Though harder to quantify than technology and tax policy, shifting social norms may also play a role in the growing income gap, say some economists. Society, as a whole, is simply less aghast at soaring salaries than it once was. Outlining this theory in a 2002 New York Times column, Paul Krugman explained that after the New Deal and World War II, the national mindset tended towards equality of pay and more humble, community-oriented executives. Somewhere around the 1970s, however, those norms simply began to unravel, creating greater social acceptance for the sky-high executive compensation we see today. But Why Do We Car e? If these factors help explain how the income gap got where it is today, they do not answer a perhaps even more important question Why does it matter? Register your own thoughts below, and come back next week for answers from readers and experts alike. Recommended Reading Thank you for reading. As an added bonus, the Salary.com editorial staff has compiled a recommended reading list regarding this topic. Enjoy The Price of InequalityHow Todays Divided Society Endangers Our Future End This Depression Now The Great DivergenceAmericas Growing Inequality Crisis What We Can Do About It The Betrayal of the American Dream Related Salary.com Content Cracking the Dress Code Dilemma Dream Job Pyrotechnician 7 Signs Your Employees Hate You From our trusted Partners From our trusted Partners Home Articles Trends Why the Gap Between Rich Poor Is Widening