The Economic Recovery Tax Act Of 1981 Essay

The Economic Recovery Tax Act Of 1981 Essay

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Looking at this graph you can see that the real family income of the 95th, median, and 20th percentile from 1947 to 1979 were steadily moving together. This shows that during those years income inequality was low and people were for the most part make similar wages. A change came when the 1980 's started, where the 95th Percentile continued to grow at a faster pace than both the median and 20th percentile. I believe that technology could be one cause of this, because during this time computers and other technologies were becoming more usable and incorporated into the workforce. Some jobs were being replaced or even less skilled oriented because of technology, which can make it easier to lower workers ' wages. This graph questions; what happened in the 1980 's to cause this rift between the 95th percentile and both median an 20th percentile. Another belief I have, on what could have caused this rift was the tax changes and a increase in real income in high income families during the 1980s. The Economic Recovery Tax Act of 1981 (ERTA) lowered taxes for high income earners at a higher rate than middle and low income families. The government believed that higher lowered taxes for high income earners would make them put more money back into the economy than middle and low income earners. Unfortunately this did not pan out the way the government wanted.

Goodwin talks about age being a reason why there is a wage differences, which is very evident in today 's society. Goodwin breaks it down by the "younger group having low incomes and even lower assets, the middle-aged group having a higher income and more assets, and the retirees having low income and high assets." (Goodwin, 2014, p. 228). This statement shows that it take...


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...orkers, a fair chance to make a living and the ability to afford the products that come into the state.

There is still a lot that we need to do as a society on the issue of raising the minimum wage. I believe that increasing the minimum wage to $10.10 does not benefit our society enough, and will still cause the same inequality problems we face now. As a society we need to make affordable prices of products or weigh product prices to how much we set the minimum wage to. I do not understand why we do not value blue collar jobs as compared to white collar jobs. Blue collar jobs do a lot of the grunt work; why should they not be compensate well for their work. Looking forward, in the future, I really hope to see the government give more tax break incentives for minimum wage workers to allow them to make better investments and to slowly reduce the inequality gap.



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