Great Graphic: Tax Code as Tool in Class Warfare

Here are is a Great Graphic that captured our attention.  The first is from the Citizens for Tax Justice courtesy of NPR.  It shows that the return to labor (wages and other earned income) is taxed at a considerably higher rate than the returns to capital (capital gains).  Moreover that gap has widened over the past 20+ years.  

The second chart (below) is from the Economist blog, Democracy in America.  It shows the income share of the top 0.01%.   It illustrates what has happened since the early 1980s.  A super rich (rich always being understood in relative terms) class has emerged in the US.  Of course, there has always been an upper class in the US, but what is different about now is that is has happened to some extent through the manipulation of the tax code. While acknowledging many forces at work, the reduction in the sharp reduction in top marginal tax rates appears to be one of the key factors that have helped shape the disparity of income (which in turn impact the distribution of wealth--though the Economist article sometimes confuses the two.  

This suggests that in addition to being driven by a relentless profit-seeking motive, there is also an element of rent-seeking in widening income disparity in the United States that often goes unacknowledged by observers on both the Right and Left.