Mar 31, 2025 By Kent James 5 min read

Economic inequality has grown in the U.S. since the 1980s. From 1970 to 2018, the share of income going to upper income households increased from 29% to 48%, while the share going to middle income households fell from 62% to 43%. CEOs get paid 344 times what the typical worker makes compared to 1965, when CEOs only made 21 times as much. Are CEOs today really 16 times more valuable than they were in the 1960s?

In 1980, there were 13 billionaires in the U.S.; in 2023, there were 801. To put being a billionaire in perspective, you can spend $1,000 a day since the day Christ was born and still not spend a billion dollars. If you made a 5% return on your wealth, a billion dollars would yield more than $135,000 a day. It’s a lot of money.

The top one-tenth of 1% saw collective wealth go from $1.8 trillion in 1990 to $22.1 trillion in 2024, while average income of workers (inflation adjusted) did not rise from 1980 to 2024. In response to Republican charges of class warfare leveled against Democrats seeking to increase taxes on the wealthy, Warren Buffett observed (in 2006), “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” In 2024, the top 12 wealthiest people in the country controlled $2 trillion, twice what they controlled in 2020. In 2024, the top 1% held almost 31% of total net worth in the U.S., compared to less than 23% in 1990. Wealth and income in the U.S. are very unequal and getting more so.

Some argue that inequality is a good thing, because some people work harder or are more talented than others, and they deserve to be rewarded. Wanting available economic rewards can inspire people to work hard and take risks. Most people agree, but there are limits.

First, many of the wealthy were born into riches (32% of the Forbes 400 in 2011), so inequality did not inspire them to work hard. Conservatives argue that the wealthy earned their wealth, so they deserve to keep it. While it is certainly true that creative ideas and hard work helped many of the wealthy achieve their riches, the idea that every dollar they get was due to only their efforts is absurd. If they lived by themselves on a deserted island, then everything they achieve might be due to their effort. Society plays a huge role in helping the rich achieve their wealth.

For example, Bill Gates, one of the founders of Microsoft, certainly played a major role in building Microsoft, and creating value he could own. But Microsoft relied on computers, which had been largely developed by government investments in previous decades. Thinking about it another way, had Gates been born in Medieval Europe, would he have achieved great wealth in that society? Unlikely.

Some people on the left argue that there is no such thing as an ethical billionaire, because no one can earn that much money by operating in an ethical manner; the existence of billionaires demonstrates a flawed system. While I would not go quite so far, I think it is fair to say that no one needs a billion dollars. The lives of the very wealthy are not materially improved by additional wealth, since they can already consume whatever they want. Once you can satiate your material needs, more wealth is about power (or status). The wealthy control a disproportionate share of the earth’s resources.

Now some might argue that the wealthy have proven their abilities through their success in the market, and society is better off if these more talented people control more of society’s resources. This seems to be the approach of the Trump administration, since Donald Trump appointed an unprecedented number of billionaires (16) to positions in his administration, and has given over the task of revamping the government to the world’s richest man, Elon Musk. But just because one can make money doesn’t make one better at other things, as Musk’s mistakes in revamping the government make clear.

One of the problems with wealth inequality is that money does not have the same value to everyone. Musk donated $288 million to Trump’s presidential campaign, and now he seems to be cashing in on his investment. Since he is worth more than $400 billion (as of December), that is like someone who makes $50,000 giving $36. So, for Musk, for what it might cost the average person to take their family out to a fast-food restaurant, he is able to remake the U.S. government to his liking. As Justice Louis Brandeis allegedly said: “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.”

There are a number of policies that could reduce economic inequality. First, overturning the Citizens United decision that equated monetary donations with free speech would prevent the wealthy from buying political power. Making capital gains the same as other income would increase tax revenues, reduce opportunities to game the system, and help the rich pay their share. Why are earnings from investments, where the investor frequently does nothing, taxed less than people who earn wages? Raising the tax rate on the top tax bracket would also help.

Eliminating the wage cap on Social Security taxes, which allows the wealthy to pay at a lower rate than everyone else, would largely solve any solvency issues that the Social Security system has. Finally, enacting a wealth tax on the ultra-wealthy (we could start with billionaires) would start to reduce the most flagrant inequities in our society.

While all of these recommendations ask the rich to pay more, this is not a program to “punish success.” It is simply asking the wealthy to share more of the fruits of their success with the rest of the society that enabled that success.

Kent James is an East Washington councilman.