So I went on a quest to find out how we define those classes. I came across one estimate from 2005, with the source cited as the U.S. Census Bureau. Take a look at these numbers:
I got to looking around the Census Bureau's site, and was interested to find all sorts of statistics and narratives on "income inequality." That got me thinking even more.
When did the United States become a country in which all people should have equal income? I'll give you a hint: Never. We need to let go of this idea that everyone should be on an equal playing field financially.
It's no secret that some jobs are worth more than others, which is why their pay and benefits are higher. Some require specialized knowledge, others have a higher degree of danger involved, and others might be considered dirty jobs. Often, reasons like this mean that the workers in those positions are paid more. It's just a matter of the free market working to offer wages that will bring in qualified and competent employees. Inequality gives people a reason to get educated, work harder, and innovate. If they're successful, they can enjoy a better standard of living.
Where in the world have we seen a successful implementation of Socialism? Nowhere. That system simply doesn't work. Trying to make everyone "equal" in pay and standard of living actually gives people a reason to work less and not try. Why should they try harder if their income is just going to be taken away from them and redistributed to others?
Unfortunately, that's the direction in which the United States is heading. Create ever higher taxes on the "rich" and redistribute their wealth to those below them. Except all that does is discourage the rich from investing and starting new businesses, and it discourages the lower classes from trying harder. Why try when you are likely to get everything you need handed to you by the government?
I'm not saying we don't have a responsibility to help out those in need. Certainly we should have safeguards in place to make sure children don't starve and people have emergency shelter options and the like. Offer those in need a helping hand, but don't give them a permanent meal ticket paid for by the rich. Let's get back to the roots of this country: Freedom and innovation were key. Those who worked hard to better themselves reaped rewards. That encourages others to work hard and prosper as well
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.