Chavez 1

Eliza Chavez

Ms. Gardner

English 10H/Period 4

2 May 2018

Economic Inequality

Wealth disparity between the rich and the poor is damaging the U.S. by its manner of

distributing wealth to its resources. Economic inequality is the reduction of global inequality and

the increase of inequality within nations. The various measures of economic well-being among a

population is often referred to as wealth gap. This wealth gap will deteriorate the future for the

remaining 90 percent of families because the cut on taxes for the wealthy will cause programs,

resources, and other necessities for families to be unfunded. Money will not go into children's

education nor health care. Instead money will stay in the hands of wealthy people who are now

able to spend more money on materialistic, non-utilitarian items, thus not improving the

inequality amongst our population. Economic inequality must be eliminated because it is

devaluing our education, devaluing our health care, and increasing poverty.

Admittedly, economic inequality will provide jobs that will benefit all Americans.

Nevertheless, when considering the wealth gap between the bottom 90 percent and the top 1

percent, it is preposterous to consider the taxation cut for the wealthy. For instance, this will

increase income inequality, increase the gap for resources (for both high and low income

families), and increase the how much a parent will need to pay for quality goods and child

services (Kalil). Additionally, it would be rational to believe that the government should invest

into the parents so that they will be capable of investing in their children--who will later provide

to the economy with their accomplishments. Although since education spending is only 3
 Chavez 2

percent of the 3.5 trillion dollars the government obtains (Delisle). Bjorn Lomborg, President of

the Copenhagen Consensus Center, brings to light, Anti-poverty group Oxfam International’s

statistics on how this inequality related to education, “... equality is about much more than

money. Look at education... In 1870, more than three-quarters of the world was illiterate. Today,

more than four out of every five people can read.” this progression significantly shows

improvement within society;although, this may be the case now, if the tax proposal goes through

there will be less money to provide children or adults sufficient education. Being only a matter of

time before Americans realize that critical educational programs will be unfunded.

Based on this research, Tom Steyer, American billionaire hedge fund manager,

acknowledges his substantial profit from Trump's tax cut proposal, but he strongly opposes even

a single penny be cut from corporations or the wealthy because of his simple response, “Tax cuts

for the rich defund the critical public programs on which American families depend.” Not only

does Steyer point out the effect of the taxation cut, but he also refers to the Reagan era: where

Republican theories of how their prescribed cuts will create a “cure-all.” Steyer notes:

Every time they put their theory into practice, the rich just get richer and everyone else

gets left behind. When such cuts drain the government of the revenue it needs to pay for

essential services like public education, Medicare and Social Security, Republicans then

seize the opportunity to shrink those programs.

Given that Republicans will shrink programs, not only will education and health care be

disregarded, but there will be a granted increase in poverty within our country. In summation,

economic inequality grants the lack of education and well being of children. And if so, what will

come of future generations?

Correspondingly, the rise in poverty is linked to lack of investment in education: since

 Chavez 3

job holders are denying those with no basic jobs skills (Gillespie). That is to say, economic

inequality should be decimated because of how the official poverty rate came up to 12.7% last

year, which is extremely close to the pre-Great Recession level in 2007, 12.5 %, representing the

40.6 million people in poverty (Bialik). As the poverty rate increased for the second year in a

row, “many poor Americans fell deeper into poverty, According to a Pew Research Center

analysis of U.S. Census Bureau data” (Qtd in Bialik) . Similarly, as defined by the Census

Bureau, families or individuals incomes are below half of the poverty level is now at its peak

from within the last 20 years” (Bialik).This information obviously documents the underhanded

reality of tax cuts. Therefore, economic inequality will surpass its current peak: particularly

worsening the economy and increasing the bottom 90 percent in the poverty threshold.

Initially, the cut on taxes for the top 1% will benefit the market place. James Moore, a

journalist from the Independent Daily, states that conservatives believe, “if you put more money

in the pockets of wealthy people, they will spend more.” Clearly, this proves conservatives are

set on this cliche-ridden argument. James Henry, an american economist lawyer, conducted a

study for the Tax Justice Network campaign group that concludes that excess money does not go

into stores, restaurants, nor other sites that one would expect to be funded (qtd in Moore). What

about the economic boost or new jobs that conservative claim to be a result of wealthy people

spending more money (Moore). Well, jobs are always available as the economy is always

heaving with layoffs and hires (Gillespie). Be that as it may, employers are leaving these

opportunities on the back burners as a result of a lack in available and skilled workers.

Furthermore, this causes many economist to halt when deciding to agree with the tax cut. With

this in mind, the tax cut will allow there to be more money for employers to pay their workers;

however, trainings can take months or even years and to invest a larger quantity of money into
 Chavez 4

someone who is not equipped for the job will often cause a company to decrease pay (Gillespie).

To summarize, those who insist on the taxation cut disclose the economic benefits for our nation.

Forthwith the lack of funding in education, the unnecessary increase in poverty levels and

the propaganda connected with marketing; the well-being and care for fellow friends, family

members, and comrades will notably be too high for many of the bottom 90 percent to afford. As

a matter of fact, research declares that health insurance will be at one of its largest peaks. To

illustrate, Kaiser Family Foundation analysis of National Health Expenditure (NHE) data

declares,

Health spending has increased nearly 29-fold over the last four decades, from $355 per

person in 1970 to $10,348 in 2016. In constant 2016 Dollars, the increase was almost 6-

fold from $1,762 In 1970 to $10,348 in 2016 (qtd in Kamal).

Provided that, two years ago the spending for health care between 1970 and 2016 was 6 times as

much, then how much would it be increased with the future tax plan? Jared Bernstein, former

chief economist to Vice President Joe Biden, asserts that the Republican tax plan clearly goes

after the health care system. “This analysis by Aviva Aron-Dine. She draws heavily on the

Congressional Budget Office’s estimate that repealing the mandate will lead to 13 million fewer

people with coverage and a 10 percent increase in premium costs” (qtd in Bertsein). This

undermining of health insurance market with mandates is to avoid adverse selection: the

tendency for people in high risk jobs to get life insurance. In Bernstein’s article, Aron-Dine, vice

president for health policy, argues that because of this dynamic, “some of the coverage losses

from repealing the mandate would not be ‘voluntary’ in any sense.” Instead, they’d be a function

of higher premiums due to healthier people leaving the risk pool. As a result, this ill-advised tax

plan will please the wealthy donor, shrink government costs, and create a deeper whirlpool of
 Chavez 5

debt for those who are considered to be lower class.

In conclusion, economic inequality must be eliminated because it is devaluing our

education, health, and increasing poverty. Economic inequality will in fact worsen the wealth gap

significantly with the tax cuts proposed by President Trump; as it will take away educational

resources, health necessities, and make it more difficult for Americans to obtain jobs. Therefore,

our communities should refuse to accept this appalling act, our communities should use our

technological platforms to evoke the true outcome of economic inequality. Our communities will

expand to become the voices within our nation in order to illustrate the harm brought upon

everyone but the top 1 percent, and eliminate the one sided distribution of financial assets

amongst them.

Works Cited

Bernstein, Jared. “Perspective | How the Republican Tax Cut Plan Goes after Health Care.” The

Washington Post, WP Company, 27 Nov. 2017,

www.washingtonpost.com/news/posteverything/wp/2017/11/27/how-the-republican-tax-

cut-plan-goes-after-health-care/?utm_term=.1971c480f7bc.

Bialik, Kristen. “Americans Deepest in Poverty Lost More Ground in 2016.” Pew Research
Center, 6 Oct. 2017, www.pewresearch.org/fact-tank/2017/10/06/americans-deepest-in-
 Chavez 6

poverty-lost-more-ground-in-2016/.

Delisle, Jason. “Putting a Number on Federal Education Spending.” The New York Times, The
New York Times, 27 Feb. 2013, economix.blogs.nytimes.com/2013/02/27/putting-a-

number-on-federal-education-spending/.

Gillespie , Partick. “Tax Cuts Might Create Jobs. But Where Are the Workers?” CNNMoney,

Cable News Network, money.cnn.com/2017/12/27/news/economy/tax-reform-job-

skills/index.html.

Kalil, Ariel. “How Economic Inequality Affects Children's Outcomes.” Equitable Growth, 10

Apr. 2018, equitablegrowth.org/human-capital/how-economic-inequality-affects-

childrens-outcomes

Kamal, Rabah and Bradley Sawyer, “How Much Is Health Spending Expected to Grow?”

Peterson-Kaiser Health System Tracker,

www.healthsystemtracker.org/chart-collection/much-health-spending-expected-grow/.

Lomborg, Bjorn. "Inequality also Relates to Education, Health.." Inter Press

Service, 07 Feb, 2018. SIRS Issues Researcher, https://sks.sirs.com.

Moore, James. "Even the IMF Now Agrees that Taxing the Rich is the Only Way to.." The

Independent (Online), 12 Oct, 2017. SIRS Issues Researcher,https://sks.sirs.com.

Steyer, Tom. "I'm a Billionaire. Raise My Taxes." Los Angeles Times, 05 Oct, 2017,

pp. A.15. SIRS Issues Researcher, https://sks.sirs.com.