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Homer Gets a Tax Cut:
Inequality and Public Policy in the American Mind
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For the past thirty years, the United States has been conducting what one observer
(Samuelson 2001) has called “a massive social experiment” regarding the political and social
consequences of increasing economic inequality. The share of national income going to families
in the bottom 40 percent of the income distribution declined by about one-fifth, from 17.4% in
1973 to 13.9% in 2001, while the share going to families in the top 5 percent increased by more
than one-third, from 15.5% to 21.0% (Mishel, Bernstein, and Boushey 2003). Meanwhile, the
share of income going to the top one-tenth of one percent quadrupled between 1970 and 1998,
leaving the 13,000 richest families in America with almost as much income as the 20 million
poorest families (Krugman 2002). The economic causes of these trends—technological change?
demography? global competition?—are a matter of some scholarly controversy. But the
important political point is that, whereas most rich democracies have significantly mitigated
increasing economic inequality through government action, the United States has mostly been
content to let economic trends take their course, doing “less than almost any other rich
democracy to limit economic inequality” through employment and wage policies, taxes, and
transfers (Jencks 2002, 64).
In light of these developments, business writer Robert Samuelson (2001) argued that “If
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Earlier versions of this article were presented at the 2003 Annual Meeting of the American Political
Science Association and in seminars and conferences at the University of Michigan, the Center on
Budget and Policy Priorities, the Brookings Institution, and Princeton University. The research was
generously supported by a grant from the Russell Sage Foundation to the Princeton Working Group on
Inequality.
Convention