This week, the Senate Republicans unveiled a tax plan that would increase inequality in the United States.
Don't take my word for it: The nonpartisan Tax Policy Center has found that "the largest benefits, in dollar and percentage terms, would go to the highest-income households." Wealthy shareholders and corporate executives stand to reap outsize benefits, as do men and women who inherit wealth. In a new report, the International Monetary Fund warned that these kinds of tax strategies exacerbate inequality.
This is especially troubling because over the past few decades, the heaving gap between the rich and poor in the United States has grown. A lot.
Today, America's top 1 percent control more about 38.6 percent of the country's wealth — nearly double the wealth controlled by the bottom 90 percent of the population. Over the past 35 years, that gap between rich and poor households has exploded. The middle class is more dependent than ever on debt to finance homes, cars and education. Meanwhile, corporations and wealthy individuals are able to pour tons of money into influencing American politics. Laws are increasingly tilted to serve the economic elites as a result.
That's scary for a country founded on the idea of equality. And it is even more terrifying when you consider this: Income inequality is bad for democracy, according to research.
For one thing, it makes us trust our political system less. One study, by Michigan State University professors Sung Min Han and Eric C.C. Chang, found that growing inequality "drives the gap in satisfaction with democracy between electoral winners and losers."
The pair looked at data from 43 countries. In each place, voters were asked, soon after an election, how satisfied they were with the way democracy works in their country. They were also asked whether they supported the winning or losing party in the election.
When a large disparity exists between rich and poor, the study shows, partisanship flares because both sides are fighting for a bigger share of the economic pie. And the losers become even less satisfied with the political system.
"Economic parity produces a similar level of democratic satisfaction between electoral winners and losers," the team wrote. "But as income inequality grows … electoral winners are more satisfied, while electoral losers are more discontent with the way democracy works."
"Our findings suggest that rising income inequality pits political winners and losers against each other," Chang concluded in announcing the study. "And this conflict over economic interests can undermine citizens’ satisfaction with democracy, and lead to instability."
That's in large part because hyper-partisanship and polarization can destabilize democratic governance. They make it hard for people from different parties to find compromise, common ground or even community. That leads to political gridlock, dysfunctional institutions and declining trust.
As divides grow, it becomes more and more challenging for a government to accomplish anything. As political scientist Lilliana Mason put it, "The more sorted we become, the more emotionally we react to normal political events." Politics often intensifies anger. And when that happens, she says, we become less capable of "finding common ground on policies, or even of treating our opponents like human beings."
Partisanship also makes us distrustful of any politician from the other side. In this environment, every losing election is an emergency. At its worse, partisanship makes us doubt the very outcomes of elections, leading to political unrest. Inequality is "very dangerous," Ngaire Woods, dean of the Blavatnik School of Government at the University of Oxford, told Reuters. "If people can’t aspire to succeed within the system, they will aspire … outside the system, in ways that break the system."