The Great Recession Increased Georgia’s Income Inequality

After President Obama called income inequality “the defining challenge of our time” in a speech last December, it has become a topic of political discussion. Just today, Standard & Poors issued a report that income inequality is slowing the recovery from the great recession. According to The Hill,

The rating agency said Tuesday that it had trimmed its economic outlook for the U.S. in part due to the record discrepancy between the wealthy and the poor. Five years ago, the rater anticipated 2.8 percent economic growth, and has now trimmed it to 2.5 percent.

“At extreme levels, income inequality can harm sustained economic growth over long periods. The U.S. is approaching that threshold,” the agency warned.

reason-inedqualityOver at Citylab, they took a look at how much income inequality has increased due to the recession, and here in Georgia, it appears to have grown.

In the map at right, darker blue areas indicate more income inequality.

The study shows income inequality grew in large metro areas, including Atlanta, where it increased by 6%. But the study notes some of the largest increases occurred in smaller cities, including Dalton. The study points out that the GINI coefficient used to measure income inequality rose above .5 in Albany and Athens. These two cities are among 19 metro areas in the U.S. where the measure of inequality is over .5, indicating a larger difference between those earning the most and those earning the least.

Is income inequality in Georgia and the United States a problem? If it is, what can we do about it? Discuss in the comments.


  1. EAVCandor says:

    Why even ask if it’s a problem? Of course it is. Here’s what you do about it: Get rid of corporate taxes and reallocate to top shareholders and CEOs via increased marginal tax rates at the top; raise the estate tax significantly; overturn Citizens United; and allocate more money to the social safety net.

    It’s not like we don’t have a blueprint. This is how we invented the Greatest Generation after the Depression. It’s not about class warfare: It’s about creating a middle class than can at least keep our brand of capitalism on life support, because it’s dying quick in its current incarnation.

      • Jon Lester says:

        That doesn’t make it any less burdensome for those families who inherit, say, a large stand of timber, or a farm with expensive assets, both of which could easily exceed the exemption value on paper. Why should the government be entitled to any of that?

      • EAVCandor says:

        you’re exactly right. A raise would affect barely anyone but would raise something like 50 billion a year with modest increases and a lower rate at which it kicks in.

        it’s .14% of the population who is rich enough to pay this. This super-rich class currently pays less that 15% of their estate value in taxes.

        To Jon below, the CBO estimates less than 20 small businesses nationwide pay any estate tax. None would have to be handed over. The farmer getting his family estate liquidated and taken away is a lie.

        • Jon Lester says:

          I happen to be directly connected to the forestry business. I know what’s a lie and what isn’t.

          I don’t see you offering any reasoning for what makes it right. I’m reminded of how the income tax was originally sold to the people; “it’s only 1% on the richest Americans, not you.” We know how that turned out.

        • Noway says:

          Only 20 small family businesses out of a nation of 310 million people? Even you don’t believe that!

            • Noway says:

              Hell, I can name 20 out of the first 13 letters of my county’s chamber of commerce directory!

              • Jon Richards says:

                Part of the reason so few pay the estate tax is that they use various forms of trusts and other planning tools to minimize what they owe. Some might call what they do taking advantage of loopholes.

                • EAVCandor says:

                  Right. And I won’t even try to defend the hundreds of “liberal” dynasties who use the same loopholes. Hell, the Clintons do it and Bill helped write the law. I’ve got no illusions that the party I most align with doesn’t grossly exploit the same systems they bash Republicans for exploiting.

      • Will Durant says:

        More to do with China obtaining most favored nation status under the Clinton administration, though it wouldn’t have passed without full Republican support.

        • EAVCandor says:

          I’m sorry, you believe America’s income inequality issue began with MFN status being given to China? Or you believe China’s own income inequality issues began then? I’ll listen on the second, but there isn’t a qualified economist in the country who would give even a bit of credence to the notion that international trade is a major factors contributing to equality gaps.

          • John Konop says:

            He is correct their is a direct correlation between trade deals and income spread between rich and poor. This has been going on for about 30 years..

            • EAVCandor says:

              absolutely there is some truth to ‘globalization’ leading to inequality gaps. They are much more pronounced in places like India, China and Mexico. That’s because there is a much more massive divide between the amount of skilled labor and unskilled labor in those areas. Here, in a developed country where over 30% of the adult population has a college degree, the growing divide between the skilled and unskilled, while being a small part of rising inequality, is a fraction of what it is in agrarian developing nations.

              With global trade, you always expect there to be some losers within your own country. But in a country with this much of an educated workforce, the hit the middle class has taken can not even begin to be attributed in significant portions to world trade.

              • John Konop says:


                ……According to the American Prospect, since 2000, the U.S. has lost 5.5 million manufacturing jobs, with 2.1 million jobs lost in the past two years.

                The American Prospect also estimates that, since 2001, 42,400 American factories have closed their doors, and roughly three-fourths of those employed over 500 people while they were in operation.

                According to Moody’s, one million of those jobs will never come back. And the National Association of Manufacturers says that the best-case scenario is 540,000 of those jobs returning or being replaced in the manufacturing sector in the next five years……

                • EAVCandor says:

                  Ah, okay. I will concede that my points were not worded very well. Yes, “globalization” has led to the loss of many old jobs. Technology is increasingly taking jobs from workers.

                  My basic point is that protectionism is not the way to go. I believe (and you believe differently) that the loss of jobs was not and is not inevitable in a global economy. I believe a shift of jobs is inevitable. I believe inequality would be substantially lessened by investment in infrastructure and education so that as economies shift away from manufacturing and more towards automation, the definition of skilled and unskilled changes, so that those in the unskilled category are doing things that the skilled class could not have 20 years ago.

                  We’ve seen this shift coming for decades. But a decimated democratic system has led to no investment in the middle class and thus we find those who would normally have ascended to new roles as automation took over now unemployed or underemployed. Free trade should not be a zero-sum game for the middle. It’s not in more progressive nations like Denmark where companies that lay people off often invest in aggressive and profitable retraining programs to help those whose jobs are outsourced or automated learn new skills and become more valuable.

                  • John Konop says:

                    So you think standing up against slave labor conditions is being a protectionist? Ironic the same arguement many made in the south during our own civil war and sweat shops…..Rather Irronic…..

                  • Will Durant says:

                    I did not even imply that income inequality started with the establishment of our bestowing most favored nation status upon China. I’m saying it exacerbated the elimination of more middle class jobs and therefore more income inequality than the Reagan tax cuts. I am certainly not opposed to international trade. I just want that trade to be on an equal footing. No way should a country that didn’t adhere to basic human rights and civil treatment of its citizens be granted the lower to non-existent tariffs granted to the nations that do. It allowed them to compete on an unequal basis and demolish our manufacturing industries much quicker than it would have otherwise occurred. Not to mention their political differences and support of our enemies. We have reached the point now of prosecuting some of their citizens for spying while at the same time approving them as sub-contractors for certain parts on the F-35 because those parts are not manufactured in this country.

  2. AlexRowell says:

    With S&P and the IMF both coming out and saying that income inequality reduces economic growth, it’s definitely getting harder to put aside as just scare-mongering from the left.

    Just looking at GA, coming to terms with this has to start with education. At the K-12 level, kids in poorer districts have been facing ridiculous amounts of furlough days, and the changes to the state equalization grant ended up just sending more money to ATL-area schools and skipped out on some of the poorest rural ones. Deal’s election year bump in funding doesn’t do enough – these kids in poor areas are still off to a bad start.

    Then once you get to college, out-of-pocket costs have been rising dramatically while scholarships are cut and catered more towards the kids that can already afford it. Results from this are most evident in the massive drop in tech school enrollment after the original HOPE Grant slashing, but you can see them in the university system too: enrollment has been trending downwards. Gotta remember, too, that the inequality reductions from HOPE’s increased education access are counteracted by where we get the money – it primarily takes from the poor due to the lottery funding.

    It’s time to start figuring out how to increase funding for K-12, universities, and scholarships for those who need it. If inequality is a concern, and it should be, GBPI’s new report on revenue options includes info on how each option impacts each quintile.

    Besides education, our lawmakers could look into a state Earned Income Tax Credit (like the federal one Paul Ryan recently said we should expand) and increasing the state minimum wage. After all, recent reports show that states that increased the minimum wage have shown higher job growth than those of us who haven’t. Saying as GA currently has the 44th highest unemployment rate, we’ve gotta turn things around somehow.

  3. saltycracker says:

    Lip service to get the game alive for our side. We aren’t bringing back the middle class by taxing to poo out of the rich, or cutting taxes or raising the minimum wage or subsidizing higher poverty levels.

    The latest Obama move was the 3.8% net investment income tax to help fund Obamacare with taxable incomes over $450K or MAGI’s over $200k. The money folks termed it “insanely complicated” with a late delivered 400 pages of regulations. No sooner did that come out than the money folks issued a list of ways to significantly reduce or eliminate that tax. Political quid pro quo ? Some of the good ones are “lend money to your business” or “rent your property to your business, even if you don’t materially participate in that business”.

    The main folks that get nailed by the tax codes are the compliant middle class that get W-2’s and 1099’s with their main assistance being via TurboTax. They are surrounded by the 49% that pay no income tax (but 🙂 paying sales taxes and getting deserved credits) and those high earners with more loop hopes (for excellent reasons 🙂 too) to work with than their CPA can enter.

    No government is going to outsmart those advantaging a complex system except the few falling into selective enforcement. Every taxpayers energy is excessively focused on beating the tax system and/or getting their cut (defined as more than the other guy) ILO productive output. And their politicians will not disappoint them.

    The way to end inequality is to stop being so unequal.

    We will always use taxes to drive some objective but thousands and thousands of pages no one clearly understands ?
    The road out is to dramatically overhaul the tax code. Toss it out, start with tithing. Earnings over over $1,000, send in 10% (or less). No exceptions, exemptions, subsidies, rebates, refunds, credits, deductions. Then slowly tweak it. The states can live on sales taxes with the same rules, retail/wholesale, no exceptions, tax internet purchases, no tax free days/stuff. The counties/cities can live on commercial/income generating property taxes and sales taxes.

    • gcp says:

      Agree and we can start by replacing Ga income tax with a consumption tax but I am not too optimistic it will be done.

      Chuck Martin introduced a bill last session in the Ga legislature to eliminate the useless 5000 tax credit on electric vehicles but it did not pass so trying to change the entire tax system will require some real leadership.

      • saltycracker says:

        It will not happen with our legislators until a visionary leader steps up at a time the average voter realizes he is screwed and lost control of his life to being governed. Until then most will do what they can to manipulate the system in their best interest.

  4. Noway says:

    To the Redistributionists here, how much of a person’s labor (money) do you think you’re entitled too? Please list percentages on the federal, state and local level. Can you also opine as to how much of a person’s lifetime of monetary achievement (Death Tax) you think you’re entitled to, seeing as how their money has already been taxed in their lifetime. And have a toast to celebrate the passage of the first federal income tax roughly 100 years ago. Please remember that this was generally sold as a tax on the wealthy families of the Northeast, that would not affect over 90% of all Americans. Class Warfare has been around a longggggggggg time.

    • EAVCandor says:

      I’d gladly take five minutes out of my day to give you plenty of numbers from decades of independent economic study. However, the fact that you equate labor with money is a pretty good indicator that you haven’t the slightest clue how any of this works.

      Thanks for the Death Tax reference, though. I got a hearty chuckle from that little nod to your blind partisan hackery.

      • Noway says:

        Dang, EAV, I wish I were as enlightened as you. Thanks for your non-answer, answer. And don’t you equate the Minimum Wage you so want to expand to $500 an hour with how much (money) you’ll pay some poor, exploited and cheated soul for an hour of their labor?

        So, I’ll ask again. How much (percentage) do you want to take from each person in the form of taxes?

        • Ellynn says:

          Labor is subjective to need, experiance, and yes, even taxes. You know it. If taxes were based on a percentage of what was taken from each person , why are my taxes (by percentage) higher then your average hedge fund mangers?

          • Noway says:

            Ummm, because your tax rate, I’m assuming, Ellynn, is based on the fed and state IMCOME tax rates and not capitol gains rate paid by that evil hedge fund guy. Oh, and same for Warren Buffett and his secretary.

            • EAVCandor says:

              At what point do you concede that this is a huge part of the problem? You wanted numbers. Okay, if we want to use history as a guide, the economy did best when the top marginal rate was 91%. Dwight Eisenhower was the president, someone you as a Republican probably revere.

              We need more marginal brackets. The highest bracket tops out at like 388K a year. You think we don’t need those CEOs making 26 million a year to pay more? I’d like to know why. NO ONE in a non-perverse market is worth millions time more than median wage earners.

              What does it take to get people on the right to see that this isn’t class warfare? It’s a fight for basic rights and a fair shake and an attempt to keep our economy alive. Sir, unless you are very rich, you are getting screwed. And you can continue to let rich white men tell you that this is just the way things work, or you can actually look back at our history and see very plainly that laissez faire capitalism failed, trickle-down economics failed and the only thing that ever worked for us was large-scale investment in the public. Nothing else keeps capitalism alive. Period.

              • Noway says:

                You are worth, in terms of compensation for your labor, what the market says you’re worth. Was lawyer, Johnny Cochran, worth what he charged OJ for his criminal defense work? The market said his talents in the courtroom were worth a premium. Was Chipper worth 15M a year to the Braves as a switch hitting slugger? The market for switch hitting sluggers said it was. And I’m fairly certain both Cochran and Chipper paid more in all taxes than the 388k figure you cited.

              • John Konop says:


                You are grabbing numbers without looking at all variables…The solution is wages…..not tax and give it away……Wage pressure was from 2 factors….trade deals that promoted 2 dollar a day workers and a rush of illegal immigrants with no real rights…..This is basic economics…..The reason the father of the free market system Adam Smith was a major abolitionist of his time. He was clear in his writings that workers must have the same legal rights as the employer or you would have distribution problem with wages….ie large gaps between rich and poor…..unless you fix trade deals and immigration you cannot fix wages…if you look at the economic data China is having the same problem in their banking system and economy ie cannot sell 200k condos to 2 dollar a day workers…. Henry Ford 101 workers need to make enough to buy the products they produce….

                • EAVCandor says:

                  i agree with you. Real wages must increase. But I believe we’ve seen how much ‘free markets’ can really contribute to raising real wages. That’s to say, not much at all. The only time we’ve seen real wages rise with consistency is at times when the rich were taxed more and the revenues were spent on public services and social goods. I’m not just making this up. There’s 30 years of economic data from the 40s through the early 70s that show this happening. And then we started to regress as taxes at the top went down, money was funneled to the rich and then stored away as ‘wealth’ and workers began to suffer.

                  Can you really say with a straight face that it’s not disgustingly regressive that the highest marginal tax rate kicked in at over 400,000 dollars 70 years ago and it kicks in at less than that now, NOT EVEN ADJUSTED FOR INFLATION? A doctor making 200,000 a year is paying a marginally lesser portion of his income than a guy who makes 8 million to run a company into the ground. How is this free or fair?

                  • John Konop says:

                    ….. rich were taxed more and the revenues were spent on public services and social goods..

                    The problem with your theory is every country we entered into free trade agreements saw an increase between rich and poor. All of them on tax systems all over the board. The real issue is wages…..the biggest driver is trade deals that promote slave labor conditions….I do think some reform is need…..but it is not the major driver….It is pitting middle class workers against slave labor conditions in other parts of the world. The wage issue between rich and poor is happening as well in the western countries they also have tax systems all over the board….

          • saltycracker says:

            Ask Obama – capital gains taxation is a law that has beneficial parts and is another animal from the interest carry forwards the hedge fund managers enjoy big bucks from.

            Obama could fix that but will probably pass as they are BIG donors and can do good $$$ things for him. A despicable President not because he advantages himself but because he runs a con of caring about the average working American.


          • Ellynn says:

            I know why my rates differ, and as I mentioned – it is all subjective. Which was the point I was trying to make.

            We also over look the increased use of the stock dividend to the decline of the wage. A companies success is based on whether or not it meets the amount someone on Wall Street assigns it. A company that can make a $2 billion proffit and pays out a dividend of $3.05 a share instead of the expected $3.10 a share is ruled as having a bad quarter. Companies to be viewd as successful will do what it takes to make that didvend. If it means not increasing wages or lowering benifits that year, then that is what they will do. Manufactering that drove the wages of the post baby boom did not have this level of excepted stock pay out. Money was used to retain a skilled and long range work force that under todays capitalistic stock driven work is used to keep the expected level of sucess.

            • saltycracker says:

              Not exactly. Dividend payouts as a measure got out of vogue long ago and with the financial crisis are making a slow comeback. Dividends are good, the ones that payout too much of their earnings are rare and usually utilities or REITs or such that have some commitment to shareholders.
              What hacks me off are two types of Corporations that in lieu of dividends or capital expenditures to grow the business :

              A. Pay enormous bonuses/wages to execs that are just minding the store.
              B. Quasi government bodies, like utilities, defense, that run up all their costs in order to stay under profit guidelines.

    • MattMD says:

      You do know this “death tax” is a silly issue that only hacks bring up? It hardly applies to anybody out there.

      • Noway says:

        Ever the collectivist/socialist, Matt. It applies to and it not a “silly issue” to the freaking INDIVIDUALS who have made money that should not have over 50% of their assets seized by tapeworms like you when they die. The gov’t has no legitimate claim on money made by someone else throughout their life. None. What right do you or the gov’t have to raid someone’s life of effort and sweat equity?

        • MattMD says:

          I would bet my next paycheck I make a lot more than you do, tapeworm. I just don’t have some pathological issue with paying taxes. Two of a thousand people ever even pay it.

          Often it really isn’t “sweat equity”, the large part is inheritances and wealth which has avoided previous taxation due to loopholes.

          Quit acting like a damned water-carrying fool and educate yourself:

          • Noway says:

            Ahhh, the ever present hate of “inheritance!” “But, but, but, but, they didn’t earn that money!!!!” you say as spittle drips from your lower lip!! Be sure to amend your will this week, Dr. Warbucks, so that nothing is left for your family when you leave this world. Because Junior Matt or Ms. Matt didn’t earn it, only his/her father/husband did. God, you are as predictable as the morning sunrise. Keep on posting, Matt, you are a hoot!

  5. State lawmakers read Peach Pundit. Do any of them plan to hold substantive discussions about this issue (and possibly pass legislation) during the next session?

    • EAVCandor says:

      Pretty good, Thomas. I hope you were going for humor there. If Deal is governor, why would any lawmaker have to talk about anything uncomfortable?

      I’d like to hear from some state lawmakers as to how these businesses the Gov is bringing to our state contribute anything but part-time employment to a small number of people and excessive environmental pollutants when Deal will slash their taxes to zilch just to get them in our state.

  6. Left Turn Only says:

    The real problem with current US capitalism is we have a large swath of unneeded, unwanted people in this country. That would be the ones who once were called middle class. We now seem to need (and want) the very wealthy and the poor who serve as their serfs. Perhaps instead of whining about deporting deporting anyone not born here, the GOP should start calling for the deportation of the real drains on society – the former middle class.

  7. Noway says:

    Just how big of a tingle did you all get coursing down your leg in 2008 when Obama told Joe the Plumber that “we just need to spread the wealth around”? I’ll bet it was seismic!
    Apparently we do not own the fruits of our labors. Amazing!

    • Noway says:

      I guess you’ll keep working until you pay off that house you signed a promisorry note for. You’ve heard the old song, “I owe, I owe, it’s off to work I go…”

    • Michael Silver says:

      You’ll always be a serf to the government.

      Think I’m nuts? Think about this …. what happens if you don’t pay your property taxes?

      Men with Guns will kick down your door, forcibly remove you from the house, and throw all of your possessions onto the sidewalk. That’s if you are lucky. Sometimes the Men with Guns just shoot you and your dog.

      So, are you really the King of your Castle or are you a renter of government property?

  8. greencracker says:

    The rich get richer and the poor get poorer, though policy can ameliorate that. Maybe by more taxes on unearned income (investments, rents, etc) or even wealth (money in capital investments) rather than earned labor income (your paycheck).

    Capital gains are taxed at a lower rate than labor. That is a benefit that accrues to people who, for whatever reason, have fortunes. If you have capital, your cash pile will grow faster than if you are merely working.

    If I earn $50 k from work, the tax is like roughly 33%. If I inherit $1 million and invest that and earn 5% a year, that’s $50k taxed at a maximum of 20% (depending on my income tax bracket.)

    • Jon Richards says:

      Um, let’s do a reality check. If you make $50,000 per year and take the standard deduction, filing form 1040EZ, your effective tax rate is 11.9% if you are single, or 7.2% if you are married. That’s a long way from 33%.

    • saltycracker says:

      The dividends you received are an after tax distribution.
      The government just skims the pot one more time.
      Calling a recipient of gains/dividends those with fortunes is beyond silly.

      • Harry says:

        This country has by far the highest corporate tax burden in the world, and it’s making us uncompetitive.

        • EAVCandor says:

          Well, not after all exemptions. We are right on par with other developed nations when you look at what is really being paid. Plus, how many of the top companies are actually paying taxes in America? Now, we could fix that problem so they couldn’t skirt our taxes with inversions (no idea how we could make that happen). What is more feasible is to look at how the big companies are parking massive amounts of cash in dividends or profits instead of expansions and put some heat on them to cut this crap out and invest in growth and jobs.

          • Harry says:

            For example our max corp bracket is 39%, in Canada it’s 15%. Sure the big public corporations can avail themselves of all sorts of lobbied/legislated benefits, but for smaller companies it’s a killer. The US is out to kill the middle class and the small/medium sized companies associated with the middle class. Warren Buffett is doing great, thank you very much.


            • EAVCandor says:

              I fully agree. The rate itself is too high and the ways that companies skirt the rates screws over the little guy and the middle class.

          • John Konop says:


            If you change dividend tax with interest rates so low you could end up screwing up consumer spending….Retires use dividend money in place of interest income to live on….Also many small business people do the same…..if you change the tax rate than it would have a dramatic effect on consumer spending….

            • EAVCandor says:

              I would advocate for low dividend taxes on anyone who had long-term assets in a company. A guy who built his retirement on blue chips wouldn’t be taxed the same as top shareholders.

              This is why I do not advocate for flattening our tax system in any way, shape or form. Obviously, when you’re taxing a hedge fund’s dividends the same way you are taxing a retired storefront owner’s, consumer spending will suffer.

        • saltycracker says:

          The shenanigans will increase until the tax code is addressed.

          Every new restriction will be met with an equal, opposite or inverted shenanigan.

  9. Dave Bearse says:

    The US population is increasing at 2% annually, GDP at 3% annually, and profits at 7% annually.

    But hey, reduced taxes will trickle down to increase wages, if it weren’t for pesky mathematics. It’s not called a “Laugher” curve for nothing.

    • saltycracker says:

      Reduced tax revenues will not be the outcome of reduced rates and the elimination of shenanigans.

Comments are closed.