Joe The Plumber And The Wealth Gap

The latest hot-button issue in a hot-button campaign is distribution of wealth. It was seized upon by the McCain campaign when Senator Barack Obama told the now-famous Joe the plumber that nobody likes high taxes, but "when you spread the wealth around it's good for everybody."

That was it. Senator McCain accused his opponent of waging class warfare. He suggested that Obama might be talking socialism. Why McCain should be concerned is hard to imagine.

The Bush administration is engaged in a gigantic redistribution of wealth to the banks.

Perhaps it is redistribution to the poor that the Republican nominee is worried about. The gap between rich and poor is greater in America than in any other advanced democracy. Differential tax rates have been at the core of the American tax structure since 1913. That's when the 16th amendment to the Constitution created the income tax on persons and on corporations.

There have been periodic proposals to substitute a flat tax or a consumption tax which would treat the wealthy and the poor even-handedly. In America, where the top 10 percent reached a level of income share not seen since the great depression, the differential income tax has remained secure.

There are other ways of shifting wealth that few would call class warfare. Unemployment insurance. Food stamps. Housing vouchers. Earned income tax credits.

And, funny thing about Joe the unlicensed plumber. According to the bureau of Labor Statistics, the average annual income of real plumbers in Ohio is under $48,000.

Senator McCain may argue that creating new wealth is better than redistributing existing wealth. But shifting wealth has always been a part of the American credo. And shifting wealth is not inconsistent with creating wealth.