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Millions of people from all around the world see the United States as a land of opportunity. They come here, whether legally or illegally, in order to find better jobs, get a better education, and improve their standards of living. Most importantly, however, they come for the freedoms and human rights guaranteed by the United States Constitution. Many of them are escaping war zones, high crime rates, extreme poverty, and political and economic instability in their home countries, and come to the United States with dreams of better lives for themselves and their children. They understand that to reach these goals they will have to work hard, often starting with low-wage jobs, and make many sacrifices. The American Dream is the idea that with enough hard work, anyone can become successful, achieve material wealth, and advance their socioeconomic status. From the nineteenth-century coal and railroad barons to modern tech billionaires, Americans have been captivated for generations by rags-to-riches stories. The idea that humble beginnings are not an obstacle to economic success is built into the foundation of this nation. In truth, however, in the late twentieth century, American society underwent political and economic changes that have made this concept largely unattainable. Stagnating wages for the middle class, the decline of workers unions, tax laws that favor the rich, rapid technological progress, and trade globalization are just a few of the causes that have reduced peoples chances of attaining the American Dream. Although the average American workers salary is at a record high, the income gap between the top one percent of earners and the other ninety-nine percent is the widest it has ever been.
Social mobility in the United States is on the decline due to growing inequality in the distribution of wealth. Sam Pizzigati, a veteran labor journalist, writes that in 1980, this bottom 40 percent of Americans took home twice as much income as the richest 1 percent of Americans. By the end of the Reagan era, the wealthiest 1 percent earned the same amount of income as the bottom 40. The Reagan administration tried to stimulate the economy by creating a so-called trickledown effect by limiting government regulation and reducing taxes on businesses and capital gains. The idea behind it was that the more money remained in rich peoples pockets, the more they would spend or invest in new enterprises, which would then help the poor and the middle class in the long run by creating new jobs. The reality, however, is different. According to the 2012 study commissioned by the Tax Justice Network, The Price of Offshore Revisited, the rich typically hide the bulk of their earnings in offshore tax havens instead of reinvesting them in the economy. The estimated amount of money that is sheltered from taxation falls within the range of $21 trillion to $32 trillion, which is more than the gross domestic product of the American and Japanese economies combined (1). This is proof that trickledown economics is ineffective. Although the origin of the enormous wealth obtained by some people may in fact be attributed to hard work and ingenuity, the ability to shelter wealth from taxation and then pass it on to the next generation without a reasonable tax burden is a large part of what contributes to insurmountable income inequality, creating a haves and have-nots society.
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