April 11, 2003

The cost of war

Fortune's Geoffrey Colvin provides the numbers:

The average family is being asked to pay $625 for the war. If we assume the cost will come from federal tax receipts one way or another, then average families in the poorest quintile by income would pay not $625, but just $33 each. By contrast, families in the richest 5% would pay, on average, $4,700 each. Families in the richest 1% would pay $13,000 each.

Is this fair? Unfair? Decide for yourself, but keep the big picture in mind. Conventional wisdom holds, correctly, that income inequality has been increasing in recent years, though it still isn't as great now as in some past periods. But while incomes are distributed unequally, the federal tax burden is distributed far more unequally.