The No Shit, Sherlock Study of the Day

The driving force of income inequality is capital gains and didvidend income that is taxed at lower rates than regular income:

The new study was performed by Thomas Hungerford of the non-partisan Congressional Research Service. Though the study is not a CRS product, Hungerford’s data is widely cited on both sides; he’s an impeccably objective analyst.
Here’s what Hungerford found: The single greatest driver of income inequality over a recent 15 year period was runaway income from capital gains and dividends.
This finding is directly relevant to the current debate, because Obama and Democrats want to offset the sequester in part by closing loopholes enjoyed by the wealthy, such as the one that keeps tax rates on capital gains and dividends low. Dems want to do this in order to prevent a scenario where the sequester is averted only by deep spending cuts to social programs that could hurt a whole lot of poor and middle class Americans. Republicans oppose closing any such loopholes and want to avert the sequester with only deep spending cuts.
Hungerford’s report, like all serious examinations of inequality, is very complicated. He looks at a bunch of recent data on inequality from the period from 1991-2006 — measured by the so-called “Gini index” — and calculates the degree to which various factors exacerbated it. Hungerford found that over that period, the rise in the Gini index (a story that’s been widely told elsewhere, one that’s largely been driven by the runaway wealth of the top one percent and top 0.1 percent) was driven mainly by the rise in capital gains and dividends income.

It doesn't take a genius to figure out that taxing wealthy folks at 15% of dividend and capital gains income (even if it is millions of dollars) while taxing folks making $400,000  35% would lead to greater income inequality isn't very hard to figure out.  If a person makes $1,000,000 in dividend income, they probably have at least $20 million invested, and they would pay $150,000 in taxes, while a person making $500,000 would pay 35% on every dollar above the $400,000 or so that starts the top rate, who's going to end up with more money?