In a democracy, income inequality should in theory correct itself. The poor majority should vote to tax the rich and divide the proceeds among themselves. But that’s not happening in the United States. In fact, inequality has been rising for decades.
Scholars suggest various explanations. Here’s one possibility that few have discussed: Poor voters may oppose a policy of higher taxes and income transfers because they wrongly think they’ll be victims of it.
The idea that in democracies the poor soak the rich goes back to Aristotle. The economists Allan Meltzer and Scott Richard formalized the logic in a classic paper. If the majority gets to set a flat tax rate and share the revenues equally among all voters, then when incomes are especially unequal, the majority should set the rate higher.