In his widely trumpeted speech at the conservative Heritage Foundation Wednesday, Republican budget guru and liberal boogeyman Rep. Paul Ryan of Wisconsin rejected the notion that wealthier Americans should pay higher taxes to sustain or broaden a social safety net for poor and middle class workers and retirees.
Instead, he argued, policy should be geared toward allowing high earners to grow the economy, and to facilitate upward mobility for the working class.
America, he argued, exemplifies the latter model while European economies illustrate the perils of the former.“We are an upwardly mobile society with a lot of income movement between income groups,” he argued. “Telling Americans that they’re stuck in their current station in life, that they’re a victim of circumstances beyond their control, and that the government’s role is to help them cope with it — that’s not who we are, that’s not what we do.”
That is what they do in class-riven Europe, he said, where “Top-heavy welfare states have replaced the traditional aristocracies, and masses of the long-term unemployed are locked into the new lower class. The United States was destined to break out of this bleak history.”
Turns out that is — not true.
There are a lot of data available on this issue, but the clearest chart comes courtesy of the Economic Mobility Project, which looked at the correlation between parent and child income in various countries. Turns out in America, you’re more likely to stay rich if born rich, and stay poor if born poor, than you are in most European countries.
“Most studies find that, in America, about half of the advantages of having a parent with a high income are passed on to the next generation,” their report concludes. “This means that one of the biggest predictors of an American child’s future economic success — the identity and characteristics of his or her parents — is predetermined and outside that child’s control. To be sure, the apple can fall far from the tree and often does in individual cases, but relative to other factors, the tree dominates the picture. These findings are more striking when put in comparative context. There is little available evidence that the United States has more relative mobility than other advanced nations. If anything, the data seem to suggest the opposite.”
You can read their entire report below.