The last time that yearly GDP growth in America was at least 5% was in 1998, and the last time that yearly GDP growth in America was at least 7% was in 1983, yet countries such as Ireland, Iceland, Cambodia, Vietnam, China, and Ireland are all able to grow their GDP at the rate of 5% or better. Further, taking a look at United States household income, advisorperspectives.com reports that real income growth for the top quintile from the period beginning in 1967 was 91.0%, but was just 33.0% for the middle quintile, and the fourth and fifth quintiles were both under 30.0%. Additionally, real household income for the fourth and fifth quintiles peaked in the years 2000 and 1999, respectively, and since that time their incomes have declined in inflation-adjusted dollars.
All of this indicates, what most people are fairly familiar with, that the rich have been getting a lot richer, and the poor have been falling further and further behind, not to mention that our great middle class of America, has been weakened considerably especially in stark comparison to the first quintile growth of household income. These trends which have been in place for fifty years will continue until such time as real tax reform is enacted that rather than under taxing capital gains as well as other investment gains, taxes them appropriately. Our convoluted tax code is purposely structured in a way, that the privileged are afforded special advantages of tax code loop holes that are simply not available for the common class. This means the rich are able to get richer significantly because investment income is taxed considerably less than wage income while also being tax protected for long periods of time by simply following a buy and hold strategy which isn't tax at all, whereas those subject to primarily making their money from wages, are accountable to tax codes that they cannot escape from.
So too, when money is held in fewer and fewer hands, economies begin to stagnate or have their growth slowed considerably because very rich people spend only a fraction of their money that has been "earned", preferring instead to grow their retained earnings in passive investments such as in equity and bond markets, or similar, while also making sure that such investments are as tax protected or tax savvy as possible, so that their principle will not be negatively impacted. So that, you get the dual combination, of tax revenues on a per capita basis, being suppressed because very rich people are very good at tax minimization and tax avoidance, along also with massive amounts of money and assets growing for the people that already have more than enough, and therefore aren't going to spend it, but rather are going to invest it, or save it, though, some of it is invested in the American economy to help it grow.
On the other hand, those in the lower income quintiles, spend a much higher percentage of their money that they earn, primarily because they need things like clothes, medicine, food, and other basic necessities and desires in order to live a proper life. So that, the growth of a nation, comes down to not only the money that is earned and made, but also the velocity of that money, and people that have less money to begin with, spend and utilize it at a much greater rate, which equates to higher velocity of such money, and thereby to higher GDP growth rates.
The low GDP growth rate and the low wage growth rate for those in the middle and lower quintiles, reflects that this country clearly favors the rich in its tax policies and opportunities, and unfairly burdens the middle and lower classes by making them pay full value for the services that they need and utilize in order to live, while providing them with reduced hope, little fairness, and less opportunity to ever get out from under.