Introduction
Income inequality means that the income is distributed in an uneven manner among a population. It generally refers to a society which the income gap between individuals or groups and also the international wealth gap. The percentage of income to a population is often presented by income inequality. It’s also considered as the gap between the rich and others and has been obviously growing for recently years. There have measures for income inequality. It’s important to view this data sets and measures as it can show the differences of a country, especially the advantages and disadvantages. Income inequality should have a clearer data or picture to explain the differences and can be also obtained by using those measures. The “Gini Coefficient” can measure income inequality. Gini Coefficient is the way to measure the distribution of nation residents’ income. Corrado Gini (Italian statistician and sociologist) is the person who developed and published it. The among values of distribution will be measured by Gini coefficient such as income levels. If everyone has the same income, it will be shown as Zero (perfect equality) in the Gini coefficient. Conversely, if Gini coefficient shows one mean that only got one person have the income, as know as perfect inequality. In the United States, there has been growing obviously for income inequality and the gap between rich and others. According to the report of Gini coefficient, united States have the high income inequality and continuously growing. Thus, I will take United States as an example to analyze the causes of income inequality, disadvantages of it and suggest on how to reduce income inequality or the way to overcome the problems of income inequality.

Income inequality problem in America The OECD report shows that United States has the worst income inequality compare to any industrialized nation. Also, the income inequality has been increased more from year 2007 to 2010 and America is ranking at the first nation which has the worst income inequality nation for approximately 12 years. Although the great wealth transfer might be relabeled by the great recession from the middle classes to extremely rich, it is not the reason and cause affect the income inequality in America. The main cause is that congress is never ending giving to the rich through the United States tax code.

From year 1967 to 2011, United States’ Gini coefficient is continuously increasing. It also express that United State is facing a very serious income inequality problem. According to the Gini Coefficient, as we can see that America has increased to the 0.477 in year 2011. It is a very high ratio as it has been increased for approximately 1.5 percent compare to year 2010. Over the past 40 years, U.S have the top one percent and have seen a doubling of its income.

The above graph shows the Gini coefficient in bars of blue is the ratio for disposable household income inequality. There are three countries are worst then United States for the disposable household income inequality, which are: Turkey, Mexico and Chile and all of these countries are Third world nations, it means that these countries is underdeveloped nations of the world. Indeed, the United States is approximately close to third world nations with the poverty stricken because the 15 percent total of population requires for the food stamps in order to survive and live. Furthermore, the dots of yellow in the above graphs represent a horrific statistic. The scale on the right with the yellow dots is the differences between the poorest 10 percent of a nation and the richest 10 percent of a nation. There are two countries were the worse in the wealth gap than the United States in year 2010, which are Chile and Mexico.
Simultaneously, the United States is nearly in the third world situation at that point and most of the people think that the United States is the wealthiest nation on the Earth, but in fact it is just only for selected few. Originally, America is the first world nation in the world, but according to the reports and papers, the situation of America is approximately same with the third world nation. Thus, America should be overcome the problem and avoid the increasing years by years. It will be the wealthiest nation unless it can control the gap between rich and poor.

The causes of income inequality in the United States
In the “Top 1 percent in international and historical perspective” (authors are: Anthony B. Atkinson, Facundo Alvaredo, Emmanuel Saez and Thomas Piketty) report, it have critically analyzed the reasons and causes of income inequality in U.S. This paper is trying to ensure that why the United States will turn into the land of the nots and haves. There are four reasons that the haves have gotten the way to be richer and wiped out by the middle class. The four reasons are: 1. Policy of tax 2. Inheritance and Capital 3. Capital Income vs. Correlation of Earned Income 4. Disparity in compensation and Bargaining – CEO pay
Basically, the main reason and cause that made the United States has this high income inequality is tax code. Reagan and Bush tax are giving the United States more to the top one percent and less than it. It had been overviewed and extensively documented. Then, the earned income and capital income both are different. Earned income means that the wages and salaries from the employees, workers and etc. Capital income is bonus, dividends, interest and so on. Hence, according to the graph that shown at the below, it is top marginal tax rates from year 1916 to year 2010 in the United States for capital gain and income. As we can see that the income is unstable and can’t control. Not only that, this graph is also imply by author that the top one percent of tax rates is too low and also make the managerial earners enabled means that the executives of corporate to negotiate this ridiculous pay packages with the take extra of the United States from the extremely low top marginal tax rates. On the other hand, the greed of the executive (a part of government) is the worse at this point, they are a “destroyer” to demolish the overall of economic growth.

It might be led to the managerial energies to be transferred to increase its remuneration of the employment and enterprise. Thus, it is true from the graph of above because thrashing and layoffs of the United States’ workforce is happen always and daily and the salary of the CEO will never take a hit. Namely, the salaries of executive who is a part of government is take from the staff’s pockets, it is through layoffs often and only take care of their own.

The graph that shown above expresses and proves that the reason why United States’ have the high income inequality is because of its representative government. The government using the legislation of tax and they are trying to whittle away the tax code. The reason they did this is because they want to let the haves to line their pockets while the nots is conversely means under financially if compare to haves.

The effect of high income inequality in the United States According to the reports and graphs that show above, it make the citizens and also the policymakers concern about the increase of the income inequality because it’s not only impact for the salaries of the workers, the opportunity of employment, functionality of political and also rise in unrest of the societal will also be impacted if the income inequality still uncontrolled and can’t be solved. Meanwhile the opportunity of educational will be diminished, leads to lower level educated workforce against a counter factual with less inequality and growth will also be diminished. There are various of the researchers figured out that the income inequality is played a role in the bubble of credit and it will be led to long recession as known as Great Recession. This would be a link of important and worrisome. If so, there is an only way for the most families to get ahead and that way is borrowing. Why do I say so? As more income concentrated to the top are among those with higher propensities to save and also as Fed policy including financial innovations. All this can lead to much cheaper credit, debt to income rations among the broad middle class rose to the new heights by creating an unsustainable debt bubble. Not only that, the wealthy will be favor by the tax code by giving them the optional in order to allows them to make “income” into taxed of vehicles are preferential capital gains and also marginal rates then the gap of income inequality will keep widening because of it. After that, it will be connect by the causal chain to the boom of credit and the 2000s bust. Economic and the political dimension have been added. Thus, the deregulation of policy and practice that widening the sequence by the furthers of inequality linking. Even if the income inequality for growth is little impact but the high levels are still the highly problematic in the United States. The little part of the reason that make all it happen is because of the tax code that controlled by congress. Thus, the Congress has to revamp the tax code completely in order to reduce the percentage of the income inequality in America.

The overcoming method for income inequality