By HANNAH DREIER, Associated Press
As the middle class struggles to make gains and President Barack Obama strives to shine a spotlight on the issue of income inequality, an unlikely constituency is looking for ways to close the nation's growing wealth gap: A handful of top U.S. business tycoons.
These advocates point to notions of fairness and admit to twinges of guilt, but the core concern driving all of them — left, right and libertarian — is a belief that the economy doesn't function efficiently when the wealth gap is wide. They are proposing solutions that range from pressuring fellow entrepreneurs to pay workers more to simply giving their money back to the government to redistribute.
Since roughly 1980, the wealthy have been prospering while the middle class stagnates or falls behind. Members of the 0.1 percent now make at least $1.7 million a year and grab 10 percent of the national income, while the median annual household income has dropped, landing at $51,017.
The gap is growing wider. Income for the highest-earning 1 percent of Americans soared 31 percent from 2009 through 2012, after adjusting for inflation. For everyone else, it inched up an average of 0.4 percent.
As U.S. society has grown more unequal, rich men and women have set up clubs and foundations to encourage economic parity, and they are actively lobbying for change.
The figure of the fairness-conscious billionaire has a precedent, said Harvard Business School professor Michael Norton. During the Gilded Age, at the end of the 1800s, tycoons took steps to increase equality and help the working class.
"Names like Carnegie, Mellon and Rockefeller — the (Warren) Buffet and (Bill) Gates of their days — grace universities, museums and medical centers in part because the originators of those fortunes gave back," Norton said. "In the same way that some businesspeople are now taking steps to address climate change due to its effects on costs and revenues ... the notion that inequality can be bad not just for ethical reasons, but for financial reasons, is one that is increasingly embraced by businesspeople."
Here's a look at some of these opponents of the widening gap between the poor and, well, themselves.
BUFFETT: THE BILLIONAIRE PIED PIPER
The most visible of the superrich Robin Hoods is investor Warren Buffett, who has persuaded dozens of billionaires to give away large portions of their fortunes. Buffett, 83, is the second-richest American, according to Forbes magazine, with a net worth of $58.5 billion. He heads Berkshire Hathaway Inc., which owns everything from the insurance company GEICO and Dairy Queen to underwear maker Fruit of the Loom.
For years, he has advocated policies to close the wealth gap, saying reforms are necessary for the nation's continued prosperity. Buffett has famously complained that he pays a lower tax rate than some of his most menial-wage employees. That's because, like many moguls, much of his income comes from capital gains and dividend payments, which are taxed at a lower rate than ordinary wages. His activism gave rise to Obama's proposed "Buffet rule," which would ensure that anyone making more than $1 million per year pay at least the same rate as middle-income taxpayers.
The self-made Omaha, Neb., magnate has also for years targeted unequal wealth accumulation. Buffet advocated for a progressive estate tax before members of Congress, saying in 2007, "Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy."