20080208 spending 1605090 18
A customer prepares to spend her money. - 

TEXT OF STORY

Kai Ryssdal: Income inequality in this country, the wealth gap between rich and poor, has been growing for decades. A report out today from Brandeis University shows the disparity between whites and blacks, at nearly all levels of income distribution, has become dramatically larger over the past 25 years.

Our Washington bureau chief John Dimsdale reports.


John Dimsdale: The study's author, Brandeis University's Tom Shapiro, says them that's got, shall get.

Tom Shapiro: The lion's share of the growth in the wealth pie for American families has gone to the highest income whites in this particular sample.

One reason for a fourfold increase in the wealth gap, he says, is tax policy. Assets are taxed less than earned income. He points to millions of dollars in exclusions from estate taxes as an example. Another reason: Well-to-do African American families are under more pressure to help their less well-off kinfolk.

Shapiro: Largely, the generality here is that among high income whites, their family also tends to be high income. Nephews and nieces and brothers and cousins don't ask them for as much help as the African American community.

And finally, Shapiro points to lenders who charge poor people more for loans -- subprime and pay-day loans and check cashing stores. He's hoping congressional regulatory reforms will make credit more affordable for poor people.

But New York University economics professor Edward Wolff does his own survey of the racial wealth gap, using data from the Federal Reserve.

Edward Wolff: My conclusion is that the racial wealth gap has not changed. It hasn't improved, which is too bad, but it hasn't changed in any case.

Wolff attributes the discrepancy to different data. He says the Federal Reserve's is better. But he agrees that tax rates and credit regulations are to blame for the lack of improvement in the racial wealth gap.

In Washington, I'm John Dimsdale for Marketplace.