Income inequality the United States is an incredibly important issue with a multitude of ramifications. Firstly, it brings into question the idea of the tradeoff between economic efficiency and economic security. In this country we have a belief system that values economic liberty (efficiency) over security. This can be seen as one of the main reasons why the gap has become so large and pervasive. An example of a contrasting belief system is that of Scandinavian countries. While they have around the same level of income as the United States, their income distribution is much more equitable than ours.
This brings into question why these systems are so different. For one, tax rates in Scandinavian countries are much more progressive. They also have far more robust social security programs than our country. It is interesting to note, however, that this system might not work in the United States. For example, it has been shown that the more homogenous the population the easier it is to implement social security programs. This is because it is easier for people to empathize with people that are similar to themselves. The reason why this is important is because while all countries are outsourcing work to cheaper providers, in these countries the effect is blunted due to their stronger safety nets. While it is not certain whether or not this model is sustainable, (as evidenced by the euro zone debt crisis) or desirable, it can be seen as an effective way of lowering income inequality in the United States.