Most U.S. hedge funds aren't expecting another big stock market sell-off as more firms curb bets on volatility, according to Nomura.Marketsread more
More tit-for-tat tariffs in the U.S.-China trade war could set the global economy up for a recession, according to Morgan Stanley.Marketsread more
A sell-off in chip stocks intensified following a report that chipmakers are cutting ties with Huawei after the Trump administration's ban.Marketsread more
A series of tweets Monday marked the latest chapter in Trump's decadeslong effort to refute published reports that his previous financial problems have rendered him an...Politicsread more
President Trump stands a chance of creating a new economic world order in his China trade fight, says the chief economic advisor of Allianz.Economyread more
Sens. Mitch McConnell and Tim Kaine plan to introduce a bill Monday that would raise the minimum age to buy tobacco to 21 in hopes of curbing what regulators are calling an...Health and Scienceread more
Ford Motor said Monday that it is laying off about 7,000 salaried workers, about 10% of that global workforce, as part of a restructuring plan designed to save the No. 2...Autosread more
Silicon Valley argues that the public market investors focus too much on near-term profits — but investors have embraced money-losing biotech IPOs.Marketsread more
Despite high criticism from fans, the final episode of "Game of Thrones" shattered single-night viewing records Sunday, with 19.3 million tuning in to watch the finale.Entertainmentread more
Restaurants are thinking outside the box to attract and retain talent. A report from TDn2K, a restaurant analytics firm, finds that employee vacancies are a major concern for...Restaurantsread more
Forty percent of customers will choose a center to shop at based solely on the food that's there, JLL found in a new study. And nearly 38% of people want healthy options when...Retailread more
In his State of the Union Address on Tuesday night, President Barack Obama is expected to take sharp aim at wealth inequality.
He'll propose a hike in the minimum wage, extended unemployment benefits, and more funding for education and skills improvement.
He is also likely to contribute to several persistent myths about the increasing gap between the rich and everyone else.
There is no question that income inequality in America is high compared with other countries as well as with the three decades in the U.S. after World War II. And a consensus is growing among business leaders, politicians and even conservatives that more must be done to help those at the bottom better adapt to a more global, technology-driven world.
(Read more: The overreaction of the 1 percent)
But as the country wrestles with one of the most fundamental issues of our time, three key myths beg to be corrected.
MYTH 1—Inequality is rising to the highest levels ever. The most common argument used is that the top 1 percent is taking more of the national income pie than ever before. In fact, the group's share of income (including their capital gains) is lower than it was in 2007, when it hit 23.5 percent. In 2012, the most recent period measured, it was 22.46 percent.
The share of income going to the top is also less than 1 percent above where it was in 2000 (21.52 percent). The years 2000 and 2007 were good economically, but few people were complaining about inequality then because overall employment was higher.
That doesn't mean this level of income inequality is low or acceptable—over the past three decades, the share of income going to the top 1 percent has more than tripled. But that it's at levels similar to those in 2000 and 2007 means that the attention given is not consistent with the actual income gap.
(Read more: Work hard, get rich—Americans don't buy it)
MYTH 2—Helping the poor will solve inequality. There are plenty of reasons to provide more help to America's poor and marginalized, underemployed, undereducated or underpaid. But even if all the president's efforts are successful, they won't substantially change inequality as measured by income or wealth statistics.
Statistical inequality has been driven almost entirely by the soaring fortunes of a small number of winners at the top of the economy, rather than by the declining fortunes of those at the bottom. According to the Congressional Budget Office, real after-tax incomes for the bottom 20 percent grew 49 percent between 1979 and 2010, while incomes for the top 1 percent grew by 201 percent over the same period.
Further, the growth at the top actually was driven by the top .01 percent, which saw their average annual income grow more than six times, to $17.1 million from $2.7 million. More importantly, the vast majority of that increase was driven by stock market gains—and most were one-time events such as a stock sale or grant. That leads to our third myth.
MYTH 3—The rich are a permanent club choking off opportunity for the rest. Of those who made $1 million or more, half were millionaire earners for only one year between 1999 and 2007. Only 6 percent were millionaire earners for the whole period.
(Read more: Op-ed: Rich vs. poor: Wage stagnation is a myth)
Among the top 400 earners in America, 73 percent made the 400 list for only one year between 1992 and 2009. Only 15 percent made it more than two years.
As the IRS said in a June 2012 analysis of the dynamics of high earners, "The data reveal a mostly changing group of taxpayers over time."
(Read more: Born here? You already struck it rich)
One of the most comprehensive studies on upward mobility—the odds of moving up or down the income ladder—shows that mobility hasn't appreciably changed over the past 20 years even as inequality grew and fluctuated.
The study, by Raj Chetty, points out that mobility in the U.S. is still a fundamental problem. But mobility has not gotten worse among children in the middle fifth of the income scale—about 20 percent reached the top fifth.
So yes, the president and Congress should do more to improve inequality of opportunity in the U.S. But inequality of incomes and wealth are unlikely to drop unless there's a major stock market crash. And that won't make anyone richer.
—By CNBC's Robert Frank. Follow him on Twitter .