Former Secretary of Labor Robert Reich claims that “great wealth amassed at the top” will cause us to lose democracy. To fight economic inequality, presidential candidate Sen. Elizabeth Warren (D–Mass.) is calling for a 2 percent annual tax on household net worth between $50 million and $1 billion and a 3 percent tax on net worth above $1 billion.
Language like that and proposals like Warren’s make increasing inequality sound like a crisis. But they misread the situation and misdiagnose the underlying problems.
On a global scale, inequality is declining. While it has increased within the United States, it has not grown nearly as much as people often claim. The American poor and middle class have been gaining ground, and the much-touted disappearance of the middle class has happened mainly because the ranks of the people above the middle class have swollen. And while substantially raising tax rates on higher-income people is often touted as a fix for inequality, it would probably hurt lower-income people as well as the wealthy. The same goes for a tax on wealth.
Most important: Not all income inequality is bad. Inequality emerges in more than one way, some of it justifiable, some of it not. Most of what is framed as a problem of inequality is better conceived as either a problem of poverty or a problem of unjustly acquired wealth.
MEASURING INEQUALITY
FIRST, THOUGH, LET’S look at how much inequality there is. The Congressional Budget Office (CBO) produced a report in November 2018 on the growth of household income in each of five quintiles. Between 1979 and 2015, average real income for people in the top fifth of the population rose by 101 percent, while it rose for people in the bottom quintile by “only” 32 percent. For the middle three quintiles, average real income increased by 32 percent as well.
Bu hikaye Reason magazine dergisinin February 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Reason magazine dergisinin February 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
Libertarianism From the Ground Up
ARGUMENTS FOR LIBERTARIANISM typically take two forms. Some libertarians base their creed on natural rights-the idea that each individual has an inborn right to self-ownership, or freedom from aggression, or whatever-and proceed to argue that only a libertarian political regime is compatible with those rights.
Lawlessness and Liberalism
THE UNITED STATES is notorious both for mass incarceration and for militarized police forces.
Politics Without Journalism
THE 2024 CAMPAIGN WAS A WATERSHED MOMENT FOR THE WAY WE PROCESS PUBLIC AFFAIRS.
EVERY BODY HATES PRICES
BUT THEY HELP US DECIDE BETWEEN BOURBON AND BACONATORS.
The Great American City Upon a Hill Is Always Under Construction
AMERICA'S UTOPIAN DREAMS LEAD TO URBAN EXPERIMENTATION.
Amanda Knox Tells Her Own Story
\"OUR CRIMINAL JUSTICE SYSTEM RELIES UPON OUR OWN IGNORANCE AND THE FACT THAT WE DON'T KNOW WHAT OUR RIGHTS ARE.\"
Trade Policy Amnesia
WHILE HE WAS interviewing for the job, President Joe Biden demonstrated an acute awareness of how tariffs work. It's worrisome that he seems to have forgotten that or, worse, chosen to ignore it-since he's been president.
Civil Liberties Lost Under COVID
WHEN JOE BIDEN was sworn in as president in January 2021, he had good reason to be optimistic about the trajectory of the COVID-19 pandemic.
Bye, Joe
AMERICA'S 46th president is headed out the door. After a single term marked by ambitious plans but modest follow-through, Joe Biden is wrapping up his time in office and somewhat reluctantly shuffling off into the sunset.
Q&A Mark Calabria
IF YOU HAVE a mortgage on your home, the odds are that it's backed by one of two congressionally chartered, government-sponsored enterprises (GSES), Fannie Mae and Freddie Mac.
