Friday, December 13, 2013
Income Inequality Forever
I am disappointed that the new budget deal did nothing about income taxes. The budget deal a year ago carried over most of the Bush tax cuts. One group said that it carried over 82% of the tax cuts. These low taxes guarantee that income inequality will continue indefinitely. While some rates went up a little a year ago, income taxes are still extremely low by historical standards. That is certainly a major contributor income inequality. There are a lot of other factors, including outsourcing and the displacement of human workers by computers, but the easiest way to rectify income inequality would be by implementing a more progressive tax structure which would tax higher incomes at a higher rate. This would not affect many of the underlying issues favoring capital over labor in the financial market, as described in the book Race Against the Machine, but it would ameliorate the rate of destruction of the middle and lower classes in the US, ideally giving us time to address the more fundamental structural issues.