Monday :: Apr 23, 2012

Inequality in America

by Mary

The New York Times had a very good piece on two economists that have been drawing a sharp focus on the level of income inequality in the United States.

[Piketty and Saez] admire, even adore, the United States, they say, for its entrepreneurial drive, innovative spirit and, not least, its academic excellence....But both also express bewilderment over the current conversation about whether the wealthy, who have taken most of America’s income gains over the last 30 years, should be paying higher taxes.

“The United States is getting accustomed to a completely crazy level of inequality,” Mr. Piketty said, with a degree of wonder. “People say that reducing inequality is radical. I think that tolerating the level of inequality the United States tolerates is radical.”

What they have found by tracing US incomes and taxes back to 1913 is that income inequality in the US is as high as it was before the Great Depression (see chart).

And they recommend that taxes on the top 1% (and even more so on the top 0.1%) be raised even more than would be done with enacting the Buffett Rule.

Mary :: 5:34 PM :: Comments (0) :: Digg It!