Paul L. Caron
Dean


Friday, September 13, 2019

Batchelder & Kamin: Taxing the Rich: Issues and Options

Lily L. Batchelder (NYU) & David Kamin (NYU), Taxing the Rich — Issues and Options:

The U.S. economy exhibits high inequality and low economic mobility across generations relative to other high-income countries.

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The U.S. will need to raise more revenues in order to reduce these disparities, finance much-needed new services and investments, and address the nation’s long-term fiscal needs. This paper outlines policy options for raising a large amount of revenues primarily from the most affluent, first discussing potential incremental reforms and then focusing on four main options for more structural reform: (1) dramatically increasing the top tax rates on labor and other ordinary income, (2) taxing the wealthy on accrued gains as they arise and at ordinary rates, (3) a wealth tax on high-net-worth individuals, and (4) a financial transactions tax.

Although we summarize the relative advantages and disadvantages of these approaches, we generally conclude that they all merit serious consideration. Several options are also complementary to one another. In practice, however, the relative strengths of each of these policies will depend to a large extent on how each is designed after it has made its way through the legislative and regulatory process.

https://taxprof.typepad.com/taxprof_blog/2019/09/batchelder-kamin-taxing-the-rich-issues-and-options.html

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Comments

"The U.S. will need to raise more revenues in order to reduce these (inequality) disparities, finance much-needed new services and investments, and address the nation’s long-term fiscal needs."

Translation: despite our trillion-dollar deficit, we don't have a spending problem; we have a revenue problem.

Posted by: Gerald Scorse | Sep 13, 2019 8:04:25 AM

The single largest aspect of hereditary inequality is education. Perhaps the wealthiest universities should consider addressing this issue rather than proposing taxes on everyone else.

Posted by: Mike Livingston | Sep 14, 2019 2:57:38 AM

"The single largest aspect of hereditary inequality is education."

Not for billionaires. Or people with hundreds of millions. Those folks are a lot richer than most people at the same education level, largely because of inherited wealth.

For education, you're talking about petty inequality between doctors and orderlies (i.e., 5X difference) rather than the major inequality between billionaires and doctors (1,000X difference).

Posted by: inequality | Sep 16, 2019 2:21:31 PM

"The single largest aspect of hereditary inequality is education. " Agreed, but I suspect for most people at risk, it's way too late to address it at the university level. We have cohorts of kids who don't appreciate the "free" education they can currently receive in K-12 and do nothing but cause trouble for those that do. Addressing "children" who have gone feral would do more to improve public education than anything else.

Posted by: ruralcounsel | Sep 17, 2019 3:55:06 AM