Paul L. Caron

Thursday, January 16, 2020

Should The Tax System Be Used To Reduce Wealth Inequality In The United States?

Tax Policy Center, Should the Tax System Be Used to Reduce Wealth Inequality in the United States?:

Tax Polcy Center Logo (2017)Wealth is highly concentrated in the United States, with the top 0.1 percent of households holding an estimated 10 to 20 percent of all assets. Concerns about the effects of wealth inequality have spurred some presidential hopefuls to propose new taxes on wealth and unrealized capital gains and increases to the existing estate tax.

This policy debate raises broader issues about wealth inequality and how the tax code could reduce it. The causes, impacts on different groups, and effects of substantial wealth inequality are complex. Would higher taxes on the wealthy help fix the problems caused by wealth inequality?

Jason Furman, former chairman of the Council of Economic Advisers in the Obama administration, and panels of experts will consider the following questions:

  • What has been the impact of wealth inequality on different groups in the United States?
  • How does wealth concentration affect politics and public policy?
  • Would reducing after-tax wealth affect the political power of the wealthy and social and economic divisions across groups?
  • What are the pros and cons of using the tax system, instead of other government interventions, to reduce wealth inequality?

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It's called the estate tax, which we already have. Not effective enough? Rewrite the statute, then.

In the meantime, individuals can increase their own household wealth by merely reducing their own expenses, cost of living, etc. When it's reported that 80% of Americans live "paycheck to paycheck", a large chunk of whom are wealthier than I, in the middle class, am, I know that government policy is neither the preferred nor only solution to this problem, if it indeed is a problem.

Posted by: MM | Jan 16, 2020 1:21:29 PM

What better way to discredit taxation systems than to employ them for ideological "tweaks" to society and human nature, rather than merely to provide adequate funding for necessary government services.

Posted by: ruralcounsel | Jan 17, 2020 3:25:12 AM