I agree Henry Aaron. We can reduce income inequality by taxing the rich and transferring the proceeds to the poor. Or, as he puts it:
Tax policy significantly reduces inequality. But transfer payments and other spending reduce it far more. In combination, taxes and public spending materially offset the inequality generated by market income.
However, as the late great Yogi Berra said it so memorably, in theory there’s no difference between theory and practice. In practice there is.
The question is not whether income inequality can theoretically be reduced by taxation. The question is whether the taxation that is likely to be enacted and the ways in which the proceeds are spent will have that effect and to do that both political parties would need to abandon the policies that have guided them for the last 30 years.
Republicans would have to stop opposing every tax increase and Democrats would have to stop spending money on services provided to the poor and actually give the proceeds to the poor. Neither will happen so we can’t reduce income inequality by taxing the rich.
Tax increases in Chicago are certainly solving it’s fiscal problems……..not.
Maybe a yacht tax………
Everything is mainly driven by ideology rather than “real” fairness and common sense. Basically, if there are no political gains to be made by a party any legislation or idea on the table is DOA, no matter how sound or potentially effective it might be.
No matter how partisan it may sound, I see the dems as being the more ideologically driven of the two parties. The mere fact that after 7 years of WH domination, with 2 of those years being completely in control of policy-making, they continue to throw the blame on the backs of the opposition party, rather than pulling up their pants and admitting their own failures.
You know, for once I might agree with you Jan. The GOP does things that make no sense to me since they don’t seem to fit their “ideology”. They pass huge spending bills and don’t fund them. They claim to value liberty, then pass intrusive security bills that ignore civil rights. They claim to be concerned about our debt, then do nothing to address our single largest source of future debt, health care. Etc. , etc. I can only conclude it is mostly about staying in power. Or opposing liberals. Or something.
Steve
If you want to get a real scare for halloween, here is a post by Jeffrey P. Snider. It is re-posted at David Stockman’s site with the original link at the bottom. (The original article is titled Partly.)
Banally Hopeful——The Fed’s ‘Partly’ Corner Gets Smaller And More Suffocating Every Meeting
If you think what you are being told is correct, take your blue pill, and all will be well. If a robust economy that will collapse under a 0.25% interest rate increase seems insane, take the red pill, and watch the madness increase.
The two link are good, but the quickly devolve into a link cascade. (Anything at alhambrapartners or realclearmarkets should be by him.) The circular reasoning is due to the usage of the medieval scientific method or consensus. They refuse to point the telescope at the sky, and they never acknowledge the objective evidence that would destroy their beautiful theories.
I would suggest taking the blue pill, and you can be comforted knowing that Nobel Prize winning economist Paul Krugman is hard at work on the problem. His solution for an alien attack should not cause anybody to worry their pretty little heads.
In other news, I have picked up a new phrase from David Stockman. It is, “Wall Street’s financial meth labs”. If I can remember, I will be overusing the hell out of it, but I will also add a full meth theme where possible. This should be fun.
He believes there should be a super Glass-Steagall, and I cannot argue with President Reagan’s OMB Director and Wall Street insider, unless I am supposed to distrust Saint Reagan.
He thinks, as I do, that Dodd-Frank is crony capitalism for the financial sector, and it does nothing to stop a repeat of the next financial collapse.