Taxing Inequality

Dec 22, 2011

Income inequality stands to be the biggest issue - not just of the next election cycle - but of the next decade. Why? Well, the rich just keep getting richer - a new study released by Connecticut Voices for Children shows that over a four year period, the highest wage earners in the state have seen their income sharply increase - even through a recession - while middle-class workers struggle by, making about the same.

Nationally - the debate has played out in the halls of congress where many  Republican lawmakers have taken pledges to oppose raising any taxes on the rich - calling the top 1% the “job creators” that America needs.

The debate has also played out on the streets since September - as the Occupy movement looks to represent the 99% that hasn’t had a chance to take part in this economic boom.

But from a standpoint of both politics and fairness, any call to simply “tax the rich” faces a big uphill battle.

Here’s a thought, though - what if there was a plan to tax the inequality that’s gotten much worse in the country since 1980, instead of just focusing on taxing the wealth. What if tax policy was seen as an incentive for the “job creators” to make sure all boats lift with their rising tide?

Our guest is Ian Ayres - a Yale law professor and economist - who along with Berkeley’s Aaron Edlin - has a new plan that he outlined in the New York Times.