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Sun Jan 20, 2013, 01:17 PM

Krugman: Obama and Redistribution [View all]

Obama and Redistribution

Some notes for myself: how much impact have Obamaís policies actually had on current and prospective inequality?

The main policies to consider are PPACA (the health reform) and ATRA (the fiscal cliff deal with its associated tax rise).

Iím not a fan of the Tax Foundationís work, but their analysis of the distributional effects of Obamacare looks about right: significant benefits to the bottom half of the income distribution, paid for largely by taxes on the top few percent (the Medicare surcharge and the extra tax on investment income). The Tax Policy Center ó whose work I do trust ó has the Act reducing the after-tax income of the top 1 percent by 1.8 percent, the top 0.1 percent by 2.5 percent.

Meanwhile, ATRA raises taxes relative to a continuation of the Bush high-end tax cuts: after-tax income down 4.5 percent for the 1-percenters, 6.2 percent for the top 0.1 percent.

Putting this together, we have a roughly 6 percent hit to the 1 percent, around 9 to the superelite. Thatís only a partial rollback of these groupsí huge gains since 1980, but itís not trivial.

http://krugman.blogs.nytimes.com/2013/01/20/obama-and-redistribution/



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