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Sat Dec 16, 2017, 08:50 AM

The Final G.O.P. Tax Bill Is a Recipe for Even More Inequality

On Thursday, a group of leading inequality researchers, including Thomas Piketty and Emmanuel Saez, published the World Inequality Report, a panoramic study showing how, over the past thirty-seven years, the richest households in many countries have grabbed more and more of the economic pie. In a sad coincidence, the report came out on the same day that more details emerged about the final version of the G.O.P. tax bill, which Republican leaders are hoping to push through the House and the Senate next week. Although the bill is officially called the Tax Cuts and Jobs Act of 2017, it could more accurately be labelled the Augmenting-Inequality Act of 2017.

By now, the trends illustrated in the World Inequality Report are well known. It has been more than four years since Barack Obama, when he was President, called rising inequality “the defining challenge of our time.” Three years ago, the English translation of Piketty’s monograph “Capital in the Twenty-First Century” became a surprise best-seller. The new report by Piketty and his colleagues reiterates that “income inequality has increased in nearly all world regions in recent decades.” The document’s most valuable contribution, though, is the comparative data set it contains, which shows how the level of inequality and its rate of increase both vary widely around the globe.

The set shows, for instance, that, measuring by the share of income going to the top ten per cent of households, the United States is a good deal more unequal than Europe and China; less unequal than sub-Saharan Africa, the Middle East, India, and Brazil; and about even with Russia. “The fact that inequality levels are so different among countries, even when countries share similar levels of development, highlights the important roles that national policies and institutions play in shaping inequality,” the report says.

Which brings us back to the Republican tax bill. Tax policy isn’t the only factor that influences the level of inequality, but it is an important one. By redistributing money from richer households to poorer households, progressive tax systems can moderate the level of inequality in post-tax income. Taxes on capital, such as property taxes and corporate income taxes, affect the valuation of capital assets—housing, commercial property, publicly traded stocks, and shares in privately held companies—which, in turn, can have a big impact on trends in the inequality of income and wealth. Taxation levels also affect the pre-tax distribution of income, especially at the top. When taxes are low on high earners, such as C.E.O.s, those earners have more incentive to give themselves vast remuneration packages (with the aid of compliant boards of directors).


https://www.newyorker.com/news/our-columnists/the-final-gop-tax-bill-is-a-recipe-for-even-more-inequality

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Reply The Final G.O.P. Tax Bill Is a Recipe for Even More Inequality (Original post)
spanone Dec 2017 OP
2naSalit Dec 2017 #1
democratisphere Dec 2017 #2

Response to spanone (Original post)

Sat Dec 16, 2017, 08:52 AM

1. Well of course it is....nt

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Response to spanone (Original post)

Sat Dec 16, 2017, 08:56 AM

2. The wealthiest will now have it ALL.

Prepare for a depression.

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