Last week, Gallup released a poll that says 67 percent of Americans are dissatisfied with income and wealth distribution. 39 percent of those surveyed identify as “very dissatisfied.”
Regardless of one’s political affiliation, something is very, very wrong here.
Any reasonable person would say that there is a certain point in which wealth becomes too concentrated toward the top of the economic ladder and not only is it morally wrong, but it’s also bad economics.
This point has certainly been reached, and if the fact that income inequality has reached its highest point since 1927 is no measure of this, it is hard to say what is. That is why it is necessary to have some form of a fairer, more level playing field in this country and therein lies the problem.
The downside to being the world’s largest economy and having a strong national belief that hard work and perseverance result in financial success is that even the mention of “wealth distribution” is often highly simplified or distorted.
Any change to the status quo is seen as redistribution and socialistic in nature. There seems something distinctly un-American associated with this, but such a change in the status quo is exactly what needs to happen if the United States wishes to continue leading the world economy and living up to its promise of social mobility.
There needs to be less fear associated with such discussions – especially considering the contrast. The prevailing logic in the United States for decades now has been that the free market system is the model for how society should operate. In fact, this idea was practically the entire campaign premise for the 2012 Republican presidential candidate.
Characteristic of the Republican Party, this type of thinking is purely ideological, not concerned with policy results and is responsible for the gross income inequality persistent in this country today.
While a capitalist model is an essential part of the recipe for America’s success and generating wealth for people of all income levels, it is a pretty lousy prescription for solving societal challenges like education, environmental regulation and health care.
With regard to such moderation between these ideas, in December, journalist and author David Simon wrote in The Guardian: “Labour doesn’t get to win all its arguments, capital doesn’t get to. But it’s in the tension, it’s in the actual fight between the two, that capitalism actually becomes functional, that it becomes something that every stratum in society has a stake in, that they all share.”
Is the solution to revive the top marginal tax rates of 70 percent that presided over the booming post-war economy? Certainly not. A massive expansion of the welfare state isn’t really the solution either. While limiting tax loopholes that benefit the wealthy and more regulation of the financial system needs to happen, the solution lies not so much in curbing incomes of the wealthy, but in instituting policy that benefits the poor and middle class.
Perhaps the best example is the former Republican proposal now known as the Affordable Care Act, which reduces premiums that constitute a greater proportion of income for the lower classes than the wealthy while curbing rising costs of insurance.
Talks of raising the minimum wage and tying it to inflation also show signs of progress for reducing income inequality, especially as some notable Republicans are also on board. Such a wage increase often translates to more money for many who work on an hourly wage.
In fact, these are rather conservative proposals – if premiums are reduced and preventative care is prioritized, health-related expenditures decrease. Similarly, if people are paid better wages, the government will subsequently spend less money on food stamps, welfare and incarceration.
Luckily, Paul Krugman is no longer the only mainstream public voice making a prescription for greater economic equality. Recently, public officials like Massachusetts Senator Elizabeth Warren and New York City Mayor Bill de Blasio have made this their central cause in seeking office. And in some way, greater emphasis on creating more economic equality will become a political reality.
Democrats and Republicans alike need not shy away from such an argument. In fact, in this era of political polarization, such ideas embrace both philosophies and offer common ground. This is the best route for political discourse in the imminent future.
Online Editor Ross Fogg is a College senior from Fayetteville, Ga.
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