Inequality matters — but not in the way you think

In recent weeks a hotly contested debate was reignited among academics and policy wonks over income inequality and tax progressivity. The issues have been discussed frequently in the news for much of the Democratic primary season. But the current academic debate has been reignited by economists Emmanuel Saez and Gabriel Zucman, who recently released a book and related website arguing for their version of justice in tax policy. In the political sphere, their work has inspired a few aspects of the platforms of candidates Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.). 

Their arguments have been vigorously debated. To put it lightly, the issue of which income group pays more taxes is not easy to discern. A recent primer from the Joint Economic Committee summarizes the debate, concluding, “The question of who is right in these debates hinges on a variety of technical measurement questions and assumptions and the quality of various data sources. The debates have become inaccessible to even many observers with considerable economic training.”

While these debates are certain to continue, especially as the 2020 presidential campaign heats up, the hyper-focus on the wealthy (and how much they should pay in taxes) may be misplaced. For most Americans, inequality matters because people want to see the disadvantaged flourish, not because they want to tear down the rich. Some might be convinced of the falsehood that if someone has more wealth it follows that others necessarily have less. But most people who care about inequality care about the poor, and when they see the inequality gap growing, they’re worried that the poor are being left behind.

That concern is well-justified. There are very real and unjust barriers that prevent the poor from being able to move up the income ladder — barriers that those in the middle and upper classes can indeed overcome more easily. But instead of pretending that our problems will disappear if economists can manage to turn the tax dials just right, our focus should be on eliminating the unjust barriers that hold the poor back the most.

Continue reading at The Hill.