Inequality: What Can Be Done?
by Anthony B. Atkinson, Harvard University Press
WHAT IT’S ABOUT
(Harvard University Press)If a government is serious about addressing economic inequality, says Atkinson, there are a lot of things it can do. Past periods of relative equality in the United Kingdom and other developed countries were shaped by tax and transfer policy and public-investment decisions—and those tools could be used successfully again if the political will were there. Atkinson, a British economist, lays out 15 proposals for moving the distribution of wealth back toward what it was in the more economically equitable 1950s and 1960s. (He focuses on the United Kingdom, but his ideas could be applied in the United States as well.) He admits up front that many of his suggestions are radical: They include raising the top tax rate to 65 percent (the top marginal tax rate on earned income in the United States averaged 75 percent from 1950 to 1979; it’s now about 40 percent) and providing a sum of money (what he calls a “minimum inheritance”) to all citizens when they reach adulthood.
TARGET D.C. AUDIENCE
Tax-policy wonks; economists; think tanks; fans of Thomas Piketty and Bernie Sanders; English majors (they’ll get a kick out of Atkinson’s literary references).
“Competitive equality of opportunity means only that we all have an equal chance to take part in a race “¦ where there are unequal prizes.”
TO BE SURE
Atkinson starts with the premise that inequality is bad for society, and he goes to some lengths to explain why he thinks so. But there are economists who disagree and who would argue that the heavy-handed policies Atkinson describes would be financially unsustainable and would hurt the economy in the long run.
ONE LEVEL DEEPER
Liberal policy wonks will want to turn directly to Part 2, where Atkinson lays out his proposals in detail. Their conservative counterparts may want to do the same, for a bit of opposition research at the idea level. See: Atkinson’s notion of a global body for taxing the rich, no matter where they live or keep their wealth.
THE BIG TAKEAWAY
Although technological change and globalization are often blamed for rising inequality, government policy and social norms—such as CEO pay scales—also strongly influence the distribution of wealth.