Tags: Frankel | wealthy | income inequality

Harvard's Frankel: Demonizing the Wealthy Won't Curb Income Inequality

By    |   Thursday, 24 April 2014 11:27 AM

Some people have turned their opposition to income inequality into an opposition to the wealthy. That's not healthy, says Harvard economist Jeff Frankel.

"Pursuing the anti-oligarchy argument is not the best way to reduce inequality," he writes in an article for Project Syndicate. "Rather, we should work from the premise that poverty in particular, and inequality in general, is simply undesirable."

Most Americans care about the issue of income inequality, Frankel asserts.

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"Even among the top 1 percent, approximately two-thirds believe that income differences are too large and support progressive taxation," he argues.

Americans want to help the poor, "provided that it can be accomplished without undermining economic efficiency through excessive government intervention or distortion of incentives," Frankel writes.

So what's the best way to help low-income Americans?

Frankel recommends an expansion of the Earned Income Tax Credit, elimination of payroll taxes for low-income workers, a reduction in tax deductions for the wealthy and restoration of higher inheritance taxes.

"These are policies that reduce inequality efficiently, at relatively low cost to aggregate income," Frankel notes. "Other policies, including universal pre-school education and universal health care, may even promote overall economic growth while reducing inequality."

The rise in income inequality isn't just hurting the poor, it also has put a dent in the middle class.

Indeed, the U.S. middle class is no longer the richest in the world, a title it held for years, The New York Times reports. Canada's middle class almost certainly has surpassed ours.

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Some people have turned their opposition to income inequality into an opposition to the wealthy. That's not healthy, says Harvard economist Jeff Frankel.
Frankel, wealthy, income inequality
271
2014-27-24
Thursday, 24 April 2014 11:27 AM
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