Tags: Rattner | income | inequality | tax

Steven Rattner: 'Prospect of Addressing Income Inequality Grows Dimmer'

By    |   Tuesday, 18 November 2014 01:41 PM

Despite the fact that many Republicans have expressed concern about growing income inequality, Steven Rattner, czar of the Obama administration's auto bailout, thinks the election results will make it more difficult to solve the problem.

"The Democrats' drubbing in the midterm elections was unfortunate on many levels, but particularly because the prospect of addressing income inequality grows dimmer, even as the problem worsens," Rattner, chairman of money manager Willett Advisors, writes in The New York Times.

He cites recent Federal Reserve data showing that while real earnings rose for the wealthiest 10 percent of Americans between 2010 and 2013, the rest of us suffered a decline.

Government has a large role to play in solving the inequality puzzle, Rattner says.

"Before the impact of tax and spending policies is taken into account, income inequality in the United States is no worse than in most developed countries, and is even a bit below levels in Britain and, by some measures, Germany," he explains.

"However, once the effect of government programs is included in the calculations, the United States emerges on top of the inequality heap."

Among policies the government should adopt is an increase in the minimum wage and an expansion of the earned income tax credit, Rattner says.

Meanwhile, many economists warn that the goal in fighting income inequality should be to help the poor, not hurt the rich.

"Unless one regards envy as a virtue, the primary reason for concern about inequality is that lower- and middle-income workers have too little, not that the rich have too much," Larry Summers, a top economic adviser to President Obama, writes in the Financial Times.

"So in judging policies relating to inequality, the criterion should be what their impact will be on the middle class and the poor."
 

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Despite the fact that many Republicans have expressed concern about growing income inequality, Steven Rattner, czar of the Obama administration's auto bailout, thinks the election results will make it more difficult to solve the problem.
Rattner, income, inequality, tax
298
2014-41-18
Tuesday, 18 November 2014 01:41 PM
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