Divided We Stand: Why Inequality Keeps Rising

More

Yesterday the OECD published a big new study of the causes of inequality: Divided We Stand. Readers without accreditation of some kind may have to pay for it, but you can download a good overview for free.

The study looks especially valuable because it emphasizes international comparisons and makes careful distinctions between different kinds of inequality (for instance, in earnings, in incomes, in incomes after taxes, in incomes after taxes plus cash transfers, in incomes after taxes plus cash transfers and in-kind benefits...). Despite the current preoccupation with inequality, these essential aspects of the issue rarely get much attention.

The full document will demand careful reading. Skimming through, which is all I've had time for so far, one thing struck me. Inequality of market incomes is high in the US, on the standard measure, but not exceptionally so. (It's about as high in Britain, for instance, and a bit higher in Italy.) And the effect of the US tax system on the distribution of income is not that different from its foreign counterparts: the US income tax is moderately equalizing (in the middle of the decade, more so than Britain's, and about the same as Canada's and Sweden's); moreover the US, unlike most other countries, does not have a regressive VAT as part of the mix.

The US is an outlier not in either of those respects but in social transfers: these are far smaller, and have a far smaller redistributive effect, than in other rich countries.

American progressives are strangely quiet on this issue, don't you think? Their long preoccupation and lately all-consuming obsession with inequality expresses itself almost entirely as zeal to raise taxes on the rich. In that regard, as I say, the US is not much out of line by international standards--and higher taxes on the rich anyway do nothing to relieve poverty, where the US really is out of line.

Why so little agitation on the American left for more generous transfers to the poor?  

Jump to comments
Presented by
Get Today's Top Stories in Your Inbox (preview)

CrossFit Versus Yoga: Choose a Side

How a workout becomes a social identity


Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

CrossFit Versus Yoga: Choose a Side

How a workout becomes a social identity

Video

Is Technology Making Us Better Storytellers?

The minds behind House of Cards and The Moth weigh in.

Video

A Short Film That Skewers Hollywood

A studio executive concocts an animated blockbuster. Who cares about the story?

Video

In Online Dating, Everyone's a Little Bit Racist

The co-founder of OKCupid shares findings from his analysis of millions of users' data.

Video

What Is a Sandwich?

We're overthinking sandwiches, so you don't have to.

Video

Let's Talk About Not Smoking

Why does smoking maintain its allure? James Hamblin seeks the wisdom of a cool person.

Writers

Up
Down

More in Politics

Just In