We can debate, deliberate, and argue about the various positions, perspectives, ideas, and potential solutions to Income Inequality all day, every day… But what each of us can do that would have any actual impact is about zero.
Even drastic initiatives by the country’s largest corporations would actually do very little to tip the income inequality scale. What would happen if every fortune 1000 company CEO took a huge pay cut to bring their compensation packages in line with regular workers? Probably not much more that a blip on a chart.
When it comes to really making an impact on Income Inequality only our fearless leaders and representatives in Washington D.C. can make any profound difference.
If fact, even if somehow, we (along with those Fortune 1000 companies) discovered the “Magic Bullet” solution to Income inequality those folks in D.C. could undo all our potential good in an afternoon of passing bone-headed laws.
How do I know this? It’s all part of sad history over the last few years…
Example one of this would be the recent Income Tax overhaul which is sure to hurt many people in the middle-income range and crush non-profits since the tax incentives to donate have been greatly reduce. With more corporate profits dropping to the bottom line because of reduced corporate taxes those big Fortune 1000 players have more incentive than ever to cut costs. That means less jobs and less investment in their businesses and less growth fueling economic activity.
So this recent tax overhaul gets a “D-“ grade for Mr. Trump and probably is not a good thing for balancing income inequality since it pushes more cash to big corporations and away from middle-class workers and the Non-profits trying to level the playing field for those caught near the bottom rung of the income ladder.
But recently Joe Biden gave us a few hints on how he might attack income inequality… Let’s see what his “letter grade” might look like compared to Mr. Trump’s…
In a recent speech Mr. Biden proposed a number of solutions that have been floated by the Democratic party’s most progressive members, like offering free college to everyone and banning tactics used by employers to keep workers from being paid higher wages.
But he noticeably stopped short of pushing some of the more radical proposals from the party’s left flank. Instead, Mr. Biden offered more mainstream ideas, like providing more federal funding for infrastructure projects and making the tax code less friendly to investors while expanding tax credits for low-income families.
He stayed clear of ideas some of the party’s rising stars like Senators Kirsten Gillibrand of New York and Cory Booker of New Jersey, have floated. Like a variety of potential initiatives including: A universal basic income payment for all Americans, and a government-funded jobs program that would guarantee employment to everyone willing to work.
Biden went on to point out that, in his view, growing inequality is creating frustration and hopelessness that ultimately undermines American democracy. “This gap is yawning,” he said. “And it’s having the effect of pulling us apart. You see the politics of it. And the country’s not going to stand for it forever.”
A plan to make higher education free, Biden said, could increase the number of people in college to 9 million. He estimated the measure would cost $6 billion annually, which he said could be paid for by eliminating the “stepped-up basis loophole” that allows heirs to reduce the capital gains taxes they pay on inherited assets.
We all know that more education can boost an individual’s income and potentially reduce the income inequality gap. If it is the right career-oriented education employers demand.
An unintended positive consequence of this $6 Billion/Year higher-education program would be the systematic reduction, over time, of huge student debt going forward which should promote spending on big ticket items like homes and cars that could juice up the economy.
I would give Biden a “B” grade for his idea on promoting lower-cost or free higher education while avoiding universal basic income. He missed the “A” because he would do this on the backs of capital gains taxes on inheritance. Why should the results of someone’s lifetime work become property of the US Government? They paid taxes on their income for their entire life why not leave them alone when they die.
Bottom line… Trump is not doing a good job on this Income Inequality problem while Biden may have some good ideas. He just needs to find a way to pay for them.