President Obama once called inequality “the defining issue of our time.” How right he was. The question now is not whether we have a big problem; the question is what to do about it.
Progressives naturally gravitate to the idea of redistributing income. They often take the market distribution of income as a given. Why not simply raise taxes on the wealthy and use the proceeds to beef up spending on programs that help the middle class and the poor?
First off, let me make it very clear that I am in favor of such redistribution. But we liberals may need to start better recognizing the difficulty of achieving such redistribution in practice, and in light of those difficulties, consider other ways of reducing inequality that focus more on market incomes and less on tax and benefit programs.
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