Why Do Progressives Oppose Evidence-Based Solutions to Income Inequality?

Perhaps the trendiest issue among modern progressives is the supposed problem of “income inequality”. In ominous tones, we’re told that the gap between the rich and the poor is growing, and that the top 1% of income earners are getting richer while the poor grow poorer.

It’s easy to see how such a narrative might gain traction. Most people – regardless of political orientation – recognize the depravity and excesses that often accompany extreme wealth. The injustice is especially clear when juxtaposed with the millions who die every year from thirst, malnutrition, and preventable diseases.

inequality

On the surface, it might seem that these injustices can be addressed by focusing on “income inequality” – the relative gap between the rich and the poor.

Consider, though, the following thought experiment (from Steve Horwitz):

“Want to have some fun with your leftist friends who are complaining about supposed growing income inequality? Ask them if they’d prefer the status quo or a world in which everyone’s real income got doubled. The latter, of course, would have much more inequality. If they prefer the latter, then they really aren’t so concerned about inequality, but something else. And that’s a different conversation. If they prefer the former, then at least you know where they stand: they prefer equality so much that they are willing to condemn all of us, including the poor, to worse lives to achieve it.”

This isn’t a new idea, of course:

For the sake of argument, though, let’s imagine that our goal is to reduce income inequality. Where should we begin? What policy initiatives should be put in place?

As it turns out, there are a couple of clear, evidence-based solutions to income inequality. Ironically, these proposals are widely rejected and/or ignored by progressives – the very people who claim to care most about this issue.

Solution 1: Reduce income taxes and enact right-to-work laws.

According to economists Stephen Moore and Richard Vedder, “the income gap between rich and poor tends to be wider in blue states than in red states. Our state-by-state analysis finds that the more liberal states whose policies are supposed to promote fairness have a bigger gap between higher and lower incomes than do states that have more conservative, pro-growth policies…The two of us have spent more than 25 years examining why some states grow much faster than others. The conclusion is nearly inescapable that liberal policy prescriptions—especially high income-tax rates and the lack of a right-to-work law—make states less prosperous because they chase away workers, businesses and capital.”

Solution 2: Embrace pro-family social policies (and start by repealing no-fault divorce laws).

As explained by economist Mark Perry, it’s actually household inequality – not individual inequality – that has been increasing over the last several decades. “The combination of a flat Gini coefficient index for individual income inequality for more than 50 years along with rising Gini coefficients for US households and families means that social, rather than economic factors, are responsible for the most frequently reported rise in income inequality for households and families.”

This has been driven primarily by an increasing number of single-parent families and single-person households. Yet this crucial distinction goes largely unrecognized:

“[In] the current discussions about increased inequality, few researchers, fewer reporters, and no one in the executive branch of government directly addresses what seems to be the strongest statistical correlate of inequality in the United States: the rise of single-parent families during the past half century.”

Following the second-wave feminist movement of the 1960’s and 1970’s, many states enacted no-fault divorce laws – allowing either spouse to unilaterally obtain a divorce without penalty, and without having to demonstrate infidelity or wrongdoing.

divorce rate

As a result, marriage is perhaps the only legal contract that can be violated by one party, without that party facing any kind of penalty. As an added perversity, the party that walks away from the marriage (breaking the contract) is often granted financial rewards and/or child custody.

These laws have resulted in higher rates of divorce, which not only harms children, but also directly contributes to income inequality. Yet no-fault divorce laws are staunchly defended by mainstream progressives.

Advertisements

6 thoughts on “Why Do Progressives Oppose Evidence-Based Solutions to Income Inequality?

  1. You’re missing a couple that are even more critical. First, investing in education. Second, investing in infrastructure. Those aren’t free, and run counter to tax-cutting. Conversely, higher-tax countries with high levels of public sector services and high per-capita incomes also tend to have lower income inequality than us. They also tend to have better schools, health care and infrastructure than us.

    • >education

      The US outspends the next 10 countries when it comes to education and yet more and more kids are graduating high school functionally illiterate. The money’s not the problem, it’s lazy teachers and irresponsible parents.

      >runs counter to tax cuts

      Nonsense. Lowering income taxes raises revenue to the gov’t (Laffer curve).

      >high-tax countries

      Countries with high rates of taxation are just about retrogressing economically.

      >lower income inequality

      Irrelevant. The economy isnt a fixed pie with slices that need to be divied up–wealth is created. If you dont believe me, tell me where your phone was 25 years ago.

      >schools

      See above.

      >healthcare

      Depends on your definition of “better.” Personally, I define it to mean “superior care and outcomes,” which the US has, but if on-paper equity is what matters to you, then that’s fine.

      >infrastructure

      Most high-tax countries are smaller than the average US state, which is also the level where infrastructure is handled. Lack of money is almost never the issue, but rather cronyism, mis-management, graft and poor prioritization.

    • Well, the CBO figures would disagree on your trickle-down thoughts. Evidence shows that middle and lower-class incomes have seen slight or flat growth since 1979. Upper incomes have exploded in that same timeframe.

      Growing income gaps have shown to be a cause of internal instability in many countries. It’s not a small problem.

      And in terms of education, are we spending 10 times as many in total dollars, or per capita? If it’s not the latter, then you’re talking about an entirely different ballgame that does not really factor into the issue.

      And no, our health outcomes are not that good, at least not compared to other wealthy nations. We’re ranked in the 70s worldwide.

      And finally, lowering income taxes does not create revenue growth. When we cut takes in 2001, it helped balloon federal deficits. With a slight increase in 2010, as well as some spending cuts, deficits are shrinking.

      These aren’t theories. These are real, documented outcomes.

    • I specifically said income to the federal government, which almost doubled throughout the 80’s as the top tax rate was lowered from 70% to 28%. High rates of taxation disincentivize growth and investment by “penalizing” it. This concept is called the “Laffer Curve.”

      “Growing income gaps have shown to be a cause of internal instability in many countries. It’s not a small problem.”

      Care to elaborate? What kind of “internal instability” and where, and what’s your solution?

      The US spends more per child and far, far more overall on education (with both of those numbers ballooning year by year). There’s an inverse correlation between spending and outcomes in the US. The school system is messed up. Throwing more money at the issue isn’t going to solve it, it’s going to make it worse.

      US healthcare care outcomes “at the point of intervention,” beat out every other country (which is a highly relevant statistic when it comes to deciding the quality of a country’s healthcare system–of which the US has four). By what metric is the US ranked in the “70s”? Overall rating, percentage, fashion sense? The World Health Organization ranks the US low because of our nominal rejection of “accessibility” and “equity.”

      I don’t think you understand economics. The Federal government doesn’t just “catch” income deficits like a cold, they have to spend more money than they take in. Since 2001, they’ve been doing just that. Whether they’re making ten dollars a year or ten trillion, if they spend a penny over their income, there will be a deficit.

      Congress often uses any additional source of income as an excuse to spend like there’s no tomorrow, so only in effect can tax rate cuts, leading to more income to the federal government, be said to increase the deficit. You’ll notice there is no direct causal chain between revenue and spending.

      While the outcomes you mention are certainly real, you seem terribly confused on the causes that lead to them.

    • I kinda doubt I’m confused. These aren’t things made up out of thin air. But it’s cool. BTW, those deficits you’re talking about have been ballooning since 1981. Not 2001. Jumping off the Tea Party Express now…

    • Your doubt is poorly founded. As I said, some of the things you mention are true, but you’ve misapprehended what leads to them. If you take a peek at your history book, you’ll notice there was a war on during the 80s and another that started in 01; wars aren’t exactly cheap. The deficit was also eliminated through FY98-01 thanks to a Republican congress and Clinton’s sound politicking.

Comments are closed.