# How can economic inequality in the United States be reduced? **URL:** \ **Category:** Great Debates\ **Created:** [January 2, 2013, 2:19am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792 "2013-01-02T02:19:15Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [January 2, 2013, 2:19am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/1 "2013-01-02T02:19:15Z")
N.B.: I’m asking “How?” Please do not hijack this into “Why?” For purposes of this thread, at least, we will simply assume that high [income inequality in the United States](http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States) is a Bad Thing and that Something Should Be Done. What would work? ---
**Author:** ![DrCube](https://avatars.discourse-cdn.com/v4/letter/d/a3d4f5/32.png) [@DrCube](https://boards.straightdope.com/u/DrCube)\ **Post date:** [January 2, 2013, 2:28am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/2 "2013-01-02T02:28:10Z")
Cash payments to the poor. Lets say some percentage of the shortfall between their income and the poverty line. A dead band between the poverty line and some higher middle class income, and above that, some percentage of their income is taxed. Pretty simple really. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [January 2, 2013, 3:06am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/3 "2013-01-02T03:06:27Z")
> [@BrainGlutton](#): > > N.B.: I’m asking “How?” Please do not hijack this into “Why?” For purposes of this thread, at least, we will simply assume that high [income inequality in the United States](http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States) is a Bad Thing and that Something Should Be Done. What would work? You aren’t going to tell us what you think would work? Sheesh, just tax income above “x” amount at 100%. Done. ---
**Author:** ![Qin\_Shi\_Huangdi](https://avatars.discourse-cdn.com/v4/letter/q/f04885/32.png) [@Qin\_Shi\_Huangdi](https://boards.straightdope.com/u/Qin_Shi_Huangdi)\ **Post date:** [January 2, 2013, 3:17am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/4 "2013-01-02T03:17:37Z")
As long as the poor and the middle class retain basic social welfare programs (Social Security, Medicare/Medicaid/health care, unemployment benefits etc.), rising inequality is not an inherent evil. Much of the fact that the United States has such a high income inequality gap compared to other countries is the fact that we have a high number of historically disadvantaged minorities and new immigrants from poor countries. If one looks at the list of US states by income inequality: [http://en.wikipedia.org/wiki/List\_of\_U.S.\_states\_by\_Gini\_coefficient](http://en.wikipedia.org/wiki/List_of_U.S._states_by_Gini_coefficient), one will see that the most equal states are Utah, Wyoming, Alaska, New Hampshire, and Iowa while the most unequal states are New York, Massachusetts, and Connecticut. ---
**Author:** ![Human\_Action](https://avatars.discourse-cdn.com/v4/letter/h/ac91a4/32.png) [@Human\_Action](https://boards.straightdope.com/u/Human_Action)\ **Post date:** [January 2, 2013, 3:59am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/5 "2013-01-02T03:59:22Z")
> [@DrCube](#): > > ``` > Cash payments to the poor. > > ``` > > Lets say some percentage of the shortfall between their income and the poverty line. A dead band between the poverty line and some higher middle class income, and above that, some percentage of their income is taxed. Pretty simple really. Just for discussion, it sounds like you’re advocating a [negative income tax.](http://en.wikipedia.org/wiki/Negative_Income_Tax) > [@linked article](#): > > One model was proposed by Milton Friedman, as part of his flat tax proposals. In this version, a specified proportion of unused deductions or allowances would be refunded to the taxpayer. If, for a family of four the amount of allowances came out to $10,000, and the subsidy rate was 50% (the rate recommended by Friedman), and the family earned $6,000, the family would receive $2,000, because it left $4,000 of allowances unused, and therefore qualifies for $2,000, half that amount. Friedman feared that subsidy rates as high as those would lessen the incentive to obtain employment. He also warned that the negative income tax, as an addition to the “ragbag” of welfare and assistance programs, would only worsen the problem of bureaucracy and waste. Instead, he argued, the negative income tax should immediately replace all other welfare and assistance programs on the way to a completely laissez-faire society where all welfare is privately administered. I like the idea as an alternative to the dog’s breakfast of poverty assistance programs currently in place. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [January 3, 2013, 2:06am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/6 "2013-01-03T02:06:14Z")
Rebuild the labor movement so that they can demand higher wages and benefits for the working class, and act as a counterweight to corporate profits not being given to workers (if corporations fear a strike and labor backlash they would be less likely to hoard all profits for shareholders and investors). Also heavily regulate the financial industry. Paul Krugman has said that income inequality preceeded a global collapse both in 2008 and in 1929 and he said the reason could be that the financial industry became so unregulated that they created a very risky economy, but made themselves rich in the process (I don’t remember exactly how though. Either because they engaged in more risky/lucrative investments or something else about how this structures the economy, I don’t know). So strong financial reform should cut income inequality. [http://www.motherjones.com/files/images/Blog\_Bank\_Profits\_2009.jpg](http://www.motherjones.com/files/images/Blog_Bank_Profits_2009.jpg) A larger and more progressive corporate tax and income tax combined with taxing dividends, stock transfers, capital gains, etc in a larger and more progressive fashion. Use the money to fund regressive tax cuts or social programs. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [January 3, 2013, 2:08am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/7 "2013-01-03T02:08:33Z")
> [@Qin\_Shi\_Huangdi](#): > > As long as the poor and the middle class retain basic social welfare programs (Social Security, Medicare/Medicaid/health care, unemployment benefits etc.), rising inequality is not an inherent evil. Once again, please don’t hijack it, this thread asks only **how** to reduce the [Gini coefficient.](http://en.wikipedia.org/wiki/Gini_coefficient) ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [January 3, 2013, 2:14am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/8 "2013-01-03T02:14:57Z")
Destroy all wealth. I can think of a few ways, but it does eliminate income disparity. Alternatively, transform the United States into a complete autocracy. Those governments do terribly economically, but people stop pursuing wealthy (and often can’t anyway) and start pursuing power and/or security almost exclusively. ---
**Author:** ![Jackmannii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jackmannii/32/311_2.png) [@Jackmannii](https://boards.straightdope.com/u/Jackmannii)\ **Post date:** [January 3, 2013, 2:23am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/9 "2013-01-03T02:23:48Z")
One hopes the OP has pledged all of his income (above bare subsistence) to be redistributed among those making less money, as a start to reducing economic inequality. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [January 3, 2013, 2:40am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/10 "2013-01-03T02:40:37Z")
> [@smiling\_bandit](#): > > Destroy all wealth. I can think of a few ways, but it does eliminate income disparity. > > Alternatively, transform the United States into a complete autocracy. Those governments do terribly economically, but people stop pursuing wealthy (and often can’t anyway) and start pursuing power and/or security almost exclusively. Numerous european countries have far lower income inequality than we do and they are actively pursuing GDP growth. Claiming that wanting to lower income inequality is the equivalent of wanting to destroy wealth is a strawman argument. ---
**Author:** ![Der\_Trihs](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/der_trihs/32/233_2.png) [@Der\_Trihs](https://boards.straightdope.com/u/Der_Trihs)\ **Post date:** [January 3, 2013, 2:54am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/11 "2013-01-03T02:54:37Z")
Tax the rich - not just income, but in many ways to make it harder to hide the money. Then use the money for “safety net” programs and job-producing government programs like infrastructure upgrade and repair. Take the money from the rich and get it moving though the economy. Ideally I’d put in a hard cap on how much wealth an individual can have and anything more is confiscated and dispersed to the population; somewhere in the 10 million dollar range or so. Society doesn’t need rich people. If that results in them dispersing the money to their families fine, that breaks up the concentration somewhat; and if they flee the country we’re better off without them, and they won’t find another country that pampers them like America does. > [@Jackmannii](#): > > One hopes the OP has pledged all of his income (above bare subsistence) to be redistributed among those making less money, as a start to reducing economic inequality. Nonsense. Given that wealth is concentrated so hugely at the top, an effective wealth equalization scheme will probably make him at least a little richer (since he presumably isn’t rich himself); and by the same token he and the rest of the non-“elite” simply don’t have the money for any sort of “equalization” to do much if the rich aren’t involved. You can’t get blood out of a turnip. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [January 3, 2013, 2:55am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/12 "2013-01-03T02:55:22Z")
> [@smiling\_bandit](#): > > Alternatively, transform the United States into a complete autocracy. Those governments do terribly economically, but people stop pursuing wealthy (and often can’t anyway) and start pursuing power and/or security almost exclusively. Imperial Russia and Imperial China were autocracies. It did not prevent massive wealth-inequality, nor deter the pursuit of wealth. ---
**Author:** ![Kobal2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kobal2/32/20_2.png) [@Kobal2](https://boards.straightdope.com/u/Kobal2)\ **Post date:** [January 3, 2013, 2:56am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/13 "2013-01-03T02:56:46Z")
> [@Wesley\_Clark](#): > > Numerous european countries have far lower income inequality than we do and they are actively pursuing GDP growth. Ah, but _they_’re socialist hell-holes devastated by class warfare, see ? ---
**Author:** ![Sateryn76](https://avatars.discourse-cdn.com/v4/letter/s/a88e4f/32.png) [@Sateryn76](https://boards.straightdope.com/u/Sateryn76)\ **Post date:** [January 3, 2013, 4:37am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/14 "2013-01-03T04:37:30Z")
Figure out a way to convince teenagers from having children. I have no idea how to do it, but I’m appalled by so many people ignoring the very clear lines between having children at a young age, and the effects on your future. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [January 3, 2013, 4:59am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/15 "2013-01-03T04:59:15Z")
Make US labor more attractive to business again. Make it attractive enough that not just US manufacturing companies but foreign companies want to use it instead of importing in goods from cheaper labor areas. Put Americans back to work at the low and medium end wages in massive numbers and I think you’ll go a long way to reducing inequality…not that I think this in and of itself is a major problem, but since the OP doesn’t want to talk about that I guess that’s my solution to the ‘problem’. ---
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [January 3, 2013, 5:00am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/16 "2013-01-03T05:00:35Z")
> [@Sateryn76](#): > > Figure out a way to convince teenagers from having children. I have no idea how to do it, but I’m appalled by so many people ignoring the very clear lines between having children at a young age, and the effects on your future. One thing to add onto the previous good suggestions would be to persuade the poor to have no children and the rich to have many, many, many children. Should reduce the number of poor, and through inheritance, decrease the richness of the individual rich. ---
**Author:** ![don\_t\_ask](https://avatars.discourse-cdn.com/v4/letter/d/e68b1a/32.png) [@don\_t\_ask](https://boards.straightdope.com/u/don_t_ask)\ **Post date:** [January 3, 2013, 5:11am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/17 "2013-01-03T05:11:35Z")
Equality of expectation in relation to financial obligations. In capitalist systems it is necessary for workers to forego money to prepay for every future expense they may be subject to. Part of their income is taken to pay for health care, part is taken for social services, part is taken in taxes. Businesses have no such constraints. Their costs aren’t raised or their benefits reduced when the economomy hits the skids, although it’s them that owe all the money. For them governments can just make more money and take it out of the general pool of revenue. Why the rich even get their homes and private beaches rebuilt after Sandy. It seems that the answer to the financial crisis everywhere but Iceland revolves around workers and retirees paying the price. The financial systems just reset and march on to the next inevitable collapse. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [January 3, 2013, 5:28am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/18 "2013-01-03T05:28:09Z")
> [@XT](#): > > Make US labor more attractive to business again. Make it attractive enough that not just US manufacturing companies but foreign companies want to use it instead of importing in goods from cheaper labor areas. Put Americans back to work at the low and medium end wages in massive numbers and I think you’ll go a long way to reducing inequality… Wait, now, you’re talking about Americans laboring on competitively cheap terms with Third-Worlders . . . How does that **reduce** economic inequality in America?! ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [January 3, 2013, 5:37am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/19 "2013-01-03T05:37:05Z")
> [@BrainGlutton](#): > > Wait, now, you’re talking about Americans laboring on competitively cheap terms with Third-Worlders . . . How does that **reduce** economic inequality in America?! What reduces inequality more…a few overpaid workers and lots of folks working for minimum wage, or a lot of medium wage workers? A lot of labor in the US is, IMHO, under-utilized today. Companies have either automated massively or offshored and outsourced, either to cheaper labor states or to other countries. To me, the reason for this is that US labor has priced itself out of the market, and a way to rectify this, again IMHO, is to have US labor worth what the market will pay for it. Doing this could rebalance the import equation and make it more attractive to source manufacturing here in the US instead of in other countries and then pay the expense of transporting it over here. That’s my opinion of course, but I’m sure it’s not what you were looking for in this thread. Most likely you want the standard circle jerk of fixing the ‘problem’ by seizing the wealth of The Rich and redistributing it to everyone else as a silver bullet fix. I thought I’d be a bit different and give my own opinion, though as I said, I think it’s a problem that doesn’t need to be fixed, though I do think the labor thing IS an issue that needs a serious market adjustment to make the US competetive again at the low and medium end for semi-skilled labor. YMMV of course. ---
**Author:** ![Kobal2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kobal2/32/20_2.png) [@Kobal2](https://boards.straightdope.com/u/Kobal2)\ **Post date:** [January 3, 2013, 5:39am UTC](https://boards.straightdope.com/t/how-can-economic-inequality-in-the-united-states-be-reduced/645792/20 "2013-01-03T05:39:01Z")
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