These days the mainstream magazines are full of stories that lament the economic and social flaws of income inequality. But perhaps the real ‘income inequality problem’ is that incomes aren’t unequal enough!
Some say that the present U.S. GINI is unprecedented. Wrong! It was higher at the height of the Roaring Twenties boom — those years were called ‘Roaring’ for a reason. 14th-century Paris, just before the bubonic plague struck, had a GINI estimated at 0.7. The great New Spain Empire during the 18th century also had a GINI much higher than today’s U.S.
Like “P/E ratio” — which needs a 2nd parameter to be meaningful — GINI is misleading without a 2nd parameter. See, for example, this graph.
Even a flat tax, as you’ve defined it, might be unfair to the rich. I explained this in an earlier thread:
