Less Inequality + Lower Taxes on the Rich

Matthew Yglesias says that there will not be a bipartisan compromise on inequality because the Republican party wants lower taxes on the rich.

I think he’s right that there won’t be a bipartisan compromise on inequality.  But I do note that you could lower inequality pretty easily (to a degree) while not raising anybody’s taxes, or not raising the taxes on the rich.  You could, say, raise the EITC and raise the standard income tax deduction by $1,000.  That would increase the incomes of the poor (through the EITC) and the middle class (through the deduction), and would lower the taxes of at least some of the rich (those who use the standard deduction, which is probably not many of the super-rich, but is lots of the top quintile or decile).

Or whatever.  There are about a billion ways to give money to the poor, and giving money to the poor would decrease inequality.

You have to pay for these programs somehow, but it doesn’t have to be via taxing the rich.  You could cut, say, military spending.  Or farm subsidies.  Or, to take another suggestion that Yglesias presumably does not favor, you could means-test Social Security, and then you’d get it in both directions (lowering the income of the wealthy, raising the income of the poor), without technically raising taxes on the rich (and, lest I be accused of sophistry, I think that there’s at least a chance that the Republicans would go along with means-testing SS in a way that they wouldn’t go along with a similar tax on the rich, on the grounds that the Republicans aren’t super-fond of SS anyway, and would go with any way to weaken it.  Though perhaps in practice the seniors lobby is just too strong for anyone from any party to go against).  Or we could weaken (perhaps by further means-testing) higher education subsidies, which the Democrats favor, but are overwhelmingly subsidies which go to middle and upper class families.

The point of this is, yes, a compromise probably will not happen.  But it’s not for a unidirectional reason.  And, indeed, part of it is that the Democrats are ideologically blinkered and don’t so much want “lower inequality” as “to tax the rich.”  (To be clear, plenty of the rest of the reason is stuff like “the US spends an absolutely insane amount of money on our military,” and while that’s to some extent a bipartisan agenda, it’s more the Republican’s agenda than the Democrats’.  So some of this is just “Republicans won’t compromise for several different reasons.”)


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