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OECD: Tax and Spending Policy Can Push Against Rising Inequality

December 13, 2011

A number of reports on the recent income inequality study by the Organisation for Economic Co-operation and Development (OECD) have highlighted the finding that the United States ranks fourth in inequality among OECD countries. This ranking uses the “Gini” index of the distribution of “market income” —...

Senate Balanced Budget Amendment Goes Far Beyond European Budget Rules

December 6, 2011

The Senate will vote this month on a constitutional balanced budget amendment that would require a balanced federal budget every year, regardless of the state of the economy, unless two-thirds of the House and Senate overrode that requirement.  While some proponents point to balanced budget requirements in some European countries as evidence that the United States should adopt one, too, no...

Why the Tax System Is Doing Less About Growing Inequality

November 4, 2011

As we have explained, the joint congressional “supercommittee” — and any future efforts at deficit reduction — should raise significant revenues, and do so progressively. A recent Congressional Budget Office (CBO) report highlights why.

It shows not only that income inequality has dramatically increased in recent decades (a point that we have previously discussed), but also that “the increase in inequality of after-tax income was greater than the increase in inequality of before-tax income.” That is, the federal tax system as a whole did less to equalize the distribution of income in 2007 than it did in 1979.

Congressional Research Service Confirms: “Current U.S. Tax System Violates the Buffett Rule”

October 13, 2011

When President Obama enunciated the so-called “Buffett Rule”— that millionaires shouldn’t pay lower tax rates than middle-income families — he raised an obvious question: how many millionaires are we talking about? A new study by the Congressional Research Service (CRS) concludes: