Thread by @HBoushey

In light of the new @iteptweets report (if you haven’t already, read it here itep.org/federal-tax-cu…), a thread on rising inequality & how effective tax policy can address it 1/15

As @PikettyLeMonde, @gabriel_zucman & @berkeley_olab’s Emmanuel Saez have shown, the bottom half of the income distribution has been completely shut off from economic gains since the 1970s
equitablegrowth.org/economic-growt… 2/15

They find that from 1980-2014, incomes grew:
121% for the top 10%
205% for the top 1%
636% for the top .001%

and a whopping 1% for the bottom 50% gabriel-zucman.eu/files/PSZ2018Q… 3/15

According to @HarvardEcon’s Raj Chetty et al, today’s high #inequality is chipping away at the American Dream -

Of children born in 1940, 92% earned more than their parents.

Of children born in 1980, only 50% out-earned theirs. equitablegrowth.org/the-fading-ame… 4/15

Even more telling, they find that while a faster-growing economy that is still highly unequal does boost mobility, the increase in mobility is much higher when the distribution of slower growth is more equitable equitablegrowth.org/the-importance… 5/15

Unsurprisingly, they find that absolute mobility is highest—an avg. of ~92%—when growth is both strong AND equitably distributed.

If policymakers want to boost the living standard of future gens, they need to take steps to boost econ growth AND ensure it's broadly shared
6/15

For generations, we’ve been told that #inequality is acceptable because the US is the land of opportunity.

But this is not what the evidence shows. To improve opportunity, we must address inequality. equitablegrowth.org/inequality-mob…
7/15

What the evidence does show is that well-designed tax reform can help.
equitablegrowth.org/u-s-tax-policy… 8/15

As @gregleiserson & I lay out in a recent column for @DemJournal, a tax system focused on corrective taxation, the treatment of investment income & the treatment of domestic biz income would deliver higher living standards at the same revenue level
democracyjournal.org/arguments/taxi… 9/15

On top of this redesign, policymakers should raise additional revenues in a progressive manner to finance the country’s spending needs—so we’re investing more, not less—on our children, infrastructure, and public health. 10/15

By contrast, the recently enacted #TaxCutsandJobsAct will likely increase disparities in economic well-being, after-tax income, and pre-tax income, explains @gregleiserson equitablegrowth.org/presentation-u… 11/15

And the clear absence of large increases in the wage rate confirms that the benefits of the corporate tax cuts are currently flowing primarily to shareholders, not workers thehill.com/opinion/financ… 12/15

& @jasonfurman writes "The data so far show that a large fiscal expansion may be helping with higher GDP growth in the short run but give us no reason to believe that the tax changes are going to make a meaningful difference for American workers over time”
thehill.com/opinion/financ…

And as @dleonhardt writes, “The top-earning 1 percent of households—those earning more than $607,000 a year—will pay a combined $111 billion less this year in federal taxes than they would have if the laws had remained unchanged since 2000”
nytimes.com/2018/07/11/opi… 14/15

We need to address economic inequality to save what’s best about our nation.

We need a tax system that supports strong, stable, and broad-based economic growth, not one that continues to reward the wealthiest Americans at the expense of everyone else. 15/15

For more cutting-edge research and analysis about the relationship between economic inequality & economic growth, follow @equitablegrowth and all of our #EGgrantee(s)! 16/15