A carbon tax on investment income could be more fair and make it less profitable to pollute – a new analysis shows why

  About 10 years ago, a very thick book written by a French economist became a surprising bestseller. It was called “Capital in the 21st Century.” In it, Thomas Piketty traces the history of income and wealth inequality over the past couple of hundred years.

  The book’s insights struck a chord with people who felt a growing sense of economic inequality but didn’t have the data to back it up. I was one of them. It made me wonder, how much carbon pollution is being generated to create wealth for a small group of extremely rich households? Two kids, 10 years, and a Ph.D. later, I finally have some answers.

Why inequality is growing in the US and around the world

  U.S. income inequality grew in 2021 for the first time in a decade, according to data the Census Bureau released in September 2022.

  That might sound surprising since the most accurate measure of the poverty rate declined during the same time span.

  But for development experts like me, this apparent contradiction makes perfect sense.

Raising the minimum wage would boost an economic recovery—and reduce taxpayer subsidization of low-wage work

  President Joe Biden included a long overdue pay raise for millions of America’s minimum wage workers in his $1.9 trillion rescue plan rolled out last month. Its inclusion immediately came under fire by those who argue it is extraneous to an economic recovery and divisive. However, research from the Center for American Progress and many economists shows that getting money into the hands of those who are most likely to spend it will boost their communities and the national economy and also reduce federal spending.

Money buys even more happiness than it used to

  Many factors determine happiness, but one has stirred considerable controversy over the years: money.

  While the old adage says that money can’t buy happiness, several studies have determined that the more your income increases, the happier you are, up until US$75,000 a year. After hitting that threshold, more income doesn’t make a difference.

Five lessons from the coronavirus about inequality in America

  The coronavirus is a global threat, but the pandemic has an uneven impact across the United States. It exacerbates existing inequalities and creates new challenges.

  I think this crisis can teach several important lessons about inequality in America: how it hurts, who it hurts the most, why that’s the case, and what can be done about it.

Inequality is higher in some states like New York and Louisiana because of corporate welfare

  Income inequality made big headlines recently after the U.S. Census Bureau released new data showing that the gap between the richest and poorest Americans is at its highest level in at least half a century.

  Less reported was the significant variation among the states. New York and California had the highest inequality in 2018, while Utah and Alaska had the lowest. In addition, states as diverse as Alabama, Texas, and New Hampshire experienced large increases from the prior year.

  Why are some states more or less equal than others?

So you want to tax the rich: A how-to guide

  Taxing the rich has been a hot subject of late thanks to a few Congressional Democrats. First, New York Rep. Alexandria Ocasio-Cortez floated the idea of raising the top marginal income tax rate to 70 percent. Then Massachusetts Sen. Elizabeth Warren proposed a “wealth tax” on those who have at least $50 million in assets. And last week, Vermont Sen. Bernie Sanders proposed increasing the estate tax for those who inherit more than $3.5 million.

  These ideas have been met with predictable consternation from conservatives. CEOs and Wall Street-types gathered at the annual World Economic Forum in Davos even had a good laugh when asked about Ocasio-Cortez’s idea.

  But raising taxes on the rich isn’t a joke. It’s an economic necessity.

There’s a retirement crisis and the new $15 minimum wage bill could help

  We’re several weeks into the 116th Congress, every day of which has been consumed by the longest government shutdown in U.S. history. The president has manufactured this crisis, holding the government hostage to fund a symbol of his xenophobia, while ignoring the deep, snowballing damage he is inflicting on workers, families, and the economy. But Trump’s shutdown doesn’t mean newly-empowered congressional Democrats have been twiddling their thumbs.

  Last week, House and Senate Democratic leadership introduced the Raise the Wage Act, which would gradually increase the federal minimum wage to $15 per hour by 2024. It would also link the minimum wage to median wage growth thereafter, and phase out sub-minimum wages for tipped workers, which has been stuck at $2.13 per hour for 28 years, and workers with disabilities, which allows employers to pay disabled workers as little as pennies per hour.

Sam Fulwood III: Confronting the racial pay gap

  The Intel Corporation is about to do something so radical and unconventional in the realm of American business that its CEO, Brian Krzanich, admits that he’s “scared to death.” What could possibly so rattle the confidence of the top official of the world’s largest semiconductor chip manufacturer?

  How about Krzanich having to publicly admit to the world that his highly visible and extremely profitable firm pays its African American, Latino, and Native American employees unfairly in comparison to its white and Asian American workers?

Eric Alterman: The super-rich and their monster

  As Ian Reifowitz of the Daily Kos pointed out, an article in The New York Times’s business section shows that our tax system has been successfully gamed to the point where the wealthiest Americans pay a much smaller percentage of their income than salaried, middle-class taxpayers. Using 2009 IRS data—the most recent available—America’s top 400 earners, who take in an average adjusted gross income of more than $200 million, paid less than 20 percent of those princely sums to the tax man. Those who only made it into the top 1 percent of earners—a few of whom earn as little as $344,000—paid 24 percent.

Ian M. MacIsaac: Great Recession hit homeowners, lower-middle class hardest while wealthy recovered quickly

  The gap between the rich and the poor in America continues to grow, according to a report by the nonpartisan Congressional Research Service (CRS) entitled "An Analysis of Distribution of Wealth Across Households, 1989-2010."

  A full half of Americans--150,000,000 people--possess only 1.1% of the total assets held by all Americans. The other, richer half of the population holds the other 98.9%.

  The United States has never had a wealth gap this large between its upper and lower classes, not even during the Gilded Age when Standard Oil and US Steel reigned terror over the country.

  According to the CRS's report, the three million Americans who make up the top one percent possess 34.5% of a pie that a full half of us own only 1.1% of.

David Madland: Americans care about economic inequality

  Americans care deeply about our record-high levels of inequality and believe our economic system favors the wealthy. While some conservatives argue that Americans don’t care about economic inequality, a review of recent polling shows this claim to be utterly false. Moreover, Americans would prefer significantly less economic inequality than we currently have and think government should address the issue.

  Americans are more concerned with equality of opportunity—97 percent of Americans think everyone in America should have equal opportunities to get ahead—than with equality of results. But as we show below, they are quite concerned about the level of inequality we currently have, and critically, Americans believe that high levels of inequality reduce the opportunity for people to get ahead.