Wednesday, May 29, 2013

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Mark Gongloff reaches the unsurprising conclusion that a tax system warped to favour the interests of the wealthy leads to greater inequality (but not the promised growth):
Slashing top tax rates has had none of the positive effects on economic growth that the supply-side economists promised us, the NBER paper points out. Instead, it has just worsened income inequality.

There are other factors driving income disparity, including a rise in investment income (think stock dividends) compared to earned income (think wages). The recently soaring stock market, helped along by the Federal Reserve, is only pushing investment income higher. Wage income, in contrast, has been stagnant -- making income inequality even worse.

As if that weren't enough, investment income is typically taxed at lower rates, further amplifying the disparity. That means this chart doesn't begin to tell the full story of just how little the top one percent are paying in taxes. Mitt Romney isn't paying 35 percent on most of his income. He's calling his private-equity income "carried interest" and paying just 15 percent on it.

While Congress frantically finds ways to slash spending to close budget deficits, it has shown little interest in tweaking the tax code to make it more fair. Efforts to impose a minimum tax on millionaires, as Warren Buffett has suggested, have gone nowhere, as have efforts to do away with low carried-interest income tax rates. President Obama this year made permanent many of the top-rate tax cuts of President George W. Bush, while a payroll-tax cut that most benefited the poor was allowed to expire.
- Erica Alini notes that ill-thought-out austerity programs have produced massive increases in suicides - even as Jim Flaherty expresses his preference for general slashing regardless of the human cost. And Thomas Walkom writes that the Cons are designing Canada's Employment Insurance system to provide cushy patronage jobs for their friends rather than any useful support for workers.

- But lest we forget that it's possible for governments to actually improve the lives of citizens, Jason Markusoff reports on the City of Calgary's push to halve poverty in ten years (primarily by better applying the resources it already has). And Don Lenihan discusses Nunavut's new collaborative poverty reduction strategy.

- Finally, if anybody hasn't yet seen Tom Mulcair's devastatingly direct question-period back-and-forth with Stephen Harper, it's well worth a look:

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