The Unseen Cause of Inequality
18th July 2020
In recent decades, income inequality in the United States has increased sharply, and the novel coronavirus crisis seems to have exacerbated the problem. Some blame tax cuts for creating billionaires and leaving the middle class behind, but it’s not that simple. While lower taxes did influence inequality, taxes alone are a red herring. Mounting evidence shows something else driving the uptick in inequality: Regulation.
Taxes are salient to this conversation, while regulation is silent. Every year on your W-2, and even more frequently on your paycheck, you see how many dollars of income you lose to taxes. Yet there is no such accounting for the unseen power of regulation to lower the average American’s income, raise prices and protect the position of the wealthy.