Friday, April 06, 2012

The Real Causes of Income Inequality

Gramm and McMillin: The Real Causes of Income Inequality - WSJ.com
This growth in income inequality is largely the result of three dynamics:

1) Changes in the way Americans pay taxes and manage their investments, which were a direct result of reductions in marginal tax rates.
2) A dynamic shift in the labor-capital ratio, resulting from the adoption of market-based economies around the world.
3) The flourishing of economic freedom and technological advances in the Reagan era, which were the product of lower tax rates, a reduced regulatory burden, and an improved business climate.
These changes have not only raised the measured income of the top 1%, they benefited the nation and the world.

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