“Canadian Inequality: Recent Development and Policy Options”

While inequality in Canada has increased over the course of the last three decades, the tax and transfer system can significantly reduce disparities in market incomes. But the political will to use the tax system may be limited, and public policy needs to address underlying labour market developments if it is to pursue an agenda of greater equality.

This is one of the major themes arising from a recently released discussion paper by a group of labour economists from the University of British Columbia: Nicole Fortin, David Green, Thomas Lemieux, Kevin Milligan, and Craig Riddell.

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Social mobility and inequality in the UK and the US: How to slide down the Great Gatsby Curve

In a speech given this morning to announce an update on the government’s Strategy for Social Mobility, Nick Clegg, the Deputy Prime Minster of the United Kingdom, said that “We need an open society where people choose their place”; he said that “The effect of social class and class attitudes on Social Mobility are the ghost in the machine.”; and, in summary, he said that “We are a long distance from being a classless society”.

Yet in the same breath, he also said that it is a myth to suggest that reducing inequality will promote social mobility.

This is surely an inappropriate representation of the role of inequality in determining opportunity.

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Inequality and Occupy Wall Street 8: causes of growing inequality and policies to address it

This video of a panel discussion called “The Challenges of Growing Inequality” organized by the Kennedy School of Government at Harvard University features a discussion by Lawerence Katz, a prominent labour economist. Katz speaks on the causes of inequality and offers advice to Occupiers on what should be done about it.

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Inequality and Occupy Wall Street 7: tax policy for occupiers

Perhaps a bit more politely than others in the mainstream media, but nonetheless pretty emphatically, the Ottawa Citizen columnist Joanne Chianello tells Occupiers that it’s time to leave, and she offers some advice:

“I don’t know what the answer is to the growing income gap. Unfortunately, neither do the people at Occupy Ottawa or Occupy Toronto or Occupy Vancouver. They could have contacted a lefty economist (yes, they exist) to help frame specific policy issues or demands, but they didn’t. Perhaps that’s the protest’s “stage two” we keep hearing about.”

Contact a lefty economist!

Well, if economists are going to be at the centre of “stage two” why don’t we forget about “lefty” or “righty”, and just consult the “best”?

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Inequality and Occupy Wall Street 6: tax principles for occupiers

Believe it or not, there is such a thing as a good tax.

A good tax raises the required government revenue by not only treating equals equally, but also by requiring more from those who will be hurt the least.

However, that is not all: a good tax is also a tax that is administered simply, transparently, and in a “neutral” way.

“Neutral” means it does not cause individuals and corporations to behave differently; in other words, the tax respects the outcomes of the marketplace (unless of course prices do not accurately reflect the true costs and benefits of an activity. In this case the tax might be used to explicitly correct these market failures.)

This confronts Occupiers with a dilemma.

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