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American Political Economy
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An economic issue in the heads of most voters regards the income inequality. Reducing the income inequality will help to lift up the working Americans and shore up the middle class. Therefore, there is a need for a policy that will help remedy the problem. The widening income gap between the poor and the rich indicates the need for understanding the causes of inequality and constructing suitable policies to narrow the income gap. According to a report by OECD, it indicates that the gap between the rich and the poor is at its highest level in 30 years in most OECD countries. The increases in income inequality driven by the top rich 1% who see their incomes accelerate away from the average. Therefore, there is a need for a plan on how to resolve the problem and limit the negative sites effects that may occur as a result of the plan.
One issue to focus on so as to resolve the problem is removing the tax loopholes and the tax breaks that tend to benefit the rich and the multinational corporations. The super rich and the multinational corporations have not been paying a fair share in taxes. Therefore, one action to consider is making sure that those loopholes that exist, which allow such activities to happen no longer exist. In the process, it is also right to raise the rates for the wealthiest Americans. When reforming the tax system in this manner, the financial problem for the expanded social safety net programs will be placed on those with the extraordinary means (Nelson, 2015). When the super rich do not pay their share of taxes, it results in a lack of enough funding for a program that will help alleviate systemic inequalities. It will be necessary to reform the tax code so as to break out the vicious cycle and enable more people to get economic opportunities and build a stronger and more equitable economy.
The ordinary taxpayers normally pay tax on their earnings at the ordinary income tax rates up to the 35%. On the other hand, the rich are different from ordinary Americans in the fact that they make most of their money through investment rather than the standard paychecks. That means that most of the money taxed at the 15%, which is a loophole in taxation. Therefore, so as to ensure that the policy is effective, it will be necessary to tax corporations more fairly, fix the estate tax so that the mega-rich families can pay their fair share, and progressive income taxes on the richest Americans (Block, 2008). The richest Americans include those people at the top income tax bracket that begin with money made beyond $400,000, which is taxed at 39.6%. With this policy, those people earning money beyond $400,000 will have to pay a tax of 39.6%. When we consider this tax code policy, the policy will manage to raise over $500 billion in the next ten years. With the money generated from this policy, it will work a great part in reducing the income gap (Block, 2008). Money from the policy can help in funding those programs that will help alleviate systemic inequalities.
Invest in education
Another policy that can help to solve the income inequality problem is investing more in education. The differences in the education and the school quality tend to be an essential component contributing to the persistent inequality across different people. Investing in education can help to increase the economic mobility and contribute to decreased inequality (Jelski, 2012). The gap between the poor and the rich has nourished years of social and political instability in regions characterized by enormous natural resource reservoirs and a great workforce potential (Nelson, 2015). To help resolve the problem of income inequality, we need the best-educated workforce. It is insane to the interest of our country that thousands of bright young people cannot afford to go to college, and millions of those leaving school have a mountain of debt that burden them for years. Therefore, with an effort is resolving the issue of income inequality, it will be necessary to invest in education so that young people can go to college regardless of how much money that they parents make and without getting deeply into debt (Jelski, 2012).
The plan to make this possible is to make tuition free at the public universities and colleges. So as to fund the free college education, the federal government will have to fund a certain percentage of the cost through the use tax on the Wall Street. It is possible to get funding from Wall Street tax because the trading in Wall Street is very huge; therefore, it can help fund a college education. Another source of funding will come from the state.
Rampant inequality tends to be killing the American dream. Income inequality is an issue affecting Americans today. Reducing income inequality should be a top priority for any presidential campaign. Therefore, it is important to focus on lifting up the working Americans. The above policies can help minimize the rising income inequality prevalent in the US and with the proposed funding; it will help to slow the growth of the inequality.
Jelski, D (2012). A free college education for all.
Block, W (2008). Labor economics from a free market perspective. World Scientific
Nelson, M (2015). Guide to the presidency. Routledge Publishing
Wascher, W & Neumark, D (2008). Minimum wages. The MIT Press
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