What Can We Do to Fix Income Inequality?

We know income inequality is near an unprecedented level and that America is home to one of the most unequal economies in the world. The share of total income taken home by the top 1% of Americans has gone from 8.9%, in the 1970’s, to 22%, by 2015. We know that this unequal distribution of income not only leads to economic stagnation, but is also incredibly dangerous. There are two years in the last 100 when the top 1% took home at least 23.5% of total income. Those 2 years were 1928 and 2007, the years before the ‘Great Depression’ and the ‘Great Recession’. It is not a coincidence that the 2 years of peak inequality are followed by tremendous economic crashes. An economy cannot sustain such gross inequality.

So instead of just complaining, here are 15 practical ways to fix our broken economy to make sure it works for all Americans and not just a handful of super wealthy elites:
  1. Renegotiate free trade agreements.
    1.  Any country that engages in free trade with the United States must follow the same labor codes and standards of the United States. US companies or foreign companies who take advantage of slave labor wages, dangerous work conditions and lax environmental regulations of 3rd world countries should not be allowed to import their products into the United States.
  2. Reform Wall Street and Financial Institutions
    1. Break up the big banks and reinstate Glass-Steagall. 
    2. Criminalize the risky behavior that tanked the economy in the fiscal crisis of 2007-2008. 
    3. End corporate stock buybacks. 
    4. Regulate the derivative markets. 
    5. Criminalize the behavior of corporate activists, raiders and vulture capitalists. 
    6. Cap shareholders share of corporate profits and force companies to reinvest profits back into the company to ensure long term competitiveness. 
  3. Cap CEO pay. 
    1. In 1950 CEO to average worker pay was 20-1. Today, on any given year it can be as high as 475-1.
  4. Pass a new corporate ethics law that demands that companies must act in the interest of the public, their employees, their environment and not just their shareholders on Wall Street.
  5. Strengthen the Consumer Financial Protection Bureau to prevent the predatory behavior of large financial institutions.
  6. Reform the tax code. 
    1. End the carried interest loop hole. 
    2. Raise the top marginal tax rate to 70%. 
    3. Tax capital gains and dividend income at the same rate as ordinary income. 
    4. End corporate tax loopholes including foreign tax havens.
    5. Reinstate and increase the estate tax to 70%.
  7. Increase Social Security benefits. Remove the cap so that incomes above $127,200 are not exempt from Social Security tax.  
  8. Pass an infrastructure reinvestment act that rebuilds our crumbling airports, bridges, reinvests in inner cities, builds new schools and hospitals.
  9. End “Right to Work" laws and all other laws designed to undermine the ability of unions to negotiate for better pay, fair benefits and safe working conditions.
  10. Invest in renewable green energy and transition our economy away from fossil fuels.
  11. Reform our criminal justice system that disproportionally affects minority communities. 
  12. Establish a Medicare For All single payer healthcare system. 
    1. More than 50% of personal bankruptcies are related to medical bills. Even insurance does not inoculate one from the threat of overwhelming and unpayable medical bills. A medicare for all single payer system will protect millions of poor and middle class families who have gone bankrupt due to medical bills. America is completely unique in the number of medical related bankruptcies.
  13. Raise the minimum wage. No one working 40 hours a week should be living in poverty.
  14. Universal pre-k and free college education.
  15. Reform the way elections are financed. End legalized bribery. None of these reforms can be achieved until the corrupting influence of money has been eradicated from our political system once and for all. 
I think that is a pretty good start. 
Interested to hear your thoughts. 

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Comments

  1. Build a Worker Co-op sector in a similar way that Jeremy Corbyn's Labour Party have proposed: if a corporation is to sell itself or dissolve itself give the workers the right of first refusal to purchase the company, with low interest loans to be made available from the government to fund these purchases.

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