Winnipeg Free Press - ONLINE EDITION

Some progress on income-equity file

  • Print

Intense as it is, the current debate over rising income inequality is hardly new. It represents the resumption of a discussion that was gathering momentum just before the Great Recession — and then got sidetracked amid the urgent business of dealing with that crisis. Our contribution to that interrupted argument was a series of 10 editorials devoted to inequality over the course of 2006, the last full pre-recession year. To revisit those pieces now is to experience a reality check on the progress that has, and has not, been made since. The good news is that there’s more good news than one might expect.

As we saw the problem then — and still see it now — some of the factors that have led to increasing income inequality are more amenable to policy solutions than others. There isn’t much government can do about the sweeping forces of technology and globalization, and some perennial recommendations — such as limiting free trade — would do more harm than good. Whatever else government does, it must preserve the engine of capitalist growth, without which there would be fewer resources to distribute, equitably or otherwise. On that score, what’s most encouraging is what the United States and, indeed, most of the world, have not done; in particular, they’ve weathered the Great Recession without a significant reversion to such failed strategies as trade protectionism or limitations on capital mobility.

In addition to avoiding making things worse, the country has adopted, at least in part, several of the policy improvements we thought made sense eight years ago. Most prominent among these was President Barack Obama’s health-care reform, which, for all its problems, promises to ease the health-care cost squeeze on middle- and lower-income Americans. In addition, as of Jan. 1, 2013, the top marginal tax rate was raised nearly five percentage points, from 35 per cent to 39.6 per cent for individual earnings more than $400,000 and household earnings above $450,000. This restores some progressiveness to the revenue system that was undercut by the Bush tax cuts, without significantly reducing high-earners’ incentives to work and produce.

Finally, both the federal government and the states are re-emphasizing the importance of early education; though President Obama’s call for universal preschool remains unfunded, the newly unveiled 2014 appropriations bill boosts spending on Head Start and authorizes a new $250-million competitive grant program for states to develop or expand high-quality preschool programs for four-year-olds from poor families.

Of course, it is too early to measure the impact of these recent changes. And there’s at least one big piece of unfinished business: tax reform. As we argued in 2006, multiple deductions, loopholes and credits not only make the code and the economy less efficient; they also disproportionately favour upper-income Americans. Taken together, the 10 largest breaks — including the mortgage-interest deduction, the preferential rate for capital gains, the exclusion for employer-paid health insurance and the deduction for state and local taxes — cost $900 billion per year. More than half of the benefits flow to the top 20 per cent of households, according to the Congressional Budget Office. A fairer code is an indispensable step to a more equal America.

— The Washington Post

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes


  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.


Make text: Larger | Smaller


Jim Flaherty remembered at visitation as irreplaceable

View more like this

Photo Store Gallery

  • A gaggle of Canada geese goslings at Woodsworth Park in Winnipeg Monday- See Project Honk Day 05- May 07, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • JJOE.BRYKSA@FREEPRESS.MB.CA Local-Postcard  Day-Horror frost and fog created a most beautiful setting at Assiniboine Park Thursday morning in WInnipeg- Enviroent Canada says the fog will lifet this morning and will see a high of -7C-  JOE BRYKSA/WINNIPEG FREE PRESS- Feb 18, 2010

View More Gallery Photos


Do you think Manitoba needs stronger regulations for temporary workers?

View Results

View Related Story

Ads by Google