Positive thinking

Gil B. Manzon Jr., Boston College “If poor people knew how rich rich people are, there would be riots in the streets.” Actor and comedian Chris Rock made this astute statement during a 2014 interview with New York magazine, referring to the yawning gap between rich and poor. In so doing, he stumbled upon a key challenge in the study of inequality. What’s the best way to measure it? Most inequality studies have focused on income – measures of which are widely available . However, being rich is not about a single year of earnings but rather about the accumulation of wealth over time. In the past, quantifying that has been tricky. The wealthy would probably prefer we stay in the dark about how rich they are, presumably to avoid the aforementioned riots. People like me who study the topic, however, are always looking for more data and better and more accurate ways to measure the rich-poor gap. And while I’m not one to promote violence in the streets, I do believe it’...

   Daniel Hemel, University of Chicago The tax bill passed by the Senate in the wee hours of Dec. 2 will – if it becomes law – widen the gap between the rich and the poor at a time when income inequality is already approaching historic heights. Initially, most U.S. households are likely to experience a modest tax cut under the Senate plan. However by 2027, the average family earning less than US$50,000 would pay about $250 more in taxes under the Senate plan, while the average family earning more than $1 million would experience a tax cut topping $8,000 a year, according to estimates from Congress’s own Joint Committee on Taxation. Yet even those stark statistics understate the full impact of the Senate bill on long-term inequality in the United States. In my own research, I examine the relationship between the tax system and inequality. In my view, there are two significant reasons why the bill’s impact will be even more dramatic – and even more regres...