Don't Raise Taxes on Rich; Redirect Money to Poor

Raising taxes would only create stagnation: Barone
By Mark Russell,  Newser Staff
Posted Nov 27, 2011 5:54 PM CST
Political Analyst Michael Barone thinks the way to best fix income inequality is to focus on entitlement reform, not raising taxes on the rich.   (WMALNews)
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(Newser) – "What should be done about income inequality?" This question "underlies the arguments hashed out in the supercommittee and promises to be a central issue in the presidential campaign," writes Michael Barone in the Washington Examiner. Barone's answer, based on a recent paper by Republican lawmaker Paul Ryan: Limit so-called transfer payments to the affluent, so wealthy folk don't continue to benefit from programs designed to help low-wage earners.

At issue are payroll taxes, which largely hit poorer Americans—but pay for programs like Social Security and Medicare, which increasingly help older, richer Americans. If lawmakers "limit future increases in transfer payments to affluent households," more of that money will stay with the Americans who need it, Barone argues. He admits that the idea "won't reduce income inequality altogether." But it will help more than the Democrats' idea of "raising tax rates on high earners," which he calls "a recipe for Europe-style stagnation." (Read more tax rates stories.)

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