When Democrats regained control of the US House of Representatives, Alexandria Ocasio-Cortez, D-NY, almost immediately took aim at America’s growing income inequality by recommending a 70 percent tax rate on income over US$10 million.
Income inequality refers to the unequal distribution of income between the rich and poor.
Inequality in the US has dramatically increased since the 1970s, under both liberal and conservative administrations in Washington. And the kind of policy Ocasio-Cortez is proposing will be impossible to pass with the polarized politics in Washington, DC.
The federal government could reduce inequality by raising the federal minimum wage, raising taxes on the wealthy, regulating the financial sector and strengthening labor unions.
Instead, the federal government has more often done the opposite in recent decades, and these actions have contributed to growing inequality. In my recent book with William Franko, The New Economic Populism: How States Respond to Inequality, we examine what the states are doing to combat inequality in the absence of federal action to address it.
Combating Inequality in the Most Unequal States
Massachusetts, sometimes called “Taxachusetts” because of its liberal policies, is among the most unequal states in the country. Between 1980 and 2015, the share of income in the state going to the top 1 percent of earners increased from 10 percent to over 25 percent.
Politicians in Massachusetts have been pushed by activists and unions to combat this growing inequality.
For example, when state Senate President Stan Rosenberg, a Democrat, took office in 2015, he named the fight against economic inequality as his major priority. He led attempts to change the Massachusetts Constitution to increase taxes on millionaires to pay for early childhood education. Legal challenges prevented this amendment from going before voters for their…