[gentschev]

We all agree the article's dumb and pretty poorly written. Many lower income people pay no income taxes at all. I think that's rightly so, but it seems silly to write about a lack of redistribution in the US. In fact, the top 50% of households in income paid 97% of income taxes in 2008.

What is troubling, and what the author ignores, is the changing distribution of returns in our economy. There's no point in trying to legislate it away, but more and more work is becoming automated. We're in the middle of a second industrial revolution, and many kinds of work that people rely on for income and identity will go away over time. Will we end up in a society where 90% of us, who don't have the skills to be productive, are subsidized by the remaining 10%? That seems like an awful outcome from a social perspective, but I'm not sure how we should respond to it.

From a policy perspective, I would like to see a higher short-term capital gains rate to limit the attractiveness of financial instrument trading, and I think carry income (on VC and private equity) should be taxed as income, not at the lower rate for capital gains. But apart from those areas, we need to address the long-term trend of growing income inequality as a society, not with legislation.

[yaks_hairbrush]

You get a pretty skewed version of the facts when you talk about income tax shares. Payroll taxes hurt quite a bit at lower income levels.

[mark_l_watson]

Tax all financial transactions: a very small tax, but just enough to keep trading systems that do many transactions quickly become less attractive. I believe that this type of high speed trading does not generate value for society. I am thinking of something similar to proposals that would make people pay $0.000001 per email to make spamming none cost effective.