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April 13, 2014

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Posted: 13 Apr 2014 12:03 AM PDT

'Better Insurance Against Inequality'

Posted: 12 Apr 2014 10:56 AM PDT

Robert Shiller:

Better Insurance Against Inequality: Paying taxes is rarely pleasant, but as April 15 approaches it's worth remembering that our tax system is a progressive one and serves a little-noticed but crucial purpose: It mitigates some of the worst consequences of income inequality. ...
But it's also clear that ... what we have isn't nearly enough. It's time — past time, actually — to tweak the system so that it can respond effectively if income inequality becomes more extreme. ...
In testimony before the Senate Finance Committee last month, [Leonard] Burman proposed a version of inequality indexing that might be politically acceptable... His idea was to integrate inequality indexing with inflation indexing: Instead of just linking tax brackets to inflation..., he proposed that ... if inequality worsened, higher tax brackets would bear a bit more of the burden, and people at the bottom would bear less.
A relatively minor change like this should be politically acceptable. It is a reframing of inflation indexing, which is already a sacrosanct principle, and would be revenue-neutral. ... Such a plan would be a nice first step toward making our tax system manage the risk of future increases in inequality.

I'm a bit more doubtful than he is about the political acceptability of this proposal so long as the GOP is in a position to block any movement in this direction.

'What Money Can't Buy'

Posted: 12 Apr 2014 10:08 AM PDT

I liked this session:

"In recent decades, market values have crowded out non- market norms in almost every aspect of life—medicine, education, government, law, art, sports, even family life and personal relations. Without quite realizing it, we have drifted from having a market economy to being a market society. Is this where we want to be? Should we pay children to read books or to get good grades? Should we allow corporations to pay for the right to pollute the atmosphere? Is it ethical to pay people to test risky new drugs or to donate their organs? What about hiring mercenaries to fight our wars? Auctioning admission to elite universities? Selling citizenship to immi- grants willing to pay? This discussion takes on one of the biggest ethical questions of our time: Is there something wrong with a world in which everything is for sale? And if so, how can we prevent market values from reaching into spheres of life where they don't belong? What are the moral limits of markets?"

  • Introduction: Robert Johnson President, Institute of New Economic Thinking
  • Presenter: Michael Sandel Professor of Government, Harvard University
  • Discussant: Chrystia Freeland Member of the Parliament of Canada, Toronto Centre

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