Steven Rattner
May 15, 2014
Addressing Income Inequality
2
3
Piketty’s Important New Book
4
Instant Bestseller
Source: NY Times best sellers list May 11, 2014
5
But Weighty and Complex
Trends in Income and Wealthy Inequality
6
19.3%
4.1%
18.0%
2.8%
%
Note: Excludes capital gains
Source: Emmanuel Saez, Thomas Piketty
Income Inequality in the US
7
Wealth Is More Unequal Than Income
Source: Thomas Piketty
33.8%
17.4%
8
Source: Thomas Piketty
The Super Rich Have Gained the Most
Decomposing the Top 1%
1%-0.5% 0.5%-0.1% 0.1%-0.01%
0.01%
9
US Leads in Income Inequality
Note: As of 2010
Source: Thomas Piketty
10
Income Inequality: US vs. Europe
Source: Thomas Piketty
14.7%
17.4%
8.8%
6.9%
11
Wealth Inequality: US vs. Europe
Source: Thomas Piketty
33.8%
28.0%
24.4%
20.7%
12
State of the Middle Class
13
US Middle Class Is Losing Its Lead…
Note: As of 2010
Source: NY Times, Luxembourg Income Study Analysis
14
…And Is No Longer World’s Richest
Note: As of 2010
Source: NY Times, Luxembourg Income Study Analysis
15
Causes and Consequences
16
Causes
 Principal causes:
 Technology
 Globalization
 Secondary causes:
 “Winners-take-all” labor markets
 Tax polic...
Skills Matter
Source: Bureau of Labor Statistics
18
Impact of Globalization
Source: Bureau of Labor Statistics
Change in Wages by Sector (Jun-09 to Apr-14)
19
Lower Tax Rates, Higher Inequality
Note: Change in top income shares and top marginal tax rates since 1960
Source: Emmanue...
US Does Less to Redistribute Income
Source: Janet Gornick, Luxembourg Income Study
21
Source: IRS
Average Tax Rate for the Richest 400
19.91%
1997 (Clinton cuts):
- Lowered cap gains
tax from 28% to 20%
- Low...
Inequality Associated with Immobility
Source: Alan Krueger’s Great Gatsby Curve, Corak (2011), CEA estimates
23
But Mobility Has Not Changed Over Time
Source: “Equality of Opportunity Project” by Raj Chetty , Nathaniel Hendren, Patric...
Source: Andrew Berg and Jonathan D. Ostry, IMF
More Inequality May Mean Less Growth
25
More Inequality May Mean Less Growth
26
Source: Andrew Berg and Jonathan D. Ostry, IMF
Source: OECD Income Distribution and Poverty Database, OECD Economic Outlook Database
Or It May Not
27
Solutions
28
Solutions
 Education / retraining / vocational training
 More progressive tax policies
 Increased Federal investment sp...
To End On An Optimistic Note
30
Global Income Growth
1988 - 2008
Source: Branko Milanovic. Annotations by James Plunkett.
31
of 31

Naf inequality steve_rattner

Published on: Mar 3, 2016
Published in: Technology      Economy & Finance      
Source: www.slideshare.net


Transcripts - Naf inequality steve_rattner

  • 1. Steven Rattner May 15, 2014 Addressing Income Inequality
  • 2. 2
  • 3. 3 Piketty’s Important New Book
  • 4. 4 Instant Bestseller Source: NY Times best sellers list May 11, 2014
  • 5. 5 But Weighty and Complex
  • 6. Trends in Income and Wealthy Inequality 6
  • 7. 19.3% 4.1% 18.0% 2.8% % Note: Excludes capital gains Source: Emmanuel Saez, Thomas Piketty Income Inequality in the US 7
  • 8. Wealth Is More Unequal Than Income Source: Thomas Piketty 33.8% 17.4% 8
  • 9. Source: Thomas Piketty The Super Rich Have Gained the Most Decomposing the Top 1% 1%-0.5% 0.5%-0.1% 0.1%-0.01% 0.01% 9
  • 10. US Leads in Income Inequality Note: As of 2010 Source: Thomas Piketty 10
  • 11. Income Inequality: US vs. Europe Source: Thomas Piketty 14.7% 17.4% 8.8% 6.9% 11
  • 12. Wealth Inequality: US vs. Europe Source: Thomas Piketty 33.8% 28.0% 24.4% 20.7% 12
  • 13. State of the Middle Class 13
  • 14. US Middle Class Is Losing Its Lead… Note: As of 2010 Source: NY Times, Luxembourg Income Study Analysis 14
  • 15. …And Is No Longer World’s Richest Note: As of 2010 Source: NY Times, Luxembourg Income Study Analysis 15
  • 16. Causes and Consequences 16
  • 17. Causes  Principal causes:  Technology  Globalization  Secondary causes:  “Winners-take-all” labor markets  Tax policy  Declining unionization 17
  • 18. Skills Matter Source: Bureau of Labor Statistics 18
  • 19. Impact of Globalization Source: Bureau of Labor Statistics Change in Wages by Sector (Jun-09 to Apr-14) 19
  • 20. Lower Tax Rates, Higher Inequality Note: Change in top income shares and top marginal tax rates since 1960 Source: Emmanuel Saez, Thomas Piketty 20
  • 21. US Does Less to Redistribute Income Source: Janet Gornick, Luxembourg Income Study 21
  • 22. Source: IRS Average Tax Rate for the Richest 400 19.91% 1997 (Clinton cuts): - Lowered cap gains tax from 28% to 20% - Lowered 15% tax bracket to 10% 2003 (Bush cuts): - Lowered cap gains tax from 20% to 15% - Lowered dividends tax from 35% to 15% 2001 (Bush cuts): - Lowered tax brackets from 15%, 28, 31, 36, and 39.6 to 10%, 15, 25, 28, 33, and 35 1993 (Clinton hikes): - Created 36% and 39.6% tax brackets for the richest 1.2% - Created a 35% tax rate for corporations
  • 23. Inequality Associated with Immobility Source: Alan Krueger’s Great Gatsby Curve, Corak (2011), CEA estimates 23
  • 24. But Mobility Has Not Changed Over Time Source: “Equality of Opportunity Project” by Raj Chetty , Nathaniel Hendren, Patrick Kline, Emmanuel Saez and Nicholas Turner 24
  • 25. Source: Andrew Berg and Jonathan D. Ostry, IMF More Inequality May Mean Less Growth 25
  • 26. More Inequality May Mean Less Growth 26 Source: Andrew Berg and Jonathan D. Ostry, IMF
  • 27. Source: OECD Income Distribution and Poverty Database, OECD Economic Outlook Database Or It May Not 27
  • 28. Solutions 28
  • 29. Solutions  Education / retraining / vocational training  More progressive tax policies  Increased Federal investment spending (R&D, infrastructure etc.)  Enhanced social welfare programs  Fair (but free) trade 29
  • 30. To End On An Optimistic Note 30
  • 31. Global Income Growth 1988 - 2008 Source: Branko Milanovic. Annotations by James Plunkett. 31

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