Are We Headed For A Permanently Divided Society?

This article makes the point that the redistribution of income through tax policy will not fix the problems of income and political inequality. Children from low income families have a low probability of escaping the poverty trap. Furthermore growth in inequality results in the growth of political inequality. This implies that government will be biased in the direction of responding to the needs of those with more political power.

I agree with the proposition that income inequality is related to political inequality. We will continue to have a polarized political economy as long as income inequality is an issue. We are experiencing that today. Most of the political debate is about the role of government in dealing with lower economic growth and the share of income that is going to those at the very top of the pyramid. Conservatives complain about class warfare and so do liberals. How could it be otherwise. There must at least two sides to any kind of warfare. On the other hand, tax policy is one of the few alternatives available to government to address income inequality. We are in for a long period of political polarization. Unfortunately, political polarization will limit the ability of government deal with a multiplicity of difficult problems. Gridlock in government is bad for everyone. Unless government is able to focus on the national interest, as opposed to political interest, we will be overwhelmed by problems beyond income inequality.