tax inequality

Ian Ayres, a professor of law at Yale, and Aaron S. Edlin, a professor of law and economics at UC Berkeley have an interesting idea on how to "to end the continued erosion of economic equality in our nation" with a "tax that would limit the after-tax incomes of this club to 36 times the median household income":

Don’t Tax the Rich. Tax Inequality Itself.

I'd certainly support something like this — with the caveat that the revenue generated from this new tax be expressly allocated to social welfare programs like food stamps, low-income housing, Medicaid, Pell grants, and unemployment insurance — especially in combination with a modest 0.25% tax on stock trades and a 0.02% tax on the purchase of credit default swaps (raising an estimated $100-150 billion per year according to economists Dean Baker, Robert Pollin, and Marc Schaberg), and getting rid of the Bush tax cuts (netting an additional $72 billion per year according to Citizens for Tax Justice).

All these things together in conjunction with targeted spending cuts not only have the potential to help limit the rising rate of income inequality, but to help reduce the deficit that everyone's been squawking so much about recently, as well.