If we as a nation are truly interested in reducing inequality in America, there are some very immediate steps we could take to put a serious dent in the problem. If we're serious.
- Punitive marginal tax rates. Back in the day, we had very high marginal tax rates (up to 90% on unearned income at times). There were lots of loopholes, for sure, but it really put a damper on super high salaries. Marilyn Monroe lived in, like, an apartment and Joe Dimaggio lived in a nice house. If either Marilyn or Joe were alive today, they'd be making $30 million a year, minimum. But back then, you didn't get to keep much of your income over $100k. Even CEO's of major corporations made around $5 million in today's dollars - good coin but what a run-of-the-mill senior VP makes today.
- Import Restrictions. Lots of the big bucks today are earned as bonuses when corporate executives off-shore jobs. So we not only have the big bonuses but also the unemployed workers who almost certainly will never get jobs as good as the one they lost. If we were to charge import duties with the intent of equalizing the cost of doing business abroad with that of the U.S., there would be a lot more people working for a lot better pay. Of course people's standard of living would also take a hit due to flat-screen TV's now costing $66 an inch rather than $33, but that's the tradeoff.
- Immigration Restriction. This is a no-brainer, yet is the least mentioned solution to the inequality crisis. Immigrants tend to be either low-skilled workers who decimate salaries at the lower end, or semi-skilled professionals who put a damper on the aspirations of the middle class. And then there's the small % of immigrants who become filthy rich - doing nothing really that special - how does that help the situation?
- Aggressive Anti-Trust enforcement. As little as the above are discussed, this one is really off the radar. But this was a powerful tool a century ago to reduce inequality. I don't know about Berkshire-Hathaway, but surely Facebook, Microsoft, Amazon and Google should at least be under investigation for engaging in restraints of trade.