Income Inequality - Problem or not?

[mileslunn]

In your country, describe if income inequality is a problem or not, why so.  And if a problem what are the solutions you think your government should take to lower it. 

For mine, which is Canada, I think it is an issue, but not nearly as bad as many make it out to be.  We live right next door to US where it is really bad so many tend to import solutions for an American rather than Canadian problem.  Still a few things can and should be done.

-  Increase housing supply, in particular look to convert offices to condos and apartments as more work remotely to bring down housing prices which are way too high

-  Eliminate deductions that primarily benefit wealthy and serve no purpose in enhancing economic growth.

-  Introduce an inheritance tax of 40% on inheritances over $5 million excluding family farms.  Canada is only G7 without one.

-  Allow First Nations greater control over resources as well as keeping revenue from development to improve standard of living

-  More funding for skills training, especially blue collar communities who are hardest hit by automation

Now policies to avoid

-  Higher top rates, Canada's top marginal rates are over 50% in 8 out of 10 provinces and just below in other two so if anything already too high.  Pushing higher may lower inequality but just drive talent out making use worse off.

-  Wealth tax - very bureaucratic and again just drives talent out while doesn't reduce inequality

-  Fund new programs through economic growth and cutting ineffective ones, not higher taxes or deficits (deficits just hurt poor most when austerity implemented to tame it).