This presentation was delivered to the Tax Section of the New York State Bar Association in January 2020. It first briefly reviews important current tax policy issues, and shows that the income tax has plenty of headroom to accommodate higher tax revenues: “Personal Income,” the government’s broadest measure of household income, is $6 trillion higher than aggregate Adjusted Gross Incomes.
The presentation then pulls back its focus to poverty and middle class life. It argues that education is the engine of economic opportunity, but the United States dishonors the principle of equality of opportunity by its unique reliance on private (family) resources to fund education, particularly among the very young and post-secondary students. Doing more is feasible: the United States is a low-tax country to start, and investment in education yields “inclusive growth.” Efficiency concerns are systematically overstated in many instances, because those analyses do not consider the returns on government investment in education and other programs financed by taxes. Taxes may be carried in leaky buckets, but even a leaky bucket can put out a fire.
Finally, the presentation pulls back still further to consider how one might reframe these issues around a unifying theme. It argues that existential bad luck — particularly, bad luck in the wealth of one’s parents — casts a disproportionately long shadow on American lives, and that insurance — understood as both product and metaphor — is the unifying theme that can tie together our responses. In this, the presentation hints at the agenda of my forthcoming book, What’s Luck Got To Do With It?
Law | Law and Economics | Law and Society | Tax Law
Date of this Version
Edward D. Kleinbard, "From Tax Policy to Social Insurance" (January 2020). University of Southern California Legal Studies Working Paper Series. Working Paper 312.