John C. Goodman

American Enterprise Institute economist James Pethokoukis:

• People don’t care about inequality. They would rather have opportunity.
• Many extremely useful consumer products exist only because initially there were rich people who could afford them (e.g., automobiles, cell phones, etc.) In time the cost comes down and they are available for everyone. No rich people, no car. No cell phone.
• Economist William Nordhaus has found that innovators (despite their becoming billionaires) only capture a small fraction, 2.2 percent, of the social value created by their technological advances, with the majority of benefits going to consumers.
• There has been no significant increase in inequality of income over the past 40 years.
• There has been no significant increase in inequality of wealth over the last three decades – especially if you include Social Security wealth.

Not to poor people, it turns out.

It goes to landlords, doctors, hospitals, agribusiness, the education industry, etc.

We have 130 to 140 different anti-poverty programs. Of these, 25 are different food programs.

The federal government is spending $1 trillion a year; and states and localities spend $700 to $800 billion.

Here is a Michael Tanner C-Span video. Here is Tanner’s FREOPP study.

Here is an article published in the highly respected Journal of Political Economy. Articles in this journal are peer reviewed by some of the top economists in the country. Although the article itself is gated (you can buy it for $30), the conclusion of the study is publicly available…
Notice that this estimate is very similar to the estimate made by  John Early, Phil Gramm, and Robert Ekelund in their book, The Myth of American inequality: How Government Biases Policy Debate.

Thomas Piketty (Paris School of Economics), Emmanuel Saez (University of California at Berkeley) and Gabriel Zucman (University of California at Berkeley) – herein after PSZ – in a paper called “Rethinking Capital and Wealth Taxation,” advocate taxing billionaires with a progressive wealth tax.
Here is a nontechnical explanation of the issues at Vox.

The official statistics on poverty are notoriously bad, because they undercount income of people on the bottom of the income ladder.

Correcting for unreported income lowers the rate from an official estimate of 11.4% to 5.3%

A much better way to measure poverty is to focus on how much consumption takes place in poor household.

The official child poverty rate in 2022 was 22%. Correcting for actual household consumption, the rate falls to around 7%Source: University of Chicago professor Bruce Meyer before the House Ways and Means Committee.

A 2012 Congressional Budget Office report looking at the example of Pennsylvania, found that unemployed single taxpayers with one child would face an effective marginal tax rate of 47 percent for taking a minimum wage job in 2012, and if their earnings disqualified them from Medicaid, they could have faced an astonishing marginal tax rate of 95 percent. 

This is a potential weakness in all affirmative proposals.

Prior to the War on Poverty (1964), the level of poverty in the US steadily fell as national income rose. However, after the War on Poverty began, the official poverty rate hovered around 13% of the population for the next 60 years.

Writing the Cato journal, James Gwartney and Thomas McCaleb identified four reasons…

• New research by Gerald Auten of the US Treasury Department and David Splinter of the congressional Joint Committee on Taxation finds that the after-tax income share of the top 1% has barely changed since 1962. More.
• Is it true that 1 in 8 American households are so poor that someone must skip a meal each month to get by? No, it is not—the real number is more like 1 in 50. More.
• Biden: The expanded child tax credit “cut child poverty in half in 2021.” Proper modeling:  expanded CTC alone would have reduced the child poverty rate to 8.3 percent in 2021. More.
• The left-leaning Center for Budget Policies says we need housing subsidies because of market failure in the housing market. In fact, public housing subsidies are anti-marriage: Per HUD data, only 3% of subsidized housing serves “two adults with children.”  More.

The Piketty-Saez-Zucman estimates show a substantial increase in the share of national income going to the top 1% of income earners. But these estimates ignore government taxes and transfer payments.

Yet a new study finds that the share of after-tax income earned by the top 1% has not changed since the 1960s.