Question

Although US is the largest economy in the world, some says it is one of the worst income inequal countries among the industrialized countries and Income inequality in US is not improving.

Q) Is any better idea of government policy over this matter? Does the new Trump Tax cut make income inequality worse?

Wish the answered to be by your own,

Answer 1

Q) Is any better idea of government policy over this matter? Does the new Trump Tax cut make income inequality worse?

Income inequality is a serious problem in the United States as much as it is in the developing counterparts. It basically refers to the difference in the quality of living and the amount of money which is generated by the rich and the poor in a country.

Post 1970's due to the rise of developing economies and because of the fact that they offer cheaper labor and better prices, most companies within the United States are shifting their production bases to other countries such as China and India to ensure that the cost of production is relatively lower.

While this has some advantages for the overall consumer the problem of Income Inequality is hot debated and is true to a certain extent. In countries like India, people might think that their counterparts in the United States are paid more, but that isn't necessarily true.

The difference in prices of goods and commodities in developing countries and the United States of most goods is more of a disadvantage than adding any benefit for the usual workers. Thus is it is relatively correct to say, that in the United States while the rich have benefitted from being able to produce their products at a relatively lower price, the working class has suffered because of reduced employment opportunity.

Does the new Trump Tax cut make income inequality worse?

While the Trump Administration has taken key steps to ensure that their products are not heavily taxed in other countries to protect the interests of those that work in the country, still the tax rate cuts have not gone down well with the working population.

The tax reductions aimed to reduce the net tax payable by the wealthy people which they said would induce investment in the country and would help in correcting market sentiment.

In this, though the tax rate meant that the government made significantly lesser money which was earlier spent on activities that helped in equal distribution, what has happened today is that rate cuts have led to investment in stock by the rich, than in increasing production activities or reducing the prices of products.

In my opinion therefore, the recent tax reductions for the elite class is more of a bummer than not. It has cause wide spread rage among the working population which still pays highest taxes when compared to the income which they earn.

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