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I'm not sure why we would assume that distribution of income that currently exists would remain the same should public and private acts that produced unjustified inequality be eliminated. Also, there is a difference between programs designed to reduce inequality and those directed at reducing specific harms from inequality. It is one thing to subsidize health insurance (in which the money goes to the insurer) and another to increase the overall income of the poor.
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The primary objection to inequality is not unjust desert for the wealthy, but the political effects of extreme inequality and the distorted policies to maintain that inequality. Put differently, the billionaire is not begrudged his wealth, but his lobbying for tax shelters that reduce his effective tax rate to levels below those of even the mere millionaire. The ability for someone who can donate hundreds of thousands of dollars to a political campaign to meet senior officials to make his case on an issue is much greater than that of someone who can afford only to donate $5,000. I find it hard to believe that human capital and education can explain either the income or wealth gap between a person at the 95th percentile of income or wealth and one at the 99th. Do we really believe that the top tenth of one percent of income earners hold multiple Phds? To the best of my knowledge, no tertiary education institution has ever conceived of adopting a merit pay scheme for teaching remotely similar to the ones proposed for primary and secondary education: outsourcing the creation of a test to a private testing firm to be given to students upon entering a class and then on leaving the class, without permitting the faculty to ever see the complete version of the test even after all testing is done under threat of publicly announced dismissal for cause should they obtain it, and using the difference in scores to allocate merit pay.
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Feb 14, 2013