Thursday, March 08, 2007

CCPA skullduggery

I'm sorry I missed this from last week. Andrew Coyne dismembers the latest CCPA opus...

Final point. All of the above figures are for pre-tax incomes, before the tax-and-transfer system goes to work. What do the figures show after tax? They show the system redistributes more from rich to poor than ever before. The richest 10% of families earned 31 times as much as the poorest 10% before tax in 1976; by 2004, they were earning nearly 82 times as much. But after tax, the ratio barely moved: from 8.1 to 9.9. Put another way, the tax system compressed the earnings gap by a factor of 4 in 1976. In 2004, it was working twice as hard, compressing the earnings gap to less than one-eighth its pre-tax ratio.

This is a remarkable finding. If there is one thing the CCPA believes to its soul, it is that the last three decades have been pretty much one long neo-conservative nightmare of deregulation, free trade, tax cuts and the like. Yet their own figures show the system has grown more redistributive, not less, in that time. You’d think that would have been the headline.

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