For all the disastrousness of the current recession in the developed world, examined more broadly the early twenty-first century has been one of the greatest times to be alive in the history of mankind. The cause is the enormous improvement in living standards of the people in China, India, Brazil and other large developing nations. On the moral balance sheet, this betterment of some of the globe’s poorest people more than outweighs the continued stagnation of middle-class wages in the United States.
But the fact remains that here, in what’s still the wealthiest large nation on earth, things have not been improving in a nearly commensurate manner. And yet it’s not as if global economic growth has passed the country by. Instead, a wildly disproportionate share of the material gains of recent technological progress and economic globalization has been captured by a tiny, already rich slice of the population. The causes of this are complicated and controversial, and the solutions can be complicated if we want; but they can also be simple—the government can and should deploy its tax authority to capture a larger share of this wealth and spend it on useful services for the broad public.
Higher taxes to finance more and better public services is not the only conceivable method of curbing inequality, but it is the best one because it directly tackles the most objectionable aspect of high inequality in the economy—its tendency to perpetuate itself in the form of unequal access to basic social goods and unequal access to opportunities in the next generation.
The goal should be a country where every neighborhood features safe, well-paved streets, excellent schools, functioning mass transit and a healthy environment. Families should have equal access to medical treatment if they fall ill, to preschool and to decent nutrition for their children, and to a secure retirement after a few decades in the workforce. Those with skills that are more highly valued in the marketplace would still have fancier cars, larger televisions, more upscale clothing. But the main conditions for human flourishing would be available across the board, and no family would need to worry that broadening America’s circle of social and economic opportunity by allowing foreigners to move here or sell goods across national borders imperils their fundamental interests.
To get from here to there is going to be a difficult task in a country where the public is averse to any increase in taxation on the nonrich and where elites are equally hostile to the hiking of taxes on the wealthiest. Ultimately, doing some of both will be essential. That’s because it’s important to conceive of future expansion in public services in terms similar to those of our existing and highly successful insurance programs for retirees, Social Security and Medicare. These programs are redistributive in their impact, guaranteeing for all things that the rich could afford on their own, but they’re not narrow antipoverty efforts, nor are they targeted giveaways. Instead, the idea is that everyone pays a share and everyone gets to participate in the benefits. This invests middle-class and even wealthy people in the notion of ensuring the quality of services and shifts the conversation away from the concept of "handouts."