From The Washington Post
Tax Reform Has the Greatest Potential To Narrow the Gap

By Sebastian Mallaby

By now almost everyone agrees that inequality is serious. Economic growth no longer seems to help the majority of workers; the proceeds flow to the top fifth or so of the workforce, and the top within the top has done especially handsomely. But the tough debate is what to do about this trend. The surprising answer is: tax reform.

Start with a few other proposals. Trade protection could help workers in the heavily traded manufacturing sector by shielding them from competitive pressure on their wages. But the cost to economic growth would be severe, and even if you don’t care about growth, protectionism is a blunt tool for reducing inequality. Many of the poorest U.S. workers are employed in non-traded service jobs — hotel workers, retail workers and so on. These workers benefit from trade, which puts little downward pressure on their wages but a lot of downward pressure on the price of goods they purchase.

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