Daily Wire Editor-at-Large Josh Hammer and Dallas-based hedge fund manager Todd J. Stein have the following piece today at Fortune magazine.
Income inequality in America has worsened in recent decades. Many on the left, buttressed by a not-insignificant number of those on the right, have argued for an increasingly progressive income tax code to tackle this problem.
But they’re focusing on the wrong solution—instead, the target ought to be the Federal Reserve. While the central bank chose to not change interest rates this week, the Fed’s ceaseless quantitative easing programs and obstinate commitment to unnaturally low interest rates in the years following the 2008 financial crisis have had the unintended effects of both incentivizing reckless deficit-driven spending from Congress and exacerbating income and wealth inequality in the private sector.
Simply raising taxes on individuals is not going to fix the underlying issue. A tax hike would only continue the status quo in exchange for a higher “toll” from the well-connected. In addition, it would disincentivize the entrepreneurship and innovation that drives the American economy.
Fixating on taxes ignores this fundamental truth: The totality of the Fed’s post-2008 actions has resulted in a historic regressive wealth transfer from the less well-off to the well-off.