Income inequality not necessarily a bad thing

OBSESSING over income inequality has become a persistent tic of political liberals. Left unsaid in their critiques is that many people at the lower end of the income ladder have benefited immensely from the business decisions of those at the top. And there’s a connection between providing mass benefit and achieving immense wealth.

That point becomes obvious when you reference “Billionaire Bonanza 2017: The Forbes 400 and the Rest of Us,” published by the Institute for Policy Studies. In a post touting the report, authors Chuck Collins and Josh Hoxie bemoan their conclusion that “the rich are getting richer.”

“Just three people — Jeff Bezos, Bill Gates, and Warren Buffet — own more wealth than the bottom half of the country combined,” Collins and Hoxie write.

Bezos founded Amazon. Gates created Microsoft. Millions of people have benefited from those two companies’ innovations. A recent analysis by Slice Intelligence concluded that 43 percent of all online retail sales in the United States in 2016 occurred through Amazon.

When one can provide a service that is eagerly embraced by millions, the financial reward for doing so will be much higher than when your customer base numbers in the thousands or hundreds. There’s nothing wrong with that.

The innovations of Bezos and Gates have allowed people of modest means to stretch their dollars further, increase efficiency and ultimately raise their standard of living. That’s a good thing. So what if Bezos and Gates became fabulously wealthy in the process? If you doubt it, ask the average person if they’re willing to give up Amazon purchases and pay more for goods elsewhere in the name of reducing income inequality.

It’s also notable that Bezos, Gates and Buffet are singled out for criticism by those on the political left, because all three men are left-leaning and have long championed various liberal policies and candidates. If they were hoping to buy indulgences from the church of liberalism by doing so, it appears the gambit failed.

Collins’ and Hoxie’s proposed response to income inequality involves higher income taxes, estate taxes, capital gains taxes and more. Yet they simultaneously decry “wealth hidden in offshore bank accounts and secrecy jurisdictions” and “trillions in wealth buried in complicated and opaque trust mechanisms.”

Increasing tax rates only boosts the incentive for use of such tax-avoidance measures. Tax simplification efforts, which Collins and Hoxie oppose, would make it more likely that wealth remains in the U.S. economy instead of diverted to tax loopholes.

Former President Barack Obama once declared inequality was the “defining challenge of our time,” and he constantly promoted and enacted higher tax rates. Yet after eight years of that administration’s economic policies, the far-left Mother Jones magazine had to tacitly criticize the outcomes generated. In December 2016, during Obama’s final weeks in office, Mother Jones published an article bluntly headlined, “11 Charts That Show Income Inequality Isn’t Getting Better Anytime Soon.”

The free-market economy is built on a foundation of free people freely engaging in mutually beneficial transactions. It’s a model that works, and one that shouldn’t be abandoned merely because some citizens are able to earn more — in some cases far more — than others.