Commentary

The Blue-State Path to Inequality
States That Emphasize Redistribution Above Growth Have a Wider Gap Between Lower and Higher Incomes.


     
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For those in Washington obsessed with reducing income inequality, the standard prescription involves raising taxes on the well-to-do, increasing the minimum wage, and generally expanding government benefits—the policies characterizing liberal, blue-state governance. If only America took a more “progressive” approach, the thinking goes, leaving behind conservative, red-state priorities like keeping taxes low and encouraging business, fairness would sprout across the land.

Among the problems with that view, one is particularly surprising: The income gap between rich and poor tends to be wider in blue states than in red states. Our state-by-state analysis finds that the more liberal states whose policies are supposed to promote fairness have a bigger gap between higher and lower incomes than do states that have more conservative, pro-growth policies.

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Richard K. Vedder is a Senior Fellow at the Independent Institute, Distinguished Professor of Economics at Ohio University, and co-author (with Lowell Gallaway) of the award-winning Institute book, Out of Work: Unemployment and Government in Twentieth-Century America.

Stephen Moore is Chief Economist at the Heritage Foundation.


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