The importance of redistribution

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Larry Summers, former US Secretary of the Treasury, has given an interview to International Economy. He said:

If the income distribution in the United States were the same today as it was in 1979, the bottom 80 percent of the population would have about $670 billion more, or about $8,000 per family. And the top one percent would have about $670 billion less, or about $500,000 per family. Relative to numbers like that, a $3 billion trade adjustment assistance program looks very small.

We need to think in a much more comprehensive way about income distribution, the progressivity of taxation, the enforcement of tax laws, and the benefits of public spending if we're going to maintain broad support for the legitimacy of the system including the ability to maintain open markets.

Hear, hear.