Income Inequality Overstated, Sudy Says.

In Canada income inequality has increased however the concern is overstated.  A new study by the University of Calgary’s School of Public Policy says that the income inequality issue has not taken into account taxation and redistribution.  According to the study the long term growth of inequality has been offset by the scale of income redistribution and growth in income overall.  From 1976 -2008 Income inequality has it record highs at the same time average household income also hit record levels of $63,500.  The study also found that inequality was much lower after taxes and transfers due to a graduated tax system and social benefits for the lowest income earners.  Stephen Richardson The author of the studies argues that “measuring only the amount of income inequality for a given population has limited use in public policy discussion.”  The OECD says the redistribution is less efficient drop from 70 per cent offset to 40 percent from the mid 1990’s to today.

I agree and disagree with Richardson.  Redistribution threw taxation definitely helps with the growing income inequality however it is not a problem that can simply be offset by some income redistribution.  I would like to know who was included in the statistics of their average household income, because if it included every household the average could be increasing because of the extreme growth of the extreme rich.  After taxes income inequality is much lower but how much lower is the question.  The OECD says that the tax-benefits system has become less efficient in offsetting the income inequality over the last 15 years and inequality is still growing then maybe the Inequality is not overstated. 

http://www.cbc.ca/news/business/story/2012/02/09/inequality-gap-study.html