Reports from the Economic Front

a blog by Marty Hart-Landsberg

US Policies Are Relatively Ineffective At Reducing Inequality

Government tax and spending programs can help reduce inequality—unfortunately US policies leave a lot to be desired.

One of the most common measures of income inequality is the gini index.  The index runs from zero to one, with higher values signifying greater inequality.  

The following two charts come from a Christian Science Monitor infographic on myths about inequality. The first shows that while income inequality, as measured by the gini coefficient, is high in the US, it is higher in nine other countries.  

inequality pre government programs

The second shows the degree to which tax and assistance programs do actually lower rates of income inequality.  It also shows that U.S. programs perform relatively poorly; using this adjusted measure, the U.S. trails only Chile for the dubious distinction of having the highest rate of income inequality.

inequality after government programs

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