CQ Researcher released its latest report “Inequality in America: Can the Growing Wealth Gap Be Closed?” featuring an interview with Ed Conard.
Excerpts from the report:
On incentivizing risk-taking to grow the economy:
Edward Conard, a visiting scholar at the conservative-leaning American Enterprise Institute (AEI), calls the wealth gap an inevitable byproduct of an economy that prospers by rewarding innovators and risk-takers.
Before the coronavirus struck, the United States had enjoyed a strong economy with low unemployment rates and rising wages. After an 11-year bull market, the Dow Jones Industrial Average hit a record high of 29,551 on Feb. 12.
“You want people to take risks and work very hard and produce the kinds of innovate on that grows the economy,” Conard says. Because Americans are rewarded for doing so, he adds, “we have been way more successful [than other countries] at motivating our talent to take entrepreneurial risks.”
On Sen. Sanders’ and Warren’s tax proposals:
Critics also argue Sanders’ and Warren’s taxes would damage the economy.
“A tax on success,” the American Enterprise Institute’s Conard says, would discourage the innovative work of entrepreneurs
who create wealth for the entire society, not just for themselves. “Entrepreneurs capture a small fraction of the value they create,” he argues. Taxation is not the best way to “extract value from that talent,” he says. “The way is to motivate them to create a dollar for themselves in order to create five for everybody else.”
A wealth tax “won’t blow up Silicon Valley,” Conard says, “but you probably will slow growth.”
On Sen. Warren’s and Sanders’ free college tuition proposal:
Making something free usually is a bad idea, the American Enterprise Institute’s Conard says. “We see in health care that a little bit of co-pay makes resources be better rationally allocated.”
On the political pressure to reduce inequality:
The American Enterprise Institute’s Conard says he fears political pressure to act on inequality will lead to slower growth and less innovation. “I think there’s political will building for such liberal proposals as tax the rich,” he says.
On big tech’s contribution to inequality:
Edward Conard, a visiting scholar at the conservative-leaning American Enterprise Institute, says a hands-off approach enables innovators to prosper and the economy to remain strong.
You can read the full CQ Researcher report “Inequality in America: Can the Growing Wealth Gap Be Closed?” here.