Prof. Isberg: Taxes Get the Attention, But the Fed Dominates Our Economy
November 27, 2017
Contact: Office of Government and Public Affairs
In an op-ed in The Baltimore Sun, Steve Isberg, associate professor in the University of Baltimore's Merrick School of Business, writes that the attention paid to proposed federal tax legislation far outweighs that given to the recent nomination of Jerome Powell to serve as head of the Federal Reserve. The irony, Isberg writes, is that the Fed has a much greater impact on Americans' economic potential.
"Regardless of who's been in charge, Fed policy over the past 45 years has contributed to a redistribution of income and wealth unparalleled in the history of peaceful democracies," Isberg says. "Since the end of the gold standard, the income share lost by the middle 60 percent of the population has been gained by the top 5 percent."
Those top earners, he says, stand to gain heartily from the tax reform bill now being crafted in Congress.
"Under the Republican proposal, the wealthy and corporations get most of the breaks, while the rest of us will be stretched to pay for them," Isberg writes. "Consider those households in the 80-95 percent range of earners. While their share of income has not changed, the adverse impact of Republican tax shifting will fall disproportionately on them. They will pay more taxes, period. And if the earnings of the middle 60 percent grow, their net gains will be minimized as they move into higher tax brackets. That's the lock—a permanent income advantage, much greater for the top 1 percent rather than the top 5 percent."
Read the op-ed in The Baltimore Sun.