The pay of corporate executives and financial professionals as evidence of rents in top 1 percent incomes

摘要

The research article discusses the extent and causes of rising inequality of American incomes and wages over the last two decades. The paper first highlights how the increase in the incomes and wages of the top one percent over the last three decades should be seen as driven largely by the creation and/or redistribution of economic rents, and not simply as the outcome of well-functioning competitive markets rewarding skills or productivity based on marginal differences. It has also discussed how rise in incomes at the very top impedes the living standards for low- and moderate-income households approach the growth rate of economy-wide productivity. However, it has been pointed out that checking or reversing the rise through policy measures will have little adverse impact on overall economic growth. Two complementary approaches for policymakers to reverse the rise in the top one percent's share of income has been suggested such as dismantling the institutional sources of their increased ability to channel rents, or reducing the return to this rent-seeking by significantly increasing marginal rates of taxation on high incomes.