OMB Director Peter Orszag gives a shout out to Emmanuel Saez, who just won the prestigious John Bates Clark Medal, which is awarded to the best American economist under 40. Two things stand out. First, income inequality has been growing rapidly since the late 1970s, and those whose incomes place them in the top 10 percent now earn 50 percent of our national income, a share even higher than the previous record -- which occurred on the brink of the Great Depression.
Emmanuel's work on income inequality has helped to point the way for the Administration in its pledge to rebalance the tax code, with a tax cut going to 95 percent of working Americans while asking those at the very top to contribute more. The inequality that has arisen over the past three decades is not going to go away overnight, and it has been driven by many factors—including a decline in the growth rate of college-educated workers. But where the prior administration used changes in the tax code to exacerbate these trends, this Administration thinks that the tax code should be used to mitigate them because an economy in which all can enjoy success is one that is strong for us all.