GII Insights

Restoring Progressivity in an Age of Extreme Concentration**

Markets have extraordinary power. In the United States, they have fueled two centuries of innovation, raised productivity to historic heights, and helped create one of the world’s most dynamic economies.

In every modern economy, markets may generate activity, but governments create the conditions under which those markets function. This is not an ideological claim—it is a structural fact. As Joseph Stiglitz writes, “In a modern economy government sets and enforces the rules of the game—what is fair competition… what is fraudulent… who gets what in the event of bankruptcy.” These rules are not neutral. They determine power, shape incentives, and ultimately distribute opportunity.

If governments design the rules of the market, tax systems are among the most powerful rules they write. A tax code is never just about revenue; it is a moral architecture that communicates who contributes, who benefits, and how a society understands fairness. And history shows that when the United States took this architecture seriously, inequality shrank.

A fair tax system is one of the most powerful tools a democracy has for shaping opportunity. It funds public schools, infrastructure, healthcare, and the social foundations that allow citizens to lead dignified lives. But in the United States, that architecture of fairness has quietly inverted. Today, the workers who earn the least often contribute more of their income in taxes than those at the very top.

In debates about inequality, the United States often imagines itself as constrained—unable to raise wages too quickly, unable to lighten the tax burden on workers, unable to build a more equitable labor market. Yet other advanced economies have chosen a different path. France is one of the clearest examples.

In American debates about inequality, billionaires are often positioned as opponents of progressive taxation—symbols of a system that rewards concentration rather than contribution. But sometimes the loudest warnings come from inside the very class that benefits the most. Bill Gates’s recent interview with The New York Times offers one such moment of clarity.

The United States has always tolerated inequality. But today’s inequality no longer resembles a simple income gap; it has become a structural divide—an economy playing on two entirely different screens. On one screen, wealth accumulates at a scale unprecedented in modern history. On the other, millions of Americans struggle to secure housing, pay medical bills, and cover basic needs.

How the United States Drifted Into an Unequal Economy**