"Result 1: There is [no] statistical difference on the individual that different political 
                    parties represent once in power, although in some regressions this difference is large. 
                    Result 2: Politicians have maximized the happiness of richer individuals during the 
                    period of study. 
                    Result 3: Increases in the percentage of rents paid as wages and salaries, and the 
                    level of affiliation to labor unions are correlated with governments that maximize the 
                    happiness of poorer individuals" (CITYPERC 13)".

"Even if the paper is able to show the huge democratic deficits of developed 
countries, it fails in explaining the circumstances that have provoked this situation. It is true 
that the coefficients of the regression COMP-4 are compatible with the theses of some 
authors, but unfortunately, the coefficients just show correlation between y* and macro 
variables, not the direction of the causality" (15).

Krugman argues against the idea that the very rich make a special contribution to the economy as "job creators." Few are new economy innovators like Steve Jobs, a recent analysis found that 43% of the top 0.1 percent to be executives at nonfinancial companies, 18% in finance, and another 12% are lawyers or in real estate. Commenting on the ongoing economic crisis he writes, "[the] seemingly high returns before the crisis simply reflected increased risk-taking — risk that was mostly borne not by the wheeler-dealers themselves but either by naïve investors or by taxpayers, who ended up holding the bag when it all went wrong".[33] In general, empirical researches have shown the accuracy of this slogan [We are the 99% {?}].[75] (Source).

Proposed policy responses[edit]Further information: Welfare's effect on poverty
Proposed public policy responses addressing causes and deleterious effects of income inequality include: progressive tax incidence adjustments, strengthening social safety net provisions such as Aid to Families with Dependent Children, welfare, the food stamp program, Social Security,Medicare, and Medicaid, increasing and reforming higher education subsidies, increasing infrastructure spending, and placing limits on and taxing rent-seeking.[321]

Increase public spending and expand welfare state[edit]The OECD asserts that public spending is vital in reducing the ever expanding wealth gap.[59]

Lane Kenworthy advocates incremental reforms to the U.S. welfare state in the direction of the Nordic social democratic model, thereby increasing economic security and equal opportunity.[322] Currently, the U.S. has the weakest social safety net of all developed nations.[323][324]

Raise taxes on the wealthy[edit]CBO reported that less progressive tax and transfer policies contributed to an increase in after-tax income inequality between 1979 and 2007.[113] This indicates that more progressive income tax policies (e.g., higher income taxes on the wealthy and a higher earned-income tax credit) would reduce after-tax income inequality.

The economists Emmanuel Saez and Thomas Piketty recommend much higher top marginal tax rates on the wealthy, up to 50 percent, or 70 percent or even 90 percent.[325] Ralph Nader, Jeffrey Sachs, the United Front Against Austerity, among others, call for a financial transactions tax(also known as the Robin Hood tax) to bolster the social safety net and the public sector.[326][327][328]

The Pew Center reported in January 2014 that 54% of Americans supported raising taxes on the wealthy and corporations to expand aid to the poor. By party, 29% of Republicans and 75% of Democrats supported this action.[277]

Raise the minimum wage[edit]In his 2013 State of the Union address, Barack Obama highlighted the need to raise the federal minimum wage. The progressive economic think tank the Economic Policy Institute agrees with this position, stating: "Raising the minimum wage would help reverse the ongoing erosion of wages that has contributed significantly to growing income inequality."[329] In response to the fast-food worker strikes of 2013, Labor Secretary Thomas Perez said that it was another sign of the need to raise the minimum wage for all workers: "It's important to hear that voice... For all too many people working minimum wage jobs, the rungs on the ladder of opportunity are feeling further and further apart."[330]

The Economist wrote in December 2013: "A minimum wage, providing it is not set too high, could thus boost pay with no ill effects on jobs....America's federal minimum wage, at 38% of median income, is one of the rich world's lowest. Some studies find no harm to employment from federal of state minimum wages, others see a small one, but none finds any serious damage."[331]

The U.S. minimum wage was last raised to $7.25 per hour in July 2009.[332] As of December 2013, there were 21 states with minimum wages above the Federal minimum, with the State of Washington the highest at $9.32. Ten states index their minimum wage to inflation.[333]

The Pew Center reported in January 2014 that 73% of Americans supported raising the minimum wage from $7.25 to $10.10 per hour. By party, 53% of Republicans and 90% of Democrats favored this action.[277] Also in January 2014, six hundred economists sent the President and Congress a letter urging for a minimum wage hike to $10.10 an hour by 2016.[334]

Implement a maximum wage[edit]Amalgamated Transit Union international president Lawrence J. Hanley has called for a maximum wage law, which "would limit the amount of compensation an employer could receive to a specified multiple of the wage earned by his or her lowest paid employees."[335] CEO pay at the largest 350 U.S. companies was 20 times the average worker pay in 1965; 58 times in 1989 and 273 times in 2012.[336]

Subsidies and income guarantees[edit]Others argue for a Basic income guarantee, ranging from civil rights leader Martin Luther King, Jr.[337] to libertarians such as Milton Friedman (in the form of negative income tax),[338] Robert Anton Wilson,[339] Gary Johnson (In the form of the fair tax "prebate") and Charles Murray[340] to theGreen Party.[341]

Limit rent seeking[edit]General limitations on and taxation of rent-seeking is popular with large segments of both Republicans and Democrats.[342]

Expand "economic democracy"[edit]The economists Richard D. Wolff and Gar Alperovitz claim that greater economic equality could be achieved by extending democracy into the economic sphere.[343][344] In an essay for Harper's Magazine, investigative journalist Erik Reece argues that "With the political right entrenched in its opposition to unions, worker-owned cooperatives represent a less divisive yet more radical model for returning wealth to the workers who earned it."[345]