Is economic inequality, as President Barack Obama said, the defining challenge of our time?

Is the wealth gap, as Bernie Sanders said, one of the great moral, economic, and political crises

that we face? And must we, as Vice President Kamala Harris said, rise to meet this moment

as we face a dramatic rise in inequality?

The left, as you can see, has no doubts about this issue. It's a huge problem. Or is it?

Consider this thought experiment. Jeff and Bill work for a well-run, innovative steel manufacturer.

Let's call it Acme Steel. Jeff is a factory floor

manager and makes $150,000 a year. Bill works in the plant and makes $50,000 a year. The government

decides to reduce taxes and regulations on the steel industry. Acme's profits soar. Bill gets a raise and is now making $62,500.

Jeff gets a raise, too, and is now making $200,000 a year. They're both better off.

But their income gap has widened. Someone tell Bernie. What would the income inequality crowd

propose to correct this new injustice? They'd likely say

we should redistribute more wealth from higher earners like Jeff to lower earners like Bill.

That might be fine for Bill in the short term, but in the long run it spells trouble.

Redistribution, code word for higher taxes, discourages the creation and growth of businesses.

I recently studied the 2012 tax increases on high-income earners in California.

I found that these increases have backfired.

High earners today in California, in addition to a 37% federal income tax, pay a 14.4% state income tax.

These people can do the math.

Many have decided that doing business in California isn't worth it, and some leave the

state altogether.

The upshot?

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