what could we do about income inequality?
There are all of the problems with measuring income inequality.
And let's note that most of those who profess concern also support a president who talks about it while his statistical record on the topic is woeful. Love that.
Beyond these things, there's the question of what we can do about it.
I think my ideas on school reform would be quite helpful over the long-term. But at least among those who profess concern about income inequality (II), they disagree and have nothing significant to propose instead. They're fans of the status quo.
Family structure/stability is a big player-- directly and indirectly-- but how we get the toothpaste back in that tube, esp. with public policy? The government stoked whatever cultural influences we had-- with policies that subsidized these problems. It's difficult to imagine welfare reform that would address this. Even so, how do you reverse the damage? The only thing I can imagine is spiritual revival.
Increasing the MW is always a popular prescription-- and would help a bit, by definition, with II among the employed. But for an II stat that includes the unemployed, the impact is at best mixed and nominal-- and might well be negative.
More tax and spend on the poor? Are we using pre-tax or post-tax / pre-transfer or post-transfer calculations of II this time? (Oh, you forgot to think about that? Don't worry, it's quite common to commit that sin of omission!) Even assuming "post", it's a mixed bag for *measured* II.
Caps on CEO compensation could help on the top end. But the last time we did that, it led circuitously to our current health care/insurance debacle. Well done, good intentions!