So, I clicked on the link to the study referenced in paragraph two of the article you cited and got this message: "Sorry, the page or file you are looking for was not found (error 404)"
Accordingly I reference the following study: "
The Impact of Inequality on Growth."
The review of the evidence suggests that while some of the traditional channels by which inequality affects growth have solid theoretical backing, empirical evidence is elusive. Intuitive and historically verified growth-accounting methods predict that if inequality, through its impact on diminished educational opportunity, leads to a less-well-educated workforce against a counterfactual with less inequality, growth will be diminished. But for a number of reasons stated in the text, there is no correlation, even with the requisite lags between trends in inequality and trends in labor quality.
Nor is there evidence, at least not a first blush, linking higher levels of income concentration to reduced consumer spending as theories of marginal propensity to consume or save would predict. One explanation for this seeming contradiction, however, is that sharply rising household equity and its wealth effects offset this effect, leading to far stronger consumer demand than would have otherwise prevailed.
The short is that while there are reasons to attenuate income inequality's increase, none of them is macroeconomic. From a policy making standpoint then, the way to address income inequality's impacts is not with economic/fiscal/tax policy but with other policy measures. Those measures need to be things that, rather than making wealthy folks, compared to their current wealth/earnings increase rates, less wealthy/high-earning, facilitate folks who are insufficiently wealthy to enjoy a "decent" lifestyle wealthy/high-enough-earning so they can purchase for themselves a "decent" lifestyle.
Far and away the most efficient and effective ways to do that are (1) boosting access to education and boosting the standards students must meet to earn documents attesting to the nature and extent of educational content they've mastered, and (2) focusing federally funded investments in research of innovative "stuff" that is, in turn, freely shared (save for national security/defense research findings/lessons learned) with private sector innovators and investors who convert the research into productive capacity and jobs for the thus better educated workforce.
I repeat what I've elsewhere stated:
I don't care that my "neighbor" is far wealthier and higher-earning than I. I care that I'm wealthy and high-earning enough to enjoy a decent lifestyle. If my "neighbor" can enjoy a "more decent" lifestyle, well, good for them. That's about their contentment, not mine.
It is with that ethos that I find ridiculous the current nature of rhetoric about income inequality.