OT: Income Inequality

38 comments

• motorhead

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  9 years ago

  BagBoy James < Me < farmerart
• GACA

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  9 years ago

  It doesn't take a lot of talent, focus, or hard work for the people in the 1% (hell maybe even 5%) to live off their grandpa's dedication and hard work, and now only have to sit back and collect earnings, which are taxed less than the payroll. I'm thinking that's what is upsetting people. A) Also bullshit on people with talent finding away. Yes there are NBA and NFL players who make it out of the shitty environment, but those are kids who's parents could still afford to sign them up for team sports. Who could a ford the occasional snacks. There are a lot more kids who parents couldn't and never got a chance to develop the sporting talent. Inner city public schools are a fckn joke, most of them won't develop any academic talent, so the only talent left is to be a rap star or criminal Unfortunately opportunity cost money. And lots if it. Opportunity isn't free. It isn't always super expensive either, but it's never free. Cost of gas, computer, and all the shit most of us take for granted. And Talent is only as good as the opportunity you get to display it. B) yes it's something even people in the middle class care about C) higher estate tax for starters, raise capital gains so that it is more than the payroll, D) we are still living in a feudal like system where lineage is a stronger factor in individual success. It's isn't about who's smarter focused and more talented, it's about who can buy what opportunities for themselves and family.
• sharkhunter

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  9 years ago

  She wants to raise taxes on everyone while claiming to help the middle class. She'll probably start off on taxes that only affect the rich if she's smart, no guarantee there, then hit the middle class with extra taxes. It's what the democrats do. Raise taxes so that they can spend more of our money or give more of it away. She might want to pass some special taxes. I heard there is no tax in place to breathe the air. Oh wait, Obama passed along a clean air bill to the EPA so everyone will pay that tax with higher electric bills. Hillary might enact a decree stating everyone must pay hundreds of dollars a month to pay for national daycare to help make up for the pay gap they have been harping about that they claim is a lot bigger than it is.
• sharkhunter

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  9 years ago

  Basically when a politician talks about income inequality, they want to take more of your income and claim they are equalizing it and then they will only give a tiny fraction of it back. How would you like it if the government just confiscated all income above $80,000 and shared it with everyone making less minus a one trillion government processing fee? Governments should stay away from too much taxation in my opinion.
• Josh43

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  9 years ago

  I like GACA's comment that lineage is the strongest factor in determining your individual success. The heart and soul of the income inequality debate is this sensational book by Piketty called "Capital in the 21st Century." There are summaries of the book all over the web. The basic idea is that when return on capital exceeds the growth rate, there's nothing to stop runaway wealth inequality. If that wealth is passed on to heirs, you end up with society that resembles 18-th century Europe with a few families controlling most of the wealth (think of the Waltons and the Kochs). Does anyone know where Hillary stands on income inequality? It would be nice if she would come out with some sort of white paper, but winning elections depends more on producing vapid sound bites and commercials. At least the GOP has the Paul Ryan budget. their manifesto for totally trashing Obamacare, gutting Medicaid, turning Medicare into a voucher system, cutting taxes on the wealthy, while raising the Pentagon budget. You can bet there will be major differences between Hillary and the GOP agenda. Dougster called Hillary a "dipshit" in an earlier thread and she does tend to make stupid, unforced, mistakes. Part of the problem is that she was raised in a very wealthy GOP family and didn't become a Dem until her college years(Liz didn't become a Dem until age 50). Maybe that's why she sounds "synthetic" and insincere. My gut feeling is that she does care about working class mobility, but who knows. Still Hillary has a great resume (first lady, sec of state, senator, terrific lawyer) and she's no dipshit. She has 20 yrs of experience putting up with GOP horseshit, which will make her better than Obama at handling a GOP-controlled Congress. Is this something people really care about? The average working stiff struggles to get by paycheck to paycheck. Most people don't have the luxury and the time to think about political issues; it's a miracle just to get them to vote, and Hillary will win if she can simply fight the apathy. What can be done inequality? As @Rockstar has been saying, pumping up the marginal tax rate to Reagan or even Eisenhower levels would most likely eliminate grotesque pay for CEOs and supermanagers (most blind sheep don't understand what the word "marginal" means in marginal tax rate). Putting some sort of tax on wealth is probably necessary, too. We could do that and still produce the next Gates or Zuckerberg. That's all utopian shit and will never happen with Hillary or anyone else. Good post, Dougster. It must be interesting living in the financial center of the universe, but you should get off your high horse now and then.
• londonguy

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  9 years ago

  Is she really going to run, I thought the Clintons were well known for pulling out at the last minute :-) ?
• jackslash

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  9 years ago

  Absolute equality of income would be bad because the lazy and stupid would get the same reward as the hard-working and intelligent, who would soon learn to stop working hard and smart. But large income inequality is also bad. Because of differences in family wealth, people do not all start from the same point. Children of the rich have better opportunities for education and for obtaining jobs through their families and old boy networks. More talented but less connected people are crowded out. Inherited wealth also rewards people without regard to work or talent. Over many generations, wealth becomes more concentrated among a small group of people, and they will use their wealth to pass laws and regulations that favor their position. Think of the French aristocracy that did not pay any taxes before the French revolution. American democracy, I think, needs ways to keep income inequality within bounds. Free public education has been one way we've done this, and perhaps free education should now be extended to college. Graduated income tax and inheritance tax also help to reduce inequality. But maybe it's too late. The rich control both political parties, and the politicians give the rich special treatment for such things as capital gains, dividends and carried interest. Politicians care less about voters than contributors. We are in the last days of the Roman Republic.
• motorhead

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  9 years ago

  The $15 minimum wage has been in the news a lot. I don't know if Hillary has endorsed this, but if she does, she has Bag Boy James' vote.
• EarlTee

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  9 years ago

  GACAclub is absolutely right on. I know lots of middle class people (like me) who hate that the gap between rich and poor has grown so enormous. I think the CEO-to-peon pay ratio is now 273-1, and a lot of those suits don't do anything but move pieces around the chess board and collect their bonuses. The richest .0001% of Americans have more wealth than the bottom 50% -- don't tell me they "earned" it in any traditional sense of that word.
• GACA

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  9 years ago

  It's sickening to try a shove the prevailing "boot strap" myth down people's throats when clearly all one needs is to be born to the right family. Not to say people who make the effort won't have huge success. Thinking of people like Kanye, Jay Z, P. Diddy, mostly entertainers come to mind, but this amounts to winning the lottery. The truth is we have taken away real competition so that a few have the greatest advantage.
• GACA

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  9 years ago

  JS69 for Prez : "Use it or loose it / Spend before the end" platform. That would keep the economy going strong, and have the effect of people actually having to work for their better life and not live off great grand papi's effort.
• gawker

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  9 years ago

  Reading the comments above made me think of my ATF. As a 15 year old school dropout she quickly got hooked on heroin and has been a stripper/addict for almost 15 years. She's working hard at staying sober but frankly is as dumb as a bag of hammers. She got a GED in one of her 20 trips to rehab, but frankly the only sale able skills which she possesses are stripping and blowjobs.. She says stripping is not an option because it's an environment where she'll keep being tempted by drugs. What are her chances of ever making a middle class living? The streets are filled with people like her - unskilled, uneducated, and having lived a life where food stamps, welfare, and public assistance are the norm. Has she made bad choices? Sure. However in the past, even semi-skilled workers could " move up the ladder". The rungs are much higher now.
• JamesSD

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  9 years ago

  we lack equality of educational access in the US. If you want your kids to have quality education, you either go private or go to a school in a rich nneighborhood that can subsidize educational with fundraisers. We generally have equality of opportunity in the US. Most big companies are relatively color, gender and orientation blind. Until we have true equality of access and opportunity, the bootstrap myth is a myth. In the short run we can bring back the Reagan era tax rates. If it was good enough for Saint Ronnie. It's good enough for me. Make corporations and the wealthy pay for the foreign wars they benefit most from.
• Dougster

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  9 years ago

  I definitely think capital gains and dividends need to be taxed much less than income earned through work or no risk interest. There are a couple of reasons for this: The first is that capital gains and dividends are generally dependent on the income a corporation earns which is already taxed at hefty rates. If capital gains and dividends were additionally taxed at more than ordinary income rates it would be a very bad case of double taxation. It would highly discourage people from creating corporation and seeking investments in the first place, which I believe is one of Americans advantages over the rest of the world: the extent to which our workers have greater ownership of the means of production through stock ownership. Besides that disadvantage it would diminish the entrepreneur spirit which I am really happy to see kicking in amongst my millennial friends and some ex-coworkers. I think that would have detrimental effects on society beyond just slower rates of technological growth and lower overall wealth. I would also argue that even if you completely ignored the double taxation issue - you would still want to tax capital gains and dividends at a lower rate than ordinary income due to the risk people who earn income that way take on. I think people just look at it from the notion of "fairness": Hey, I bust my back digging holes in the ground three quarters of the day and then filling them back up the other quarter, and you tell me that someone who just decides where to investment money and let's other do the back breaking work will have a lower tax rate than me? Well first of all, if you look at effective tax rates it does go up relative to income, so the hole digger/filler is probably paying a lower rate despite his complaints. If you also look at the benefits received from the government versus taxes paid, it's not until you get to the top quintile that they are paying for everyone else (only the top quintile is a net contributor). So already there seems fairness there, even ignoring risk. Analyzing the whole topic of risks shows why it is necessary for some in our system to be allowed to reap enormous rewards for the enormous risks they take. In the end a huge percentage of these highly successful folks just end up giving back to charity in the end too, so it's not like they want feudalism any more than anyone else. As far as estate taxes: Milton Friedman said it best. Most people are motivated to not to do what is best for themselves but what is best for their families. This creates a couple of problems with trying to "prohibit" inheritance. First off, you can bet your ass that people would do whatever it took to try and work around this - make sure their heirs get the money before the person dies, or set up trust to avoid any death taxes. Even if you could somehow think of a way to prevent this - you take away the major incentive that drives most people - to make a better life for the generations of their family to follow. Take that away and I think you would see many more "living large"/playboy lifestyles. Is that really in society's interest?
• Dougster

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  9 years ago

  @JamesSD: I don't know. I'm neither from a rich family nor did I go to a private university. A big name college doesn't mean alot to me. I routinely give "no" hiring decision to PhDs from Ivy League schools - sometime after only 30 minutes of talking to them. It's not an automatic disqualification either: I'll hire them if they are good. At the same time if someone is better qualified and their education is "just" from a city college/university, that doesn't matter to me either: I'll pick them over the ivy league PhD without a second thought. PhD's and Ivy League diplomas are a dime a dozen these days. Some of them are good. Many are not. It's a complete no factor to me.
• GACA

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  9 years ago

  ^^^@Dougster I think what you are failing to acknowledge (in a big fckn way) is if I'm earning a lot of money in my life time, my children already benefit from what I can provide them in for of opportunities. I can send them to a great private school, trips to Europe, space camp etc.. So even if I would not be able to afford these privileges to my great grand children through inheritance I could still spend what I have earned in my life time on my children and great grand chidren. For the most part people are driven to procreate, so this motivation of taking care of family will always be in place individual inheritance or not. Actually it would keep all people the sense of urgency to do what they can in this life for their family, and not just sit back and wait till mommy or grandma dies so they can cash in. 2nd I agree that the risk involved in investment should be rewarded, but as it stands now the only people the people who benefit the most from it aren't really taking risks. If I lose $100k on an investment I'm fucked. No so for the person who has inherited millions. That same $100k is one night out at a SC. In effect they are no longer being rewarded for high risk, but rewarded because they can afford to take loss.
• tumblingdice

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  9 years ago

  Hahahaha.
• GACA

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  9 years ago

  Sorry this is a sour point for me. I've seen way to many talented, hard working and intelligent poor people fall by the way side. It takes an exceptional person, no, an extremely exceptional person to succeed when so much is stacked against them. Poor people have to suffer through bad neighborhood shit (like getting robbed or beaten just because). If you are in a ghetto area, just like crabs in a bucket, people do try to hold you down. They don't have the insight or connections middle class and up have. Poor people aren't just rich people without money. It's an emotionally exhausting experience where every moment is a fckn struggle to survive. Then on top of it we have a system in place to largely keep it that way. So yes income inequality is a sour point. And when I think about the poverty line? $24k foe a family of four? Who the fck could live on their own with just a measly $24k. I make atrip least four times that much, and I don't think I could afford a family. Unless we put a system in place where poor people can't have children, so there is a new generation of people to exploit, then we are still being inhumane as a country.
• Dougster

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  9 years ago

  GAC: " Actually it would keep all people the sense of urgency to do what they can in this life for their family" Of course they. Which is why it would be so hard to implement. Do you make a limit on gifts to family members? Disallow trusts for them? Forbid business partnerships amongst family members? Don't allow people to hire family members? All of the above? Buy real estate or other hard assets for them? How does it even get implemented? I agree there is a certain culture to poverty which is self-perpetuating - which is why I think throwing money at
• Dougster

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  9 years ago

  One income level would have its limits. Increasing the overall wealth and doing what it takes to achieve that is the best solution, IMO.
• GACA

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  9 years ago

  Ya first of all no trusts. That is just a way to hide money. Money should work like energy, you shouldn't be able to store enough for generations to come, but just enough for power failures (ie retirement ). As long as energy is in constant movement we have a powerful system. I don't mind the hiring of family or even buying family gift (cars, investment in business etc) as long as it's not property. Also real estate property should not be allowed to move from one generation unless auctioned off in a market. Samething for heirlooms and jewelry. We can say it a double tax buy it would pay for defense and infrastructure. I'm still sketch on paying into unions. Education would have to be reformed; maybe make teachers elected position and pay them handsomely. Educating our youth is the greatest civil service after all. We have a lease on life it's not permanent. There for I think we should incorporate the "leasing of property and capital " Then you could get rid of taxes period. People who want to succeed would have to do it generation after generation and not live off the luck or hard work if the previous.
• Dougster

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  9 years ago

  Curious: how strong is the evidence of a correlation between teacher salaries and student achievement? I'm inclined to believe Edward Gibbon thoughts on the matter: "But the power of instruction is seldom of much efficacy, except in those happy dispositions where it is almost superfluous." Certainly I never thought teachers were of much help too anyone once they know how to open a book and read.
• GACA

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  9 years ago

  ^^^ I find it very hard to believe that a person with an upper educational experience (college and Grad school I'm guessing ) doesn't have a handful of examples where the instructor or teacher helped with their understanding in a complex subject matter.
• GACA

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  9 years ago

  ...and if you are quite the Einstein, then please try to have some empathy for the 99.9% of the rest of us dummies.
• Dougster

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  9 years ago

  I'm not saying that other people don't learn that way it's just something I never understood: if I can read something in a book why do I need a teacher to stand in front of me and say what's in the book? I wonde why they think everyone needs to learn I this way? Have they ever done experiments to see what % would be better off just learning from reading books? In general I' with Carl Rogers and successors who think children need to be given more autonomy in their learning, I also wonder the studies say about correlations between teacher salary and achievement or are we just to assume that there should be a strong one because it feels right?
• GACA

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  9 years ago

  Teacher salaries have little correlation with success, one only look to LAUSD failures to make this observation. But I think this has more to do with teacher unions. There are seven types of intelligences based on one school of thought, unfortunately because we must have a minimum understanding of reading writing and arithmetic, total autonomy in elementary education is not a viable option, all the kids would stay in their coloring books. I have seen a shift to 4th and 5th graders having options on picking elective courses. We know that highly motivated educators have a strong influence on children and the opposite is true for discouraging educators. We want to throw money and prestige and education because only then will you get truly talented and motivated individuals and not the almost college drop out who took a job in babysitting that we have now
• Dougster

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  9 years ago

  Ok, I think we are finally converging on some agreement now. I think the current educational system is doing little to help anyone. More individualized approaches to learning is required. Each child is an individual and need a learning program setup up especially for them. And it especially needs to take their own interests into stronger account much earlier on. I would say that even if something like that cost five or ten times what it costs now it, it would be worth it, and I would support doing whatever it took to raise the money to pay for such program (even making the Koch Brothers pay 100% of the cost).
• Dougster

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  9 years ago

  Maybe 10x is a bit high, but 5x seems reasonable. Send the bill directly to the Koch Brothers. :-)
• GACA

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  9 years ago

  :)
• gawker

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  9 years ago

  I just read that the House of Reps has passed a bill eliminating the inheritance tax (estimated at $269 Billion over the next 10 years). This impacts those estates over $5,000,000 which is just the top 0.2% of the American population. Realistically this will not be used to reduce the deficit or to rebuild the country's bridges &roads or whatever. I worked 50 years in education and am a proponent of "learning by doing". When I studied calculus it was an exercise in memorization and using a slide rule. It meant nothing to me. I recently watched an 11th grade student tracking the rate of change of a sine wave on an oscilloscope using calculus. So much more effective. I've seen superb teachers in "poor schools" in southern Alabama and very poor teachers in wealthy school districts from Fresno to Calgary. At the secondary level effective teachers help their students read for understanding, think critically, conduct research, and use logical thinking ( a rare commodity in strip clubs)
• GACA

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  9 years ago

  @gawker ... 50 years, wow! !! Wondering how many budding strippers you had the privilege of educating. And could you tell which ones were going to eventually go into that profession. And have you ever run into a former student. God, no wonder why you have the best stripper stories. Practically farming them (OK that was a joke that might have gone a little too far)
• Dougster

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  9 years ago

  Now that's something I'd like to see the statistics on. Evidence that there is a great difference in results from teacher to teacher. I suspect by secondary it's far too late: their motivation, attitudes and personality are pretty set it stone by families and peers already. If there is any time to reach them got to think it's before around age 12. Make them motivated independent individual learner by then and I bet you taper it off after that - since they be motivated and know how to go about o their own. Right now people don't really get that opportunity until graduate school. Completely broken model, in my view.
• jabthehut

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  9 years ago

  I believe the income equality about which the woman who won't give her husband a simple BBBJ is talking is the inequality in pay between men and women. What most of you are talking about is wealth redistribution that has seen a big push since 1/20/09.
• GACA

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  9 years ago

  ^^^ Ya similar to the wealth redistribution of 1776
• Josh43

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  9 years ago

  " I routinely give "no" hiring decision to PhDs from Ivy League schools - sometime after only 30 minutes of talking to them." --------------------------------- Ha! Good for you! Those damn elitist Ivy PhDs who don't know their head from their asshole. Only the best and brightest for the financial services industries, I say. Their loss, too, because after 5 yrs of slave labor producing a thesis, most of em want to work for TUSCL's leading troll.
• Dougster

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  9 years ago

  It's okay they can still go on to write The Democratic Party Line so guys like Josh know exactly what to think on the issues. :-)
• Tiredtraveler

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  9 years ago

  Just how stupid does that cunt think we are? The bullshit about the estate taxes only hitting the ultra wealthy is a lie promulgated by the politicians and the ultra wealthy. The ultra wealthy don't pay inheritance taxes because they can afford to shelter their money. The ones "living off grandpa's money" don't pay because they are the very ones promoting tax increases. They have gone into politics because they do not have to work!! and want to protect the family fortunes through cronyism. Most of the families that are decimated by the death tax are small businesses and farmers. That means they are FIRST generation money!!!!!!!!!!!! The advocates of the death tax are people like the Kennedys, John Kerry etc. They are old big money that is virtually tax exempt. The Bill Gates types that promote it even though he made his money by stealing other people's ideas has set up foundations with his money that are tax free that his beneficiaries have lifetime highly paid no work required employment on the board as will their descendants. The myth that the estate tax only hit the very wealthy is a bald face elitist lie. We are the only first world country with a death tax! The local paper had the story of a local father son excavating business that was expanding with the mid 20's sons (who had worked for his father but had recently become his partner) and they were barely paying each other a salary and pumping very dollar back into the business to buy equipment so they were cash poor. The son had recently gotten married and had a child on the way when his parents were killed in a car wreck. The IRS came in and valued the business based on replacement cost of the machinery and the son ended up owing millions in death taxes forcing him to liquidate the entire business including his parents house, car etc. and he now works for someone else and the 6 other people they had working for them are now without a well paying job. The 20+ years the father had put into building his business plus the years the son had put in where they worked for less per hour than their employees (because of the number of hours they put in to build and maintain the business) was all gone because of the greed of the "YOU DID NOT BUILD THAT" leaches in DC!!! The paper ask the son if he would try to rebuild and his answer was "Why? they will just take it again". The government produces nothing it only consumes what others produce. I personally am very tired of government charity. When the government holds a gun to my head and tells me you will give your money to so I can pay my buddy to give your money to that guy over there to stay home all day, drink, do drugs and fuck to make more of the same so more of my buddies (who I pay more than you make) can be paid to give more of your money away to more lazy drug addicted persons who screw their day away make more lazy drug addicts to take even more of you money. That is not charity. Charity is giving your money willingly to a group that helps people who need help and does not have an agenda to gain power. The government does not give a shit about the poor, they want them to stay poor because they are the democrat power base. Dependent under educated who have been convinced by the bureaucrats that they can't succeed without the government where the opposite is actually true... it is actually virtually impossible to succeed when the government is involved. Every success story in the last 50 years has been a product or service that the government had yet to regulate or tax. Computers, internet (amazon etc.), I pods, and once the government gets its hooks into an industry it ceases to innovate nor be healthy (witness housing and autos) only when deregulation occurs can growth happen. Government is a cancer that only can be pushed into remission and never cured but if left on its own will kill the patient(nation). Thomas Jefferson said: When the people fear the government you have tyranny When the government fears the people your have liberty How many of you can say you do not live in fear of the government! I do: I afraid I might not have documented something properly to the irs. or the city will decide to sell my house to a developer to build a mall and give me peanuts for it claiming it is for the greater good of the city (happens all the time especially in the east).
• crazyjoe

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  9 years ago

  This is why I shit at McD