OT: Income Inequality
Dougster
a) what exactly is the problem? I've had friends across all income levels and there is not a single case where I knew someone who had the talent but won't have been able to find away to develop those talents due to financial reasons. IME, the opportunities are there are already for people who need help and are motivated.
b) is this something people really care about? Or is it just something they say they do because it is fashionable to say so? They want to be seen as being on the side of the White Knights of Justice.
c) Supposing there really is a problem, what do they want done about? And how big a gap will there be between what they say they want done (to win votes) versus what they actually do?
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BagBoy James < Me < farmerart
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.
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.
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.
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.
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.
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.
However in the past, even semi-skilled workers could " move up the ladder". The rungs are much higher now.
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.
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?
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.
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.
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
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.
"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.
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?
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
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)
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)
What most of you are talking about is wealth redistribution that has seen a big push since 1/20/09.
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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.
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).