Thread: An Idiots Guide to Inequality Part 1

exactly, like in China where it just eliminated 40% of the entire world's poverty!!

 

I would opt for a mixed system if there were some solid guarantee that the capitalists would not be able to once again increase their wealth and its control over government so as to seize control once again and bring us right back to this same situation or worse. But that isn't going to happen because it can't. Why? For the following reason...

How do we bring that about? Do we vote in whom we want and will do it for us? Witness the fate of Bernie. Those in power will not allow it to happen. But even if you want to argue that we could do it, how do we assure ourselves the powerful will not just use their trillions to buy off more government (as they have) and end our little experiment?

 

actually Bernie lost because ordinary folks didn't vote for him, not because the people in power( who are they???) didn't vote for him. Thats what Bernie says and yet you have some insane conspiracy theory as if yo know better than Bernie??

 

Yes, it is comparing apples with oranges just because both are fruit ...

 

First of all, capitalism is NOT a political theory or even a notion. Since humans stopped bartering goods amongst ourselves, we created a market-economy in which the means of exchange is "capital" - synonymous with "money" but applied to transactions involving large amounts.

It is perfectly normal, as a means of exchange, that it can be accumulated. We tend to employ it to mean in relation to investment - as in "investment capital". Still, it remains just money nonetheless.

It is the rate of capital accumulation that is, I insist, in question. A highly progressive tax-rate would mean more "capital" is obtained by the government from the upper 10% of the population than the lower 10% of the population. That is just fitting.

I am both a capitalist (since I don't mind using money/capital to pay for my purchases and investments) and a social democrat because I believe taxation should be equitable (but not equal). These notions are perfectly compatible.

What I am not, however, is a believer that taxation of Upper-Income should have a maximum level after which it is constant. And, most berserk of all, is a Tax-Rate fixed at 30% for all income above $100K, when finagling tax deductions brings that tax-rate down to around half that amount. That's not taxation as much as it is tax-avoidance - and we have made it perfectly legal.

Or in the case of the President-elect (who still refuses to divulge his tax-records) a situation where he has not paid any taxes whatsoever since the 1990s. (And in a collective fit of stoopidity we have just made PotUS elect.)

Stoopid is as stoopid does. (Forrest Gump)

 

and, lower class wealth is in form of entitlement streams which are not counted so numbers are 100% bogus. Not to mention business talent like athletic or musical talent tends to favor a tiny group but this is no reason to steal from them but rather to enjoy the life sustaining products of their talent and thank God he sent them to us.

 

Ok, but can you comment on something I actually said?

THAT is a theory. In addition, you're completely wrong. Capital is not "money" when used as a means of exchange. It is only "capital" when it is wealth in the form of money or property, used or accumulated in a business by a person, partnership, or corporation.

Again, you're using the word "capital" incorrectly and, most importantly, your usage serves to obscure and confuse the important features of capital. You render it vague and impotent.

You're kidding!

So you're a "capitalist" if you make purchases? IOW EVERYBODY is a capitalist? That is what you said. See how you are confusing and obscuring reality?

Who can you cite who says taxation should not be equitable? Can you think of anyone?

Ok. Great. This is one thing that is both clear, and we agree on. I'd like to see the top tax bracket set at about $5 million and at 90% or more with other brackets along the way to that $5 million figure.

 

"Wealth"? Really? The lower classes who receive entitlements spend it as fast as the receive it because they must to survive. "Wealth" is an accumulation and they don't accumulate any wealth. It's spent.

 

Put the right policies in place and people will self-deport from their businesses

 

No, a communist does not tax its rich elites. A communist does not believe in private ownership. A communist does not believe in capitalism, in any form.

The trouble with right wingers is that they never got a proper education. Which is why they always play the socialist or communist card. Ha ha ha.

But they are well schooled in straw men and red herrings. For they are forced to use them in order to dodge, duck and feint.

We already have a historical record on what creates large middle classes, what created the American dream, and it ain't got a thing to do with what the right wing believes. We also have a historical record of what increases poverty, shrinks the middle class, kills the American Dream, and that began when we stopped doing what created history's largest middle class, and what gave us the American dream. So we have what worked and what failed. Your way failed, the progressive way worked, and you cannot change history, although your team has tried to do that.

It has boiled down to two choices really. Either you structure an economy to create a large middle class by the elites taking a reasonable profit, or you shrink the middle by allowing the elites to max out profits. The latter is what we have lived under for 30 years and it gave us this election cycle of change.

So we have seen two forms of capitalism from the 20th century to the 21st. One, while not perfect gave us history's largest middle class, and the other one, the current one has devastated average americans as it created an even greater disparity in income than the gilded age. So, there is nothing a right winger has right about economic models. They can only create failures, and should never be listened to seriously. For we can see what their beliefs yield.

 

Inflation has a great deal to do with wealth inequality, while income inequality provides government a source of wealth to easily tax.

I prefer to stick to facts and reality.

I was simply responding to "The situation might be tolerable if a rising tide were lifting all boats. But it’s lifting mostly the yachts." from the OP, and pointing out a fact.

Except for the fact that it is not as simple as you seem to believe. For example, three persons the same age begin working, person "A" starts at $20K per year, person "B" starts at $50K per year, and person "C" starts at $100K per year and each receive an annual 3% raise to compensate for inflation over the next 40 years. Initially the income disparity between "A" and "C" is $80K, but after 40 years it is more than $253K. But I'd like for you to apply simple mathematics and the wealth each of them possesses as they each have now retired.

My "pet-beef"? You respond as though I suggested ALL rules and regulations should be eliminated, which I did not. There are both good and bad rules and regulations. I saw the other day where Trump was going to ask each regulatory agency to list their regulations in order of importance to health and safety, and then work on eliminating any found to be unneeded. Perhaps he should ask each agency to find a way to reduce their budgets by rooting out any waste, which I'm sure there is some to be found in every agencies budget, in order to reduce/eliminate the FY deficit?

While existence results in both needs and wants, I've yet to see a rational case presented entitling one to being provided either beyond their own means of acquiring what is made available in the market place.

Living in Asia, I buy many Chinese manufactured products. My house lighting is all LED, noting that the LEDs are 'designed' in the U.S.A. but produced in China very cheaply and very high quality. I occasionally do a little carpenter work so I buy a Chinese made hammer for less than a dollar knowing it won't last as long as the Stanley I had in the U.S. but I usually just give such things away when I'm done using them.

We seem to be drifting away from inequality, but I've not read "An Idiots Guide to Inequality" so I don't know what it has to say on TTIP or China which would be covered under TPP or TPPA.

 

Sheer nonsense, and of no economic consequence whatsoever ...

Yes, and so? Inequality is the evil-itself, not only aberrational government taxation (in the US) of upper-incomes that is the cause.

Of course, some selfish people cannot even consider that a possibility. (And most of them just elected the worst possible candidate for PotUS.)

That takes clear scrutiny and intelligence regarding the facts, supported by bonafide data and not just spurious sentiment.

Try harder ...

 

What you said was wrong, and I corrected you.

Capitalism is NOT a political theory. It is the heart of any market-economy, thus making of it a "mechanism".

 

Well put, and I insist upon the recent history of taxation in the US, as shown here:
View attachment 46942

Note these historical facts in the above info-graphic:
*JFK prepared a law that would lower upper-income taxation, and it was signed by LBJ. JFK thought evidently that he could "seduce" the American public for his reelection, and evidently LBJ as well. (He was assassinated before he could sign the law, however.)
*It was Reckless Ronnie, however, that took a hatchet to Upper Income taxation during his administration and instituted flat-rate taxation above household income of $100K/year, which
*Prompted the flood of Income up to a select group of American families - as shown by Piketty & Saez (American economists) in this infographic (note specifically the date of 1980, and what happens to upper-income taxation during the Reagan Administration):
View attachment 46943

Which leads me to this infographic below, called the "Gini Coefficient" that measures Income-Inequality in various countries. Note that the US us is the highest o.f all developed nations, and on an equivalence with China. (Look also at the year 1980 and subsequently as the US Gini Index begins its trek upwards.)
View attachment 46944

'Nuff said? Not likely. Still, the above information leads clearly to the notion that upper-income taxation is inherently unfair in the US, and coupled with the finagling of tax-deductions leads to the present state-of-affairs of the American people. (I.e., far too much at the top and far too little at the bottom!)

Which they demonstrated rather stoopidly recently by electing the One Individual who profited most from the upper-income tax-ripoff ...

 

I suggest you look up the definition of the word, for instance from InvestoPedia:

Capital is a measure (in monetary terms) of all assets, and that includes money. My point: It is NOT a political theory in any sense of its many meanings. "Capitalism" is not a political theory. Capitalism a mechanism by which capital is employed within a market-economy that produces goods/services.

The subsequent result of its usage is to produce monetary benefit (Income) by means of the market-economy for both workers and capital-owners. Our present economic plight, however, is that far, far too much of said Income goes only to a select group of individuals due to unfair/unjust upper-income taxation at flat-rates, which by means of finagling perfectly legal tax-deductions allows the effective applied tax-rate of somewhere between 20 and 25%*.

That monetary benefit (called "after-tax Income") becomes Wealth, which is disproportionately shared presently as shown here:
View attachment 46945

That is all I am trying to say ...

*Effective upper-income taxation found here: Income tax in the United States

 

I understand it far better than you.

What's really foolish is to claim that the "only" solution to inequality is some insignificant tweak to the income tax system.

 

Stocks operate more like bitcoin than dollars and cents. Their value for the purposes of these wealth disparity propaganda numbers should be calculated upon the various companies' break up value, not their market numbers.

 

Two persons begin totally equal, working together earning the exact same wage. One purchases a house for $100K, the other rents a little more cheaply than the house payment. They both consume their excess income entirely saving nothing. Forty years later, with inflation averaging about 2% each year they decide to retire and move to Florida. Do you really maintain that inflation has had no economic consequence whatsoever?

There's nothing at all evil about inequality, perhaps you feel that way because you are envious? You obviously view government primarily responsible for protection by providing, which over my 80 years of observation has resulted in a more decadent society.

Thanks for your opinion.

You present statistical data and avoid scrutinization of the data from which it was created. The 90+% MTR for example, how much actual revenue was collected at that rate? Did none look for, and find ways to avoid that rate?

When you feel a need to make accusations, try looking in the mirror first.

 

ECONOMETRIC FACTS

Here's the only data worth considering as regards the distribution of Wealth in America:
View attachment 46961

Derived from here, as the change of Income Taxation instituted by the Reagan Administration in the 1980s clearly shows resulted in a significantly unfair rise in the proportion of Income attained by a select group of Upper-Income families:
View attachment 46962

Because income taxation in the US is wholly unfair - flat-rate taxation above $100K/year earnings is the cause, has been the cause and curse; and it will be yet again for the next four years to come:
View attachment 46963

Blind yourself to these simple economic truths proven from the available data, who otherwise cares? You are one of the many in America who prefer to ignore the Econometric Facts staring them in the face because it suits their petty character.

It has become an ingrained way-of-life ... which is not about economic fairness, but all about da muney ...

 

this is very very true!! the more you make the higher a percentage you pay and the higher amount you pay when out of fairness everyone should pay the same thing just like in a supermarket. When even the tax system is used as a welfare system you merely encourage the lower classes to work less and collect more. Its anti-science and anti- evolution but perfectly liberal.

 

True. Under the current system, the wealthy take far more than they pay for, and working people make up the difference.

Funny how giving a poor homeless man $10 for doing and contributing nothing will make him work less, but giving a rich, greedy parasite $10G for doing and contributing nothing will make him work more....

 

It is absurd to claim that flat rate taxation above $100K/y is the cause of inequality. Privilege is the cause. Tweaking the income tax system, as bad as it is, is not the solution because income is always The Wrong Thing To Tax.

 

Obama solved none of this

 

Initially I created a bar graph from the data provided by the IRS for 2013, but decided to post the numbers instead as shown below.

Income tax collected 2013

Bottom 50% = 2.78% of the total an average of $496.08 per return
50% to 25% = 10.94% of the total an average of $3,898.54 per return or 7.86 times the average bottom 50% return.
25% to 10% = 16.47% of the total an average of $9,781.43 per return or 19.69 times the average bottom 50% return.
10% to 5% = 11.25% of the total an average of $20,044.51 per return or 40.4 times the average bottom 50% return.
5% to 1% = 20.74% of the total an average of $46,188.12 per return or 93.1 times the average bottom 50% return.
Top 1% = 37.80% of the total an average of $336,703.22 per return or 678.72 times the average bottom 50% return.

A total $1,231,911,000,000 of income taxes was paid, or an average of $8,906.68 per return.

Beginning in 1913, passage of the 16th and 17th amendments along with the Federal Reserve Act created the means by which our government was turned upside down, resulting in a gradual reinterpretation of our Constitution into more of a collectivist form of government. That sums up the source of most every problem we face today.

In addition, inequality relative to wealth and income often appear to be thrown about as though they are one and the same. A lower income person can very well accumulate a great deal of wealth over time, while a high income person can, over the same time period accumulate none or even become indebted. Investment, and the stock market, along with our governments need for constant inflation results in a growth of wealth disparity. Think 1 vs 2, doubled to 2 vs 4, doubled to 4 vs 8, etc. You might notice that the difference between the two numbers doubles each time. Think of those holding stock $10,000 vs $1,000,000 and the stock doubles in price resulting in the two owners wealth becoming $20,000 vs $2,000,000 doubling the difference between the value of the two owners.

 

Really useless work/argumentation, and for what purpose?

To "prove" that the three infographics I posted insufficiently depict the awful situation of Income Disparity in America. Piketty and Saez, both recognized economists by their profession "got it all wrong"? My claim that deeply unfair Upper-income Taxation that produced the effect of deeply Unfair Distribution of Wealth is a figment of my imagination?

Along with Domhoff, Piketty & Saez* have duped the American public as regards the matter of both Acute Income and thus Wealth Disparity?

C'mon, now pull the other leg ...

*From which, these excerpts:
-Wealth inequality is always much higher than income inequality (bottom 50% families own about zero wealth)
-Top 10% Pre-tax Income Share in the US in 2012 was NOT 51%? And, thus, the rest of us peons (the "90Percenters") were NOT scrambling after the remaining 49%?