New research reveals truth about inequality: When the rich get richer, everyone loses

You made the claim, or inference, that income inequality is causing the rest of us regular folks some kind of problems. I haven't experienced any, personally. What problems have you experienced?

 

Please quote were I said that. Making up (*)(*)(*)(*) is poor form.

What I have said is that the income inequality is hurting the economy. And I've explained why numerous times, including in this thread.

 

Which makes it proportionally smaller than every year Reagan was president except the year he inherited.

That is generally the case when you have a deficit.

We are currently spending less, proportionally than every year Reagan and Bush1 were presidents.

But if you're so concerned about the deficit as you pretend to be, write your Republican Tea Party reps and tell them to compromise with an increase on taxes.

Your just like 99% of the other conservatives. You pretend to be so concerned about the deficit when it politically suits you, but you're unwilling to even think of compromising with a revenue increase. You'd rather run up more debt that increase revenues.

So pardon me if I dismiss your ranting as the partisan inspired blather it appears to be.

If he hadn't cut taxes so much it wouldn't have been as much of an issue.

No liberal would slash taxes for the richest like he did. Sorry.

You were talking about this recovery being anemic compared to earlier ones. I've showed you a big reason why. But Reagan and Bush engaged in what in effect was a massive stimulus programs in the years of their recoveries.

With Obama, thanks to the Republicans, we've had unprecedented austerity.

 

You’re telling me I’m wrong, and I’m telling you that you’re wrong. What’s to get?

I don’t care what most economists say (and you can’t even prove that “MOST economist say…”). I’m absolutely certain whatever economists support our current tax system are liberals and those that don’t are conservative. They have agendas just like any other human.

Please explain to me how raising taxes on anyone is optimal. This is where you and me part… taxes shouldn’t be raised on any to make things ‘optimal’ (I see this as a substitute for ‘fair’). Taxes are collected to pay for government. Government should be SMALL, not massive like we have, thus demanding higher and higher taxes. Reduce the size of government and the subsequent spending and you don’t have to raise taxes on anyone. There should be a FLAT tax that EVERYONE pays into and get rid of the all – ALL – of the deductions. Everyone, as an equal percentage of their income pay the same. That's fair. That's optimal FOR THE PEOPLE. You're talking about what's OPTIMAL for the government. I don't live and die by making the government survive. We aren't here for our government; they are here for US.

We are in a system of where THE PEOPLE can no longer afford the government we are forced to pay into. Making us pay more is not the solution. Reducing the size of government is. If you’re not willing to do this, you can collect every penny of income from the rich and it won’t make a damn bit of difference in government spending. They collect more, they spend more. It never occurs to you liberals to spend less and reduce the burden on the people.

 

Here's a breakdown of income and tax burden:



http://ctj.org/ctjreports/2012/04/who_pays_taxes_in_america.php#.VEhE5BaOoWg

While the federal income tax is fairly progressive (which is why conservatives only refer to it when trying to claim how much of the tax burden the richest bear), when you add in all taxes, the overall tax burden is actually very flat:

The richest pay about the same proportion of taxes as their share of income.

It should be the other way around. The tax structure is now much closer to Forbes' flat tax than a progressive system liberals say is more fair.

You don't run up debt and future taxpayers are not burdened with the costs of our government.

Liberals like to help the poor. Cons like a kick ass military. Old folk like their medicare and SS. It all cost money.

Of course we can afford it. The Govt is spending proportionately less today than every year Reagan was president. If we collected the same proportionate amount as we did in 2000, we'd virtually wipe out the deficit and start shrinking the debt relative to GDP.

 

We are spending insignificantly less than when Obama took office. Spending, as a proportion to production reached a peak in 2009 when Obama took office. I have already admitted to Bush’s destructive spending (I’m making note that a liberal actually sounds like he/she is for less government spending; a new concept in modern politics).

But give credit or blame to the president all you want; it’s congress that holds the purse strings. You libs gave Clinton all the credit for those surpluses accrued under his watch, but ignored that it was a GOP congress in charge of the full congress that handled the spending. And this with lower taxes. Imagine that.

Under Bush, the vast majority of spending increases took place after the democrats took control of congress. There was very little Bush could do. That stupid TARP was the nail in the coffin.

You have to consider who is running congress now and how spending is done. What contributing mostly to the reduced spending are the sequesters – something you liberals claimed was going to cause the country to collapse. Now you’re bragging about it. We couldn’t even get the senate to come up with a budget for almost 5 years of Obamas reign. How do you even account for spending without a budget? It’s an open checkbook. Every budget Obama proposed, EVERY democrat rejected them. So don’t give too much credit to Obama and this current spending. And we haven’t even seen the damage that will be done long after Obama is out of office, and that’s called Obamacare.

In any event, our government is too big. And I will never support increasing taxes on anyone as long as we refuse to reduce the size and scope of government, and as long as I know those increases will only result in increased government.

 

Year - Outlays - % GDP
2009 3,517.7 24.4%
2014 3,499.0 20.0%

We are spending 4.4 percentage points less of GDP. In a $17 trillion GDP that equates to $750 billion lower spending. That level of decline is unprecendented in modern history. By far. Certainly not "insignificant" by any measure I would use.

That is an unprecedented decrease in spending, at the very time the economy was trying to recover from the worst recession in 80 years and strangling from lack of spending.

We only need to cut spending more if your goal is to undermine the economy so you can blaaaaaame Obamaaaaama for it.

Gee, I wonder if anyone has thought of that?

No, it was the Democratic Congress that passed the tax increase in 1993 that flooded the Treasury with revenues and gave us a surplus. The Republicans opposed it right down the line. It meant the richest had to pay a little more, you know.

Just making stuff up as you go along, right? That is absolutely not true.

Year - outlays - % chng
2000 1,789.0 5.1%
2001 1,862.8 4.1%
2002 2,010.9 7.9%
2003 2,159.9 7.4%
2004 2,292.8 6.2%
2005 2,472.0 7.8%
2006 2,655.1 7.4%
2007 2,728.7 2.8% <-Dems take Congress
2008 2,982.5 9.3% <-GR hits
2009 3,517.7 17.9%

Outlays increased 48% from 2000 to 2006. They increased 32% from 2006-'09.

The vast bulk of the spending was when the Republicans controlled Congress, and there was no Great Recession to justify it.

I'm not bragging about it at all. The sequester has hurt the economy. It was a terrible thing.

Not true at all. Without a budget you are limited to prior year spending on non-mandatory items.

So you'd rather run up the debt rather than increase taxes to pay for our government. Good for you. So would just about every other conservative. So what do you want, the medal of honor for passing the buck?

 

I concede it’s relatively flat when considering state and local. But this does not demand taxes be raised on anyone. I fail to see what raising taxes will accomplish. Is there really a problem with the government not taking in enough revenue? If there is, then it’s not a tax problem, it’s a spending problem.

You don't run up debt and future taxpayers are not burdened with the costs of our government.

What runs up debt is out-of-control spending; not a lack of revenues from the people.

And you really believe conservative don’t like helping the poor? Of course conservatives believe you help the poor by teaching them to fish, not just giving them a fish like liberals want to do. Nothing we have been doing has solved poverty. We need to change our thinking on this. If I had it my way I’d force virtually everyone off welfare and invest training programs that get people skilled in a trade/profession. I would pay good money for that. The investment would pay for itself. But liberals love keep people dependent on the government because it’s votes. Liberals like you love the status quo because it feels good; even though it solves nothing.

I would think everyone loves a ‘kick ass military’, especially when we’re at war.

What did old folks ever do before Medicare and SS? How did they ever survive? Can’t you see what government dependence has done to us?

If we are spending less, then why the need to raise taxes? With the massive increased size in government since Bush, I just find it impossible to believe we are spending less – creation of DHS, TARP, Stimulus, Obamacare, etc – and the ever increasing debt is proof. We continue to borrow more and more to supplement the deficit. This is the big deception you libs don’t really want to talk about. It’s easy to pay off one credit card with another and say you’ve paid your bills. Until THAT bill comes in.

 

You&#8217;re comparing a 6 year period with a 2 year period? Really? The 6 year average would be 8% per year. The 2 year average would be 16%; twice as much. Fuzzy-math much?

 

I gave you the total percentage of people's income that goes to taxes.

If you were thinking it was more progressive than that, I suspect you're confusing marginal tax rate with effective tax rate. The marginal tax rate is kind of confusing. Say you have a bracket of $0 - $1000 with a tax rate of 10% and a bracket of $1001 - $2000 with a tax rate of 20%. If somebody makes $2000, they do not pay 20% on that whole $2000, they pay 10% on the first $1000 of it and 20% on the last $1000 of it. So, that would be $100 + $200 = $300. $300 / $2000 = 15%. So, their effective tax rate- the percentage of their total income that went to taxes is 15% but their marginal rate- the amount of taxes taken out of the last dollar they made- is 20%.

Also, you may be just thinking of federal income taxes. Lots of income doesn't get taxed by those rates at all and likewise people are subject to many other taxes. So, you need to add up all the taxes, not just assume that one tells you how much of the tax burden is on who.

Sure. There are certain things that are better accomplished by the public sector and certain things that are better accomplished by the private sector. This is an oversimplification, but you could think of it like if you take all the things that our society wants to do and you split them up into either the public sector bucket or the private sector bucket, the ideal tax rate would be the percentage of all the things our society wants to do that are in the public sector bucket. So, for example, maybe a community has a GDP of $30 million and the $30 million worth of things it most wants are a bridge that costs $10 million and $20 million worth of widgets. Assuming it is better for the public sector to make the bridge and for the private to make the widgets, then you should set the average tax rate at 33%.

Now, as to how to best allocate those taxes among income brackets, more progressive taxation is always better. The main reason is the diminishing marginal utility of wealth. That is the idea that the more money somebody has, the less benefit they get out of it. That should be intuitively obvious. If you only have $100, you spend it on the things you want most badly, then if you get another $100, you spend it on the things you want second most badly. So, you're getting something you want more badly for that first $100.

Another reason progressive taxation is better is that in a capitalist society, wealth tends to become overly concentrated which messes up the economy. When wealth is overly concentrated, regular people don't have much incentive to work hard, regular people don't have good access to the education that maximizes their economic value, your consumer spending falls apart, etc. So, progressive taxation counteracts that to some extent. Basically it keeps us from falling into a situation where people who aren't born rich basically don't have a shot.

The rest of your post strikes me as just you listing off a series of your personal preferences, like you prefer small government and you think flat taxes are good and whatnot, they aren't actual policy arguments as far as I can tell, but if I missed one, definitely point it out to me.

 

In the last 5 years, proportionate to GDP, spending has fallen much faster than revenues have risen. The Govt is spending proportionately less than every year Reagan and Bush1 were in the WH. If we took in the same proportional revenues as in 2000, we'd just about balance the budget.

Sounds like there's a revenue problem to me.

You don't run up debt and future taxpayers are not burdened with the costs of our government.

The ignorance on basic budget issues I see from conservatives is astounding. Rush and Sean are not good economics teachers.

A deficit is the difference between spending and revenues, when revenues are lower than spending. It makes absolutely no sense to say "What runs up debt is out-of-control spending; not a lack of revenues from the people." What runs up the debt are deficits, which are a function of both spending and revenues.

Collecting revenues that are lower than spending runs a deficit just as surely as spending more than the revenues you collect.

Maybe a few do. They seem much more interested in protecting the richest.

Can you name even one thing Republicans have championed over the past 30 years that would benefit the poor over the rich?

The Reagan "trickle down" revolutions hasn't helped. Here's a thought. If you care about the poor so much, why not help the poor instead of pampering the richest?

Most of them died before they had to worry about it.

Because our proportional tax collections are so low.

Absolutely not, see Macroeconomic 101 lesson above.

We continue to borrow more and more because of the deficit. This is the big deception you cons blather about only when a Democrat is in office, but aren't willing to do anything about. It&#8217;s easy to pay off one credit card with another and say you&#8217;ve paid your bills. Until THAT bill comes in.

 

You didn't say anything about an average. Fuzzy memory much?

You said: "Under Bush, the vast majority of spending increases took place after the democrats took control of congress."

Which, as my data proves, is absolutely false. The vast majority of spending under Bush took place before the democrats took control of Congress. And during a time period the economy was not in economic crisis from the Great Recession.

 

So then some really smart guy comes along and says &#8220;Let&#8217;s take 50% of that $10 million and provide money to people that need&#8230;&#8230;&#8230;.. money. THAT&#8217;S what we&#8217;re doing. I&#8217;m all for infrastructure. I&#8217;m all for military. I do believe there are some things that are specifically enumerated in our CONSTITUTION that the government is responsible for. Providing healthcare isn&#8217;t one of them. Providing money to people that need money isn&#8217;t one of them. Collecting taxes for one thing and using it for another&#8230; well I&#8217;m pretty sure our founders never intended for this to happen.

&#8220;To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.&#8221; &#8212; Thomas Jefferson

&#8220;Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.&#8221; &#8212; Thomas Jefferson

&#8220;With respect to the two words &#8216;general welfare,&#8217; I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.&#8221; &#8212; James Madison

&#8220;When the people find that they can vote themselves money, that will herald the end of the republic.&#8221; &#8212; Benjamin Franklin

&#8220;I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it.&#8221; &#8212; Benjamin Franklin

It was never the intent of our founders for government to provide for a level playing field.

 

Well, you're certainly free to have your views on what things we should put in each bucket. You get a vote in that like everybody else.

Except for some very specific examples, like conducting the census and delivering the state of the union and so forth, the Constitution doesn't give the government responsibilities. It gives the government general powers. How the government uses those powers is determined by the democratic process. The people decide.

 

True. But I'm betting that our Soros trolls will disagree.

The inequality that the dems cry about and have no intention of fixing if they could is primarily driven by the 0bama policy of printing fake money that has no place to go other than the stock market. All of the CEOs know that they can't pay their people according to their stock price because the stock prices aren't reflecting the value of the company or the strength of the economy. We are in a world of liberal s**t and the dems don't care because they and government employees are making three times what they are worth if they were actually doing the jobs that they are being paid to do.

 

Is that it?



Who knew Obama took over in 1981 when inequality began skyrocketing.

Conservatives make sense. If you ignore reality.

 

Some of you will love this. Got to admit, great production.

[video=youtube_share;aTOK_3JNfuA]http://youtu.be/aTOK_3JNfuA[/video]

 

Well one thing that is clearly different is that today in most families both parents work. We also have the Internet and video games. All of the listed tend to reduce family interactions, and the coherence and influence of the family on behavior. Society is also more mobile which reduces the feeling of being a member of a larger community for both the children and the parents. There is also declining church attendance which has similar effects.

 

An interesting post. Wonder how the chart would look if it was possible to include all income. As I read their definition of "cash income" it probably doesn't include dividends, stock options, health care, bond income, unrealized capital gains, etc.

 

So, how much of a cap can the gov't place on your earnings?
Maybe when you're in grade school, the gov't can test you and see whether or not they will allow you to attend college?
Maybe you can turn over most of your money to the gov't and let THEM decide how it will be spent?

Oh.......that would be Communist China. So, never mind. We don't do that in the U.S. THANK GOD! Anyone wanting that kind of life should move there.

 

You don't think that is awfully reductive to think about the massive and incredibly varied set of economic systems as a binary "laissez faire capitalism or else it is communism" mindset? After all, every economy in the world falls between those two poles, so if you're trying to analyze economies in that binary modes, you would miss basically all of economics in your analysis. That approach seems kind of like trying to describe a great work of art by only talking about how much red it does or doesn't have in it...