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Too Hot for TED: Income Inequality

nationaljournal.com

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Re: Too Hot for TED: Income Inequality

#181

Post by bsphil »

sukuriant wrote: post #173
aliston wrote: post #86

Earlier quoted context omitted.

In addition, the point at which the top tax rate kicks in has varied quite a bit throughout the 1900's. For instance, in the 1950's, when we had a top marginal tax rates over 90%, the top bracket also kicked in at 400k, which would be nearly 4 million in todays dollars. That's why merely looking at the top marginal rate is kind of misleading. http://ntu.org/tax-basics/history-of-federal-individual-1.ht...

90% of the top bracket..? That seems like honest robbery to me, like saying "I'm sorry. You're not allowed to make a lot of money. The government needs this money."

Only if you think people paid all of it without writing anything off.

Re: Too Hot for TED: Income Inequality

#182

Post by confluence »

Relevant answer I found on Quora: http://www.quora.com/Who-creates-wealth-Entrepreneurs-invest...

The world is more complex than a lot of the arguments that people have on this issue.

One side appears quite facile and naive in their hero worship of entrepreneurs/investors at seeing/creating the future (when the chances are they merely bump into it along with many others).

These are almost universally young people who are nurtured/protected by their families/society or already successful people who think they are the sole cause of their success (it's usually a combination of internal AND external factors).

The other side is too oppressive and cynical, stating that entrepreneurs don't create jobs, but extract wealth. These are usually unprotected people, the poor, and the unsuccessful who just don't understand why they are trodden upon and treated like vermin to be ignored.

The world isn't black or white. It looks like it is extraordinary complex with many shades of gray.

Hence the best way to look at this issue is thus: If you were the down trodden upon, the poor, the unlucky, the unhealthy - How would you like the tax system to treat you?

Would you like them to say:

No, your situation is ALL your fault - the rich matter, we shouldn't tax them and let them create jobs for little all you.

OR

Yes, the rich are extraordinarily lucky to have what they have, and it would be best to share that around.

Because as you all know: You had a 50% chance of being born in the rest of the world, in the darkest poverty, where nothing you did, said, or who you are meant anything because of your situation.

Born in America: Billionaire.

Born in Afghanistan: Your dead.

What you can achieve has doesn't correlate strongly with what actually happens to you - you are made by your situation.

We float with the times and environment around us - not the other way around.

Re: Too Hot for TED: Income Inequality

#183

Post by bluedanieru »

ry0ohki wrote: post #141
georgieporgie wrote: post #122

Earlier quoted context omitted.

So is this the basic issue, then? That there's income inequality? No, not at all. Who have you ever heard make such a claim? The issue is the size of the inequality, its growth , and the fact that historical periods with less inequality and a stronger middle class seem to correlate with strong overall growth and prosperity.

I don't understand why the size of inequality matters. If I make $20,000 and Rich guy makes $2,000,000, how does me making $20,000 and him making $200,000,000 million make any difference?

Because economic power and political power are strongly correlated, and always have been. It's the difference between the typical rich person having 100x more political power and influence in government than the average citizen, and the same wealthy individual having 10,000x more.

Massive gaping holes in income distribution are inherently anti-democratic. That might offend a person's capitalist sensibilities but it doesn't make it any less true.

Re: Too Hot for TED: Income Inequality

#184

Post by sukuriant »

bsphil wrote: post #181
sukuriant wrote: post #173

Earlier quoted context omitted.

90% of the top bracket..? That seems like honest robbery to me, like saying "I'm sorry. You're not allowed to make a lot of money. The government needs this money."

Only if you think people paid all of it without writing anything off.

Why should it be possible to write it all off? These systems seem to be completely in disagreement with each other? Why not keep it less than 50%, just make it harder to write things off O.o

Re: Too Hot for TED: Income Inequality

#185

Post by wvenable »

Tycho wrote: post #119
wvenable wrote: post #79

Earlier quoted context omitted.

The issue is that a very small number of very wealthy people are holding onto a very large amount of money. Any money that isn't being used to buy, sell, or invest in something is effectively just taken right out of the economy. Everyone is poorer because this money is "gone" from the system. All this wealth is locked away as a number in a computer.

If the money is in bank accounts, then it is contributing to the economy. One of the worst economic problems of recent years has actually been the lack of money just sitting in reserve to give the banks stability.

> If the money is in bank accounts, then it is contributing to the economy.

It is, but only in the most limited fashion. Money sitting in bank accounts is doing very little to improve unemployment. Buying physical goods would be much better for that.

> One of the worst economic problems of recent years has actually been the lack of money just sitting in reserve to give the banks stability.

In a way, that's true although I wouldn't frame it that way. The banks could make loans and then sell those loans as investments -- they didn't need any money on hand for that. Increasing deposits, for example, wouldn't change anything.

Re: Too Hot for TED: Income Inequality

#186

Post by wdr1 »

muhfuhkuh wrote: post #31

So, when does one prove causation? Because by any economic metric, the times when we've been fiscally strong is when the top marginal tax rate was higher than 36% currently. When they lowered it in 2001 from 40% while going to war , it created net zero jobs during the entirety of the Bush administration (and starting leaking jobs en masse during the crisis in 2008). One could argue that Reagan's administration saw so…

> he maintained a >50% top marginal tax rate average through his tenure.

Why would you average a tax rate over various year? Seems a deceptive thing to do.

Re: Too Hot for TED: Income Inequality

#187

Post by redthrowaway »

sukuriant wrote: post #184
bsphil wrote: post #181

Earlier quoted context omitted.

Only if you think people paid all of it without writing anything off.

Why should it be possible to write it all off? These systems seem to be completely in disagreement with each other? Why not keep it less than 50%, just make it harder to write things off O.o

Because, in liberal (small-l, read: the West) democracies, the notion that taxation policy should be used to encourage productive behaviours and discourage unproductive ones is deeply-enshrined. Thus do we give tax breaks to people who start companies, create jobs, or invest in same, and further penalize with a luxury tax those who just go and buy a big fuck-off yacht. We give tax breaks to local farmers, but tax cigarettes and booze.

If we had the kind of tax structure you propose, we'd equally reward those who invest their money in growing companies, and those who blow it on hookers and blow. Some libertarians would claim this as a just tax system, and that the free market would determine how and where people invest, but this is not an idea that has much purchase among economists, social scientists, or the political elite.

Re: Too Hot for TED: Income Inequality

#188

Post by philwelch »

dfc wrote: post #156
philwelch wrote: post #153

Earlier quoted context omitted.

Not exactly, but then again the country is neither as libertarian as Koch would like or as progressive as Soros would like. And frankly, there are things that Koch and Soros probably agree on that aren't the status quo either, so how do you explain that? The fact is, there are as many viewpoints as there are billionaires, and that's what keeps them from forming a cabal. If you want to find someone who can form a caba…

Why do corn farmers have more homogenous viewpoints than billionaires?

They've managed to get the government to subsidize them heavily, price their competitor, cane sugar, out of the market, and support corn-based ethanol production. Of course, HFCS is worse for you and doesn't taste as good, corn in general isn't a particularly healthy staple food, and it makes no technical sense to make ethanol fuel out of corn in the first place.

The point is, policy isn't corrupted by billionaires, it's corrupted by large, politically powerful blocs, which may or may not have individual rich people in charge. It helps if the blocs are geographically concentrated, because the political system works state-by-state.

Re: Too Hot for TED: Income Inequality

#189

Post by philwelch »

dfc wrote: post #167
MartinCron wrote: post #162

Earlier quoted context omitted.

Corn farmers all get their money in the same way. Billionaires? Not so much.

Corn farmers who grow corn for human consumption, feed and ethanol are all the same? Small family farmers are the same as giant agri-business farms? Corn farmers in Iowa are the same as corn farmers in New York?

Their interests are aligned. I'm just making an empirical argument: corn farmers have managed to get themselves a damn good deal from Uncle Sam at the expense of practically everyone else in the world, while George Soros hasn't.

Re: Too Hot for TED: Income Inequality

#190

Post by webXL »

ChrisLTD wrote: post #55
jakubmal wrote: post #20

I can't believe my eyes actually. As I was opening this comments page, I thought that majority will represent vastly different opinion here. But since that's not the case, I decided to speak up. Nick Hanauer cannot be more wrong. Taxing rich people means punishing someone for his success. There is no argument that could justify such Robin Hood's behaviour. In fact that's what was (or is) happening in the communism. S…

It's not about punishing success, it's about realizing that the market is not perfect at distributing wealth, and that wealth is not created in a vacuum. To the first point, are bankers, the founders of instagram, athletes, and movie stars really contributing so much to the world that they are worth hundreds of doctors, or thousands of teachers? To the second, would you be successful if it weren't for those doctors,…

Mail carriers? garbage men?? I actually do think my success has little to do with them.

People are paid what the market says they are worth, at least in the private sector. There's only one LeBron James and only one Bill Gates. They may stand on the shoulders of giants, but they each provide more value than what it costs us collectively to have them entertain us and create software. That's called consumer surplus. Mass markets produce mass income disparity- the few winners get the fat end of the distribution curve- but we would be far worse off with out that consumer surplus they provide.

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