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Too Hot for TED: Income Inequality

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Re: Too Hot for TED: Income Inequality

#121

Post by akeefer »

mtjl79 wrote: post #70

I'm sorry but, higher taxes aren't going to solve anything. At the end of the day, our spending will just not stop. We are just adding fuel to the fire. We need to: • Invest in the future: We need to invent, produce, and export new renewable energy sources. We need to invest in robotic manufacturing because cheap people labor is not sustainable in any country - robotic is where it will go. • We need to heavily tax im…

Wait a minute: you say that our expenses versus income is too high, but then also say that higher taxes won't solve anything? Unless you're arguing that higher taxes won't increase government income (which is a totally specious argument that people make all the time, but which isn't backed up in the least by any actual historical analyses), then higher taxes absolutely could solve the deficit problem. Federal tax revenues as a share of overall GDP are historically low right now, and merely letting the Bush tax cuts expire for good would solve almost all of the "deficit crisis." For example see http://economix.blogs.nytimes.com/2011/07/26/are-the-bush-ta... or http://baselinescenario.com/2011/10/03/how-big-is-the-long-t...

So I guess it depends on what problem you want to solve, but if you're worried about the federal deficit, then higher taxes (even in the form of just eliminating the bush tax cuts) will absolutely help to solve that problem.

Re: Too Hot for TED: Income Inequality

#122

Post by georgieporgie »

waterlesscloud wrote: post #65
georgieporgie wrote: post #56

Earlier quoted context omitted.

I think it's also worth noting that the US already gets 70% of all its taxes from the top 10% Why is that worth noting? That only further demonstrates the income inequality in the United States. Furthermore, wealth is far more important to take into account than income in any discussion of taxation or inequality. Also, I have yet to hear anyone make an argument that sounds anything like "simply being rich is wrong."

"That only further demonstrates the income inequality in the United States. " So is this the basic issue, then? That there's income inequality? Because that's always going to be the case. Even in the most socialist nations, or even communist nations. There is always a strong disparity of income and power. Always. And there always will be.

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.

Re: Too Hot for TED: Income Inequality

#123

Post by waterlesscloud »

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.

I almost agree with this. Of course it's a very small percentage of US wealth that's literally sitting locked up doing nothing. Money in a bank is doing something, being lent out or invested somewhere.

There's some wealth that's genuinely locked up, sitting in items that provide no utility for example. Say fine art locked in someone's vault or basement. But it's not all that much as a percentage.

Where the bigger problem in recent years has been is all the wealth tied up in what is essentially sophisticated gambling mechanisms in the financial markets. Money tied up in ways that aren't providing any true value to the economy (mumbo jumbo justifications aside). I'd be all for rules that stopped that sort of thing with funds subject to public bailouts. Your own money, your own risk, fine go ahead. Your money but risk assumed by the government? No. No thanks.

Re: Too Hot for TED: Income Inequality

#124

Post by smsm42 »

spamizbad wrote: post #82
muhfuhkuh wrote: post #48

Earlier quoted context omitted.

"(See the Department of Education, TARP, Medicare, war, etc.)" TARP money has been paid back almost in full, depending on who you talk to. The DoE budget is like an eyedropper full in the wake of an ocean, compared to the DoD and elderly entitlements. And, if you want $FAVORITE_CANDIDATE to touch Medicare and Social Security, you go right ahead. I'm quite positive they will smile and move on, knowing where their cons…

Targeting medicare and social security is silly anyway. They are funded via a separate tax (FICA/SECA) that only applies to the first 200K/250K of income. And the only reason why SS/Medicare are running out of money is because the government frequently borrows against social security surpluses. You may remember, back in 2000, one of Al Gore's campaign promises was to put social security into a "lock box" with the hop…

SS is funded by separate tax, but if there's a shortcoming, it is filled from the general budget, and if there's a surplus, it goes into general spending - so this distinction is an accounting fiction, both are incomes of the same government and as long as government fulfills its obligations nobody cares how the money got there. When SS starts running negative cash flow, the govt would have to refill that. Right now the promise of the govt is to refill that up to 2.7 trln - which is the size of SS Trust Fund - but nobody doubts for a second that the govt will in fact refill any sum necessary or will change SS rules (raise taxes and/or cut benefits, which are not legally guaranteed by anything) if necessary. So "lock box" here has very little meaning except taking part of the money out of circulation for no reason - it would definitely not stop the govt from borrowing money.

Re: Too Hot for TED: Income Inequality

#125

Post by gwright »

vannevar wrote: post #3

While I wholeheartedly agree with the reasoning presented in the talk, I can see why TED chose not to distribute it. It presents a pretty conventional argument for progressive taxation, without bringing any new facts or insight to the table. Historically, there is no evidence of a significant correlation between top tax rates and economic growth. Whether you believe taxes help or hurt the economy is strictly a matter…

I don't know about 'strictly a matter of faith'. There is some pretty good evidence that 100% taxation (i.e. 100% of your earnings belong to the state and not to you) doesn't work to well.

I'm not suggesting that there aren't reasonable arguments about what the marginal tax rate curve should look like (flat, curved, etc.) to optimize various economic metrics--just that there are some configurations that we can rule out as unworkable without much real controversy.

Re: Too Hot for TED: Income Inequality

#126

Post by eli_gottlieb »

webXL wrote: post #99
eli_gottlieb wrote: post #72

Earlier quoted context omitted.

But you can invest... Your money isn't stuffed under your mattress, is it?? Investment generates profits. It doesn't add to aggregate demand, but subtracts from it.

Why should the government "invest" then?

Because government "investments" are not for-profit investments in excludable (private/club) goods. They're non-profit "investments" in protecting commons goods and providing public goods.

Re: Too Hot for TED: Income Inequality

#127

Post by eli_gottlieb »

waterlesscloud wrote: post #96
splinterofchaos wrote: post #81

Earlier quoted context omitted.

That is not to say that the level of inequality is not greater than it was before or is elsewhere. The extent of inequality has grown in the states ( http://www.motherjones.com/politics/2011/02/income-inequalit... ) and compares unfavorably with other countries ( http://en.wikipedia.org/wiki/List_of_countries_by_income_equ... ).

With a first look at that chart, what it seems to truly reflect is the size of the middle class in each nation. Wouldn't a better solution be to increase the size of the middle class rather than decrease the size of the upper class? Also, among the western european nations and the US, I suspect a strong correlation between immigration rates and the data on the chart.

Problem is, a strong middle class usually rests on the strong provision and spread of certain goods. Some of these are private goods, like owning one's own house, but many of them are public goods: liveable environment, public transit, public schools, public universities, public health and health-care, etc.

Re: Too Hot for TED: Income Inequality

#128

Post by smsm42 »

mikecane wrote: post #50
horsehead wrote: post #8

I hate the term "the 1%" it's just a bunch of malarkey. Whether you got your money through savvy investing or hard work, it doesn't matter. What you earn, you should KEEP. I detest handouts, especially when someone tries to give them to me. Each person should get according to their work (or their ability to work. The disabled are the only ones remotely eligible for handouts, IMO). Now I'll just watch as my karma plum…

Your car breaks down, your cellphone gets no signal. You'd be pretty happy for a "handout" you'd self-describe as "assistance" or "help" or a "good deed."

Does it mean I have the right to take a car and a cellphone from any nearby person that looks rich enough to afford another one? After all, I need it clearly more than he does, so forcefully taking it from him is completely justified. In fact, if he objects, I'm completely justified to call him a greedy pig - I gave him an opportunity to do a good deed, and he dares to object? Despicable.

Re: Too Hot for TED: Income Inequality

#129

Post by eli_gottlieb »

waterlesscloud wrote: post #65
georgieporgie wrote: post #56

Earlier quoted context omitted.

I think it's also worth noting that the US already gets 70% of all its taxes from the top 10% Why is that worth noting? That only further demonstrates the income inequality in the United States. Furthermore, wealth is far more important to take into account than income in any discussion of taxation or inequality. Also, I have yet to hear anyone make an argument that sounds anything like "simply being rich is wrong."

"That only further demonstrates the income inequality in the United States. " So is this the basic issue, then? That there's income inequality? Because that's always going to be the case. Even in the most socialist nations, or even communist nations. There is always a strong disparity of income and power. Always. And there always will be.

Let me put it this way. It sounds like you don't want the entire government budget to rest on taxing one class and one class alone, the upper-class. That's a pretty virtuous and equitable thought to have, very fair to people who probably have much more than you.

Problem is, if income/wealth inequality is too severe, those guys are the only ones with money to contribute. So on some level, you need a certain level of income/wealth equality just to have multiple classes/brackets with enough excess income to contribute to the national welfare.

Re: Too Hot for TED: Income Inequality

#130

Post by runako »

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…

>> "Taxing rich people means punishing someone for his success."

That is a false conclusion. In particular, inheritances. Certainly you don't consider being born to rich parents a form of success?

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