# How do we actually address rampant income inequality? **URL:** \ **Category:** Great Debates\ **Created:** [February 17, 2016, 12:00am UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303 "2016-02-17T00:00:22Z")\ **Posts on this page:** 20\ **Page:** 6
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [February 17, 2016, 9:59pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/101 "2016-02-17T21:59:59Z")
> [@Johnny\_L.A](#): > > ‘Are there no prisons?.. And the Union workhouses. Are they still in operation?’ > > I don’t know where you live, but everywhere I’ve lived there are not enough shelters for the number of homeless. Unless by ‘places for them to go’ you mean parks, underpasses, alleys, and city streets; in which case the do have places to go. It’s not that they choose to; it’s the only place they _can_ go. I live in Utah. [We solved homelessness here](https://www.washingtonpost.com/news/inspired-life/wp/2015/04/17/the-surprisingly-simple-way-utah-solved-chronic-homelessness-and-saved-millions/), or didn’t you hear the good news? On a more serious note, there’s no reason for someone to be homeless in SLC, UT, except that they reject offers to help. Look at the last paragraph of that WaPo article: > [@](#): > > “One woman had been on the street for a long time, until **we finally convinced her to come into our housing** ,” Walker said. “She didn’t trust it, and she put her collection of stuff on the bed. Then for the next two weeks, she slept on the floor. … But once she realized that we weren’t going to take this from her, that she had a lock, she had a mailbox, she started to reacclimate.” It wasn’t “sorry lady, no room for you”, it was a long time trying to convince her to accept the offered and available assistance. ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [February 17, 2016, 10:04pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/102 "2016-02-17T22:04:37Z")
> [@OldGuy](#): > > The top 20 percent earned 61.4 percent of income in 2006 and the top 1 percent earned 21.3 percent of income that same year. So I wouldn’t be too surprised if the top 3% earn substantially more than 29% of the total income which would mean they are paying a smaller percentage of the tax than they earned of the income. After summing payroll taxes, federal, state, and municipality income taxes, sales, vehicle, dividend, interest, property, gasoline taxes, Medicare and social security taxes, taxes on services, hotel taxes, and I’ve probably missed a few. Are you sure? ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [February 17, 2016, 10:14pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/103 "2016-02-17T22:14:51Z")
> [@HurricaneDitka](#): > > It wasn’t “sorry lady, no room for you”, it was a long time trying to convince her to accept the offered and available assistance. Good for Utah. Unfortunately, that’s not going to fly in most cities in the U.S. Here in Seattle, there’s enough argument over where to allow the homeless to make their own camps; let alone providing housing for them. For most of the country, ‘There’s no room at the inn.’ ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [February 17, 2016, 10:40pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/104 "2016-02-17T22:40:08Z")
> [@Johnny\_L.A](#): > > Good for Utah. Unfortunately, that’s not going to fly in most cities in the U.S. Here in Seattle, there’s enough argument over where to allow the homeless to make their own camps; let alone providing housing for them. > > For most of the country, ‘There’s no room at the inn.’ Seattle should give them bus tickets to Salt Lake. Perhaps I should move to Seattle. :eek: ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [February 17, 2016, 11:17pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/105 "2016-02-17T23:17:21Z")
> [@bump](#): > > The other reason that estate taxes aren’t such a terrible thing is because they’re essentially a tax on unearned income; nobody really misses something they never had. Why do you have such a hatred for people inheriting money? What does it do to you? What if a rich person wants to leave all their money to their handicapped child, someone who can’t reasonably hold a job? Or maybe they give it to a daughter who wants to volunteer for a non-profit? You’ve admitted that you don’t want to confiscate inheritance for revenue; you just want to stick it to all rich kids. Again, that’s a terrible reason for a tax policy. ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [February 18, 2016, 12:26am UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/106 "2016-02-18T00:26:50Z")
> [@Johnny\_L.A](#): > > Good for Utah. Unfortunately, that’s not going to fly in most cities in the U.S. Here in Seattle, there’s enough argument over where to allow the homeless to make their own camps; let alone providing housing for them. > > For most of the country, ‘There’s no room at the inn.’ Homelessness is more of a mental health issue than a problem with housing supply. Is it possible to equalize innate mental ability? ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [February 18, 2016, 3:27am UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/107 "2016-02-18T03:27:19Z")
> [@Salvor](#): > > Now in her example, the poor were still better off, just not as much better off compared to wealthier people. That is the kind of inequality I find more tolerable. > > What we are experiencing today is different though, the poor are falling further behind in purchasing power, and the middle class is sort of running in place if not losing ground. The poor are still better off. As I posted recently in a near-duplicate thread: > [@IS Wall Street the main cause of U.S. income/wealth inequality?](https://boards.straightdope.com/t/is-wall-street-the-main-cause-of-u-s-income-wealth-inequality/745926/102): > > CBO ([PDF](https://www.cbo.gov/sites/default/files/112th-congress-2011-2012/reports/10-25-HouseholdIncome_0.pdf)) already added most of it up: > > Real median after-tax household income increased by 35% 1979-2007. It’s even up for the lowest income quintile, although only a bit. I spent most of the 200’s in the lowest income quintile, and there’s no way I would have traded that for the lowest income quintile in the 70s or 80s, partially due to these increases, but more so due to some of the other quality-of-life changes others have mentioned. So the rest of us can do well even if the rich are getting ludicrously richer. There is no stagnation or decoupling from productivity. That doesn’t mean it’s all puppies and sunshine. Possible dangers include the feedback loops that **septimus** mentions. I’ll see if I have time to grab some quotes from the book he mentions, which I read on his recommendation. It’s good. Imperfect, but what isn’t? Note that the video you link to shows charts for wealth inequality, not income inequality. They’re linked, but not the same thing. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [February 18, 2016, 3:32am UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/108 "2016-02-18T03:32:10Z")
> [@Ruken](#): > > It’s even up for the lowest income quintile, although only a bit. I’ve not teased it apart, but I believe much of this small increase is due to changes in tax policy. So when the OP asks “how?”; taxes and transfers are a way. Whether that’s a good way is another question. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [February 18, 2016, 2:34pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/109 "2016-02-18T14:34:31Z")
> [@Deeg](#): > > Why do you have such a hatred for people inheriting money? What does it do to you? What if a rich person wants to leave all their money to their handicapped child, someone who can’t reasonably hold a job? Or maybe they give it to a daughter who wants to volunteer for a non-profit? > > You’ve admitted that you don’t want to confiscate inheritance for revenue; you just want to stick it to all rich kids. Again, that’s a terrible reason for a tax policy. I don’t have “such a hatred”. I’m just explaining the rationale behind the existing estate tax policies. And honestly, I don’t have too much problem if _people with estates worth more than 5 million_ get those taxed fairly heavily. We’re not talking the struggling family inheriting 20k from a recently deceased parent. We’re not even talking about the upper middle class family inheriting a couple hundred grand and a reasonably well valued home from their parents here. What we’re talking about is people, who by any measure are \*\*\*rich \*\*\* bequeathing sizeable fortunes to their heirs, who instantly become rich as well. To some extent, you’re right- this is something that disproportionately impacts the very wealthy, but at the same time the estate tax IS the most progressive aspect of the US tax code. And, lest you grind your teeth on that silver spoon too much, on an estate of 6 million, only 570,000 would actually be taxable, since that’s the amount ABOVE the exemption level, so basically everyone gets their first 5.4 million untaxed. Beyond that, it’s about a 17% tax rate. So you’re getting your panties in a twist because some guy inheriting 10 million from his rich parents only actually sees $9,223,100 because the feds taxed him about 800,000. Cry me a fucking river. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [February 18, 2016, 2:37pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/110 "2016-02-18T14:37:43Z")
> [@bump](#): > > Cry me a fucking river. And don’t forget that most of a large estate will consist of unrealized capital gains _which have not been taxed_ and **will not be taxed except** by the estate tax. (Although this may have changed very recently?) ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [February 18, 2016, 4:16pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/111 "2016-02-18T16:16:15Z")
> [@bump](#): > > Cry me a fucking river. It’s an emotional argument. You just don’t like rich kids getting lots of money from their parents. I’m open to raising taxes on the wealthy (on inheritance or otherwise) but there’s got to be a policy reason behind it. “They won’t miss it anyway” is not a good reason. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 18, 2016, 4:18pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/112 "2016-02-18T16:18:14Z")
> [@bump](#): > > If the government’s going to do anything with the estate tax in the guise of preventing income inequality, they ought to lower the minimum by quite a bit, so that more estates are taxable. (the minimum went up during the Bush II administration). The estate tax, like the corporate tax (and most state income taxes) are practically flat taxes. The brackets are pretty thin so if you pay an estate tax, you are likely paying close to the top marginal rate. The exemption is $5,450,000. The top marginal rate of 40% is paid at $6,450,000. But, you are already paying 30% by the time you get to $5,550,000. > [@](#): > > Redistribution via some sort of negative income tax/basic income seems like an obvious way to mitigate this, but I’m not at all convinced that it wouldn’t also just raise prices for everything across the board, as now companies don’t have to try to make a profit by catering to poor/lower income consumers- there’s no such thing in that world. Wage inflation is probably one of the best ways to redistribute wealth. Make all income that is subject to the social security tax exempt from the income tax, expand the EITC and pay for it with increased marginal tax rates and you will see a pretty dramatic effect assuming that everyone doesn’t move to Monaco. > [@](#): > > I’m not convinced that corporate taxation is really the issue either; certainly the government ought to tighten the laws up and severely penalize offshoring headquarters and the like to avoid taxes, but I don’t think that the money gained from that would be a drop in the bucket compared to the cash flows involved in something like a negative income tax. Corporate taxes used to be a MUCH bigger part of our tax revenue but international tax competition has driven corporate tax receipts pretty low. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 18, 2016, 4:24pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/113 "2016-02-18T16:24:08Z")
> [@Tom\_Tildrum](#): > > It was [denounced](http://www.theatlantic.com/magazine/archive/1997/03/the-worst-thing-bill-clinton-has-done/376797/) at the time as “legislative child abuse” that moved two million people into poverty. It has more recently been [cited](http://www.washingtonpost.com/wp-dyn/content/article/2009/12/04/AR2009120402604.html) by as aggravating the effect of the 2008 financial crisis upon America’s poor. You yourself were just noting the inadequacies of the social safety net. > > The plight of the poor is the whole reason people worry about inequality, after all. Political rhetoric during the floor debates or before they vote on the bill says nothing about its actual effect. I was opposed tot he bill when it was passed as well but we saw poverty and the unemployment rate drop in the following years. And its not like the economy sucked in 1996 and was awesome in 1998. During a good economy, there might be such a thing as too much welfare. It removes some of the social safety net for when times get bad but there does seem to be a silver lining to welfare reform. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 18, 2016, 6:06pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/114 "2016-02-18T18:06:10Z")
> [@Deeg](#): > > I’d say it is opportunity. Bill Gates is a multi-billionaire because he had early access to computers, got a good education, and went to Harvard (for a time) and made connections. Page & Brin were able to go to a top-tier school, came up with a great idea, and had the opportunity to put that idea into a company. > > That’s the point about social/economic mobility: does everybody in the US have the opportunity to be successful like Page and Brin? If the answer is no, what can we do to change it? Confiscating people’s inheritance does not help that. Almost everybody has the opportunity to succeed like brin and page. They are not the children of wealthy parents but they ARE the children of very smart parents. I don’t know that you can really level the playing field of genetics and parentage. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [February 18, 2016, 6:17pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/115 "2016-02-18T18:17:37Z")
> [@Deeg](#): > > You just don’t like rich kids getting lots of money from their parents. I’m open to raising taxes on the wealthy (on inheritance or otherwise) but there’s got to be a policy reason behind it. “They won’t miss it anyway” is not a good reason. There are two major policy reasons why taxing the wealthy is a good idea. The first is the declining marginal utility of money, which is why progressive tax rates are a good idea. Tax the rich more because it won’t hurt them as much. The second is that it’s a Pigovian tax. If you tax something, you get less of it. So we should tax things that have negative externalities. Taxing income from working and income from investment are deeply problematic from this stance. We want people to work and make money. We want people who have money to invest it in effective ventures that result in economic growth. We should try to make those taxes lower. Sin taxes and luxury taxes are a great example of effective Pigovian taxes. We’d all be better off if we smoke and drank less and bought fewer yachts. So we ought to tax those things pretty highly. Massive intergenerational wealth transfers also have negative externalities. Money provides access to political power, which almost always results in rent-seeking and regulatory capture. Once you’re rich, there are all kinds of biases in the system to keep you rich. Taxing massive transfers helps keep us from developing a permanent aristocracy. And, compared to other taxes, does less harm to those taxed, and doesn’t penalize something that has societal benefit. It’s Win-win (-lose, for the fabulously wealthy). ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [February 18, 2016, 6:23pm UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/116 "2016-02-18T18:23:14Z")
> [@iamthewalrus\_3](#): > > We want people who have money to invest it in effective ventures that result in economic growth. We should try to make those taxes lower. Investments are deductible. By having higher taxes, it encourages investment so as to lower the tax burden on the income or capital gain. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [February 19, 2016, 1:12am UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/117 "2016-02-19T01:12:44Z")
> [@Johnny\_L.A](#): > > Investments are deductible. By having higher taxes, it encourages investment so as to lower the tax burden on the income or capital gain. 1. I’m not sure how this is a response to the point I made, which is that we should tax things we want to see less of. 2. I’m not sure what you mean by “investments”, but under my understanding of the word, they are not in general deductible. If I have $500 in income and a choice to go buy some stocks/bonds with it (investment) or go out to a really nice dinner (consumption), neither choice will result in my getting to deduct anything from my taxes. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [February 19, 2016, 2:30am UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/118 "2016-02-19T02:30:03Z")
> [@iamthewalrus\_3](#): > > 1. I’m not sure how this is a response to the point I made, which is that we should tax things we want to see less of. > > 2. I’m not sure what you mean by “investments”, but under my understanding of the word, they are not in general deductible. > > If I have $500 in income and a choice to go buy some stocks/bonds with it (investment) or go out to a really nice dinner (consumption), neither choice will result in my getting to deduct anything from my taxes. Maybe he is talking about an IRA or 401K? Those are deductible but there isn’t a lot of overlap with estate taxes. ---
**Author:** ![sweat209](https://avatars.discourse-cdn.com/v4/letter/s/9fc348/32.png) [@sweat209](https://boards.straightdope.com/u/sweat209)\ **Post date:** [February 19, 2016, 2:42am UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/119 "2016-02-19T02:42:17Z")
> [@Salvor](#): > > First, do you think it’s a problem at all? > I used to not be overly concerned about it. I was extremely sympathetic to this thatcher sort of argument here: > > Now in her example, the poor were still better off, just not as much better off compared to wealthier people. That is the kind of inequality I find more tolerable. What we are experiencing today is different though, the poor are falling further behind in purchasing power, and the middle class is sort of running in place if not losing ground. > > Here is a slightly outdated graphic exploring the discrepancies visually: > > Clearly, people want the spoils of our labor to be better distributed. This does not mean we want equal rewards to all people regardless of what they put in. You work harder, you are born smarter, you contribute more, it makes perfect sense that you are rewarded more. > > But herein lies the problem with both liberals and conservatives. > The liberals think that the differential outcomes are a function of economic starting points and lack of quality schools and lower college attendance and racism. External factors all, so little focus on the variables that the individual brings to the table, like their own effort. > > Conservatives tend to focus far more on internal characteristics, how hard the person works, ignoring starting advantages like wealth and environment. To the extent that they DO focus on external factors it tends to be around tax levels where lower taxes will inevitably lead to direct increases in wealth generation and general prosperity. They do not pretend to imagine that the scales will ever be equalized, but since theirs is a view focused more on the effort of the individual, they don’t much care. > Neither of these views is complete however. The more equal and just a society, the less racism, the more similar the starting conditions and educational opportunities, the MORE the innate differences between individuals will come to the fore to dictate outcomes. We know have the population is below average intelligence, digging deeper and deeper into the bottom of the barrel to scrape the grime to send to college as if that is EVER going to yield the same results as others that are more capable is a fantasy. > > Same thing on the conservative side, they like to pretend the only variables that affect the outcomes of a person are based on their own efforts, with perhaps a little chance. But aptitude is a birthright, not someone earned, it is the LEAST meritocratic force in all of nature, and it not something the right “values” and work ethic can increase. The idea that we relegate people who make a good faith effort to get ahead, but were not born as gifted as others to some gutter level existence is an abomination of all decency. > Some may say we are far from that, but are we? Robots, AI, these things are coming on strong. The next industry that will be majorly disrupted is transportation, it also happens to be one of the largest employers of people without advanced skillsets and degrees. > > uber drivers / delivery drivers / trucks that ship freight. > > Self driving cars and trucks will eliminate the need for such drivers. Gone. Poof. There are forces that depress wages and the value of labor and income generation that are outside the realm of blanking taxes conservatives !!! > So what is the solution? A universal basic income? > > Free college? > just lower tax rates to make a more (channels larry kudlow) “pro growth” economy? > Have everyone invested in the stock market by law so that not ONLY the wealthier are reaping the rewards there? > > What? > > A lot of solutions are bandied about that seem to me incapable of putting the slightest dent in the problems and distributions of wealth. I like Bernie, but free daycare and public college does not seem like a solution, especially not for the millions of people that are too dumb to graduate any college in the first place. They used to be able to work in a factory, where do they work now? The problem why the rich are getting richer in the US and the poor are getting poorer in the US and the middle class is despairing really fast is jobs. Most factories and warehouse are gone or going to China and India. The US is turning into a service sector economy now. The problem it is flooded with too many people. There are long lines to get jobs so the employer can pay you dirty pay with little to no vacation time. There are too many people and not enough jobs. So the employer can pay you dirty pay with little to no vacation time. And so the middle class is despairing really fast. ---
**Author:** ![even\_sven](https://avatars.discourse-cdn.com/v4/letter/e/dfb087/32.png) [@even\_sven](https://boards.straightdope.com/u/even_sven)\ **Post date:** [February 19, 2016, 3:05am UTC](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303/120 "2016-02-19T03:05:39Z")
Two points: 1. Level of access to consumer goods is just one small part of poverty, and after you get past the “basic food and shelter” stage (around $7000 a year) it’s not the most important one. Poverty is fearing violence. Poverty is leaving your kids in unsafe childcare. Poverty is commuting three hours a day on the bus. Poverty is exposure to hazardous chemicals. Poverty is lack of preventative healthcare. Poverty is fear of what comes next, insecurity, instability, lack of political power, physical pain, exhaustion and hopelessness. And above all, poverty is about lacking choices and lacking agency. Yes, cell phones are nice. But what’s important to people is to feel safe, to have time with their family, to participate in activities they value and to feel like they have choices in life. So while we don’t have the most extreme deprivation, that doesn’t mean American poverty isn’t a real thing. 1. That said, poverty isn’t really the problem when it comes to inequality in America. The real issue with extreme inequality is that it slows social mobility. And social mobility is a beautiful mechanism for making sure that the smart poor people get a chance to apply their talents and that the dumb rich people don’t end up in charge of stuff. Without social mobility, you waste the potential of huge chunks of your population, which isn’t good socially or economically. And you end up with power being allocated based on who your parents were-- which isn’t always going to lead to the best outcome. The most economically successful country is going to be the one where each individual is best able to reach their full potential, and extreme inequality is a force against that. [Previous page](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303.md?page=5) [Next page](https://boards.straightdope.com/t/how-do-we-actually-address-rampant-income-inequality/746303.md?page=7)