# Income inequality -- good or bad? **URL:** \ **Category:** Great Debates\ **Created:** [March 9, 2010, 9:43am UTC](https://boards.straightdope.com/t/income-inequality-good-or-bad/531835 "2010-03-09T09:43:42Z")\ **Posts on this page:** 8\ **Page:** 6
**Author:** ![adhay](https://avatars.discourse-cdn.com/v4/letter/a/ecd19e/32.png) [@adhay](https://boards.straightdope.com/u/adhay)\ **Post date:** [March 11, 2010, 10:29pm UTC](https://boards.straightdope.com/t/income-inequality-good-or-bad/531835/101 "2010-03-11T22:29:15Z")
> [@md2000](#): > > Nothing is wrong with inequality produced by the market that reflects a person’s worth. … > > While the world needs salesmen and schmoozers, I seriously doubt they need to be rewarded to the extent of owning 80% of the nation’s wealth. Please don’t over simplify. **Shodan** , **Rumi** and other Pointallists evidently can’t appreciate Impressionist broad strokes. ---
**Author:** ![Ruminator](https://avatars.discourse-cdn.com/v4/letter/r/b9bd4f/32.png) [@Ruminator](https://boards.straightdope.com/u/Ruminator)\ **Post date:** [March 11, 2010, 11:21pm UTC](https://boards.straightdope.com/t/income-inequality-good-or-bad/531835/102 "2010-03-11T23:21:47Z")
> [@md2000](#): > > Nothing is wrong with inequality produced by the market that reflects a person’s worth. > > … > > Then, in general, the free market works. Programmers and network experts make good money, McBurgerFlippers make substantially less, and welfare pays much less. Skill, knowledge, and ability to deliver are generally rewarded when the employer is working within the market. (Except for places like civil service, where market is a often peripheral consideration…) > > … > > The opposite problem that the debate is really about is the elite who do own the 95% of this (or most any) country’s wealth. You’re trying to soften the stance of many leftists crying about inequality by emphasizing the super elite. However, there is very popular support for increasing taxes on incomes greater than $250,000. A $250k salary is hardly the realm of multi-million dollar CEO packages of Wall Street. All the $250k families together **do not** own 95% of the nation’s wealth and yet they are vilified. Whether the “rich guys” earn $250k, $100k, or $50k, if they make more than me, the janitor, they _make too much_. Your attempt to narrow the complaint only to the super rich does not reflect actual sentiments of the poor. ---
**Author:** ![adhay](https://avatars.discourse-cdn.com/v4/letter/a/ecd19e/32.png) [@adhay](https://boards.straightdope.com/u/adhay)\ **Post date:** [March 11, 2010, 11:54pm UTC](https://boards.straightdope.com/t/income-inequality-good-or-bad/531835/103 "2010-03-11T23:54:32Z")
> [@Ruminator](#): > > You’re trying to soften the stance of many leftists crying about inequality by emphasizing the super elite. … Ok, getting back to my suggestion of a flat tax on net worth, let’s say anyone worth more than $10M kicks down 10% of the excess. Now those guys on the bottom rung of the elite are going to be hurting. I see them having to cut back the the full time staffs at their second homes and clipping coupons, but they’ll get by. No one said it’d be easy. To someone or a corporation (according to SCOTUS, corps are people) worth $100M, $9M is chump change. I’m trying to decide if it should be extracted annually or at a more leisurely rate. Your thoughts? ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [March 12, 2010, 12:08am UTC](https://boards.straightdope.com/t/income-inequality-good-or-bad/531835/104 "2010-03-12T00:08:42Z")
> [@Ruminator](#): > > You’re trying to soften the stance of many leftists crying about inequality by emphasizing the super elite. > > However, there is very popular support for increasing taxes on incomes greater than $250,000. A $250k salary is hardly the realm of multi-million dollar CEO packages of Wall Street. All the $250k families together **do not** own 95% of the nation’s wealth and yet they are vilified. > > Whether the “rich guys” earn $250k, $100k, or $50k, if they make more than me, the janitor, they _make too much_. Your attempt to narrow the complaint only to the super rich does not reflect actual sentiments of the poor. I think you want to believe this is about resentment against the wealthy. What it is really about for many of us is an economy where a small number become powerful enough to cement themselves into the halls of power and not be extracted. A plutocracy is not a meritocracy, it is a threat to one. Besides, the concept that we should see another 40 years of productivity gains and advances in technology while more and more people end up bankrupt is not something most people want. If things continue the way they are, by the 2030s the top 1% will control 40% of national wealth instead of 25%. This gives them more power to buy/sell media outlets, political parties, industries, etc. In fact, at that point you might start running the risk of private armies. FTR, a sizable chunk of those over 250k vote leftist. Obama won the 250k+ income bracket in 2008. All productivity gains going to the top, where they can do whatever they want with them (including buying and selling the levers of power) is not a good path to be on. ---
**Author:** ![Ruminator](https://avatars.discourse-cdn.com/v4/letter/r/b9bd4f/32.png) [@Ruminator](https://boards.straightdope.com/u/Ruminator)\ **Post date:** [March 12, 2010, 2:07am UTC](https://boards.straightdope.com/t/income-inequality-good-or-bad/531835/105 "2010-03-12T02:07:36Z")
> [@Wesley\_Clark](#): > > I think you want to believe this is about resentment against the wealthy. Yes, sure… I just go and invent a resentment that isn’t there. The resentment is real against higher income familes who are NOT wheelin’ dealin’ Wall Street bankers. One example from a liberal forum: [http://www.democraticunderground.com/discuss/duboard.php?az=view\_all&address=389x7631253](http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7631253) Some choice reactions: \*“If we can’t eat them then I guess the least they could do is shut up.” “But they work so HARD! They make so much because they do so much MORE!” (sarcasm) “Well, those making $250k living in LA may have to get the next Lexus down this time.” \* Plenty of examples like that all over the web. > [@](#): > > What it is really about for many of us is an economy where a small number become powerful enough to cement themselves into the halls of power and not be extracted. A plutocracy is not a meritocracy, it is a threat to one. This is not a concern for me and has never been. I think focusing on this is pointless and a cop out. Also, the poor (and eveyone else) concentrate their buying choices (tv, movies, food, toys) in ways that lead to accumulated income into a handful of conglomerates. You don’t have to buy a toy from Hasbro or DVD from Paramount movie studio. You can make a toy out of a milk carton or have the family do a cheap activity – play charades or a board game. If everyone made choices like this, you wouldn’t have a big giant toy company or movie studio to complain about. Banks are powerful? Yes… but you don’t have to take out loans to feed every desire of consumerism. Everyone makes all these consumer decisions and can’t connect the dots on why these big companies lord over them, LOL. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 12, 2010, 8:14am UTC](https://boards.straightdope.com/t/income-inequality-good-or-bad/531835/106 "2010-03-12T08:14:45Z")
> [@Ruminator](#): > > You’re making the mistake of comparing businesses using ex post facto categories of “operating system” vs “search.” > > The founders of Excite search engine and Google (Sergi and Larry) made proposals to Microsoft about their technology. Microsoft and their ultra-smart CTO (Nathan Myhrvold) thought they didn’t offer any viable business value. Again, you can’t use ex post facto categories of “O/S vs search” to narrate that history: both Microsoft and Google in 1998 didn’t think of themselves as O/S vs Search. There is nothing ex post facto about the categories. As I already explained, consumers can switch search engines at practically zero cost. Switching OS’s is a significant cost - if not in money, than in time and effort. I haven’t seen any companies standardize on a search engine to be used by employees - most standardize on operating systems, and don’t change them very often. That Microsoft blew it almost as big as IBM did is not relevant. It does hint that perhaps the reason for their dominance in the OS space is not their giant brains, though. > [@](#): > > Only if you constrain your brain to only think in _exactly_ the categories of existing businesses do you feel that government intervention is required. Smart and driven people have been instigating “[creative destruction](http://en.wikipedia.org/wiki/Creative_destruction)” and we have benefited from it. I’ve seen people advocating this for decades, including some companies which later didn’t do it. It is a great concept when you have 5% market share - not so hot when you have 75%. > [@](#): > > Your own text has the answer to this dilemma. You don’t compete on “search” – you create something new that makes that category of “search” irrelevant. That’s like saying the best way to deal with the Standard Oil monopoly was for someone to invent a better running shoe. Search and the OS are orthogonal. The browser and the OS might not be, which was why Microsoft was so scared of Netscape. Search makes a lot of money - at least when clever people like Google get at it. > [@](#): > > The key difference (and possibly the most important) is that businesses (even dominant ones with monopolies) are subject to Darwinian evolution by way of changing consumer preferences. Government distortions (subsidies, taxes, tariffs) have no feedback mechanism to self-correct. If the governement were to provide a subsidy for companies to distribute Linux with Firefox, that subsidy would stay regardless of how shitty, bloated, and wasteful Linux+Firefox becomes. It becomes the government entity you can’t kill because of politics. Instead of LinuxFirefox growing because of technical merits, it only lives on because the constituents of the senator work on it. They would lose jobs if it went away. Microsoft, on the other hand, will die off (bankruptcy) or get acquired by somebody with a better mousetrap. Governments change also, by the market of the electorate, so whatever government does must be okay, right? This paragraph is stuffed with strawmen. > [@](#): > > The following government interventions are wrong: > > [ul] > [li]slapping a tax of $500 on every copy of Microsoft Windows so that it encourages buyers to look at Apple Mac or Linux.[/li][li]subsidizing with rebate checks for Apple Mac or Linux.[/li][li]nationalizing Microsoft to become a non-profit government agency that dispenses operating system software to its citizens[/li][/ul] > > The type of government interventions that make more sense are infrastructure ones that don’t favor any particular business. For example, passing laws that makes information more freely available. > > Examples might be reducing the patents on software from 20 years to 5 years. Or require that all proprietary document formats (.XLS, .DOC, etc) be made public after 3 years with no penalties for reverse-engineering. In other words, you equalize through lowering the friction of INFORMATION instead of tinkering with taxes and subsidies. Well, in my reading on the DoJ case against Microsoft, I didn’t come across any proposals like the strawmen you gave above. What was desired is that Microsoft would not cripple competitor’s software, would not force OEMs to load their software, would not charge OEMs for Windows licenses for all machines produced, and would publish the entire Window API, and not have special bits that helped Microsoft applications run better and faster than competitors. Most antitrust remedies have nothing to do with subsidizing competitors, but just in establishing a level playing field. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [March 12, 2010, 9:13am UTC](https://boards.straightdope.com/t/income-inequality-good-or-bad/531835/107 "2010-03-12T09:13:43Z")
> [@adhay](#): > > To someone or a corporation (according to SCOTUS, corps are people) worth $100M, $9M is chump change. Whoever told you this is either a liar or a fool. For example, according to Wikipedia BP (one of those big, nasty energy companies) has total equity of $100 billion, and net income of $16.6 billion. Your plan would involve confiscating an additional 60% of their profits for the year. This is _not_ chump change. > [@](#): > > I’m trying to decide if it should be extracted annually or at a more leisurely rate. Your thoughts? You don’t have a clue what you’re talking about. Hopefully you’re smart enough to realise this, and that your idea should not be defended, as it is inherently fatally flawed. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [March 12, 2010, 5:42pm UTC](https://boards.straightdope.com/t/income-inequality-good-or-bad/531835/108 "2010-03-12T17:42:45Z")
> [@Ruminator](#): > > You’re trying to soften the stance of many leftists crying about inequality by emphasizing the super elite. > > However, there is very popular support for increasing taxes on incomes greater than $250,000. A $250k salary is hardly the realm of multi-million dollar CEO packages of Wall Street. All the $250k families together **do not** own 95% of the nation’s wealth and yet they are vilified. > > Whether the “rich guys” earn $250k, $100k, or $50k, if they make more than me, the janitor, they _make too much_. Your attempt to narrow the complaint only to the super rich does not reflect actual sentiments of the poor. No. I have no objection to people who become rich from their talents - Bill Gates, Wayne Gretzky, or Meryl Streep have an extraordinary level of wealth. They earned it in various ways by collecting directly or indirectly from millions of people who valued that talent. We’ll skip the often-repeated stat about how the CEO has gone from 22 times the salary fo the lowly line worker to several hundred times; the point is that the elite of the corporate/financial world have become obscenely rich, to the point where their value is not justified by logic or the market, simply because they essentially set their values themselves or in a cartel-like uncontrolled manner. Pay bears no relation to performance or perceptive ability, as is obvious by the recent meltdown and the mortgage bubble preceding it. As for the people making $250,000 and worrying about extra taxes - how much? A paycheque of $20,000 a month - as much as many people make in a whole year - how much more is Obama asking you to pay? (and how much of that $20,000 goes to taxes now?) Sorry, Canada is not much different from the USA, and in some ways at the bottom of the scale pay is more - and the average industrial wage here is $40,000 a year; probably about the same in the USA. People making $250,000 are at the bottom of the “rich” scale, but still “rich” in my books. If you must pay an extra $500 a month I’m sure you can afford it. It’s the same as the whining about estate taxes as if the whole amount is confiscated, when it actually impacts very few people and not very much. Otherwise, where would you rate someone as “rich” enough that they could pay more and it doesn’t hurt? $400K/yr? $800K? $2M? $10M? [Previous page](https://boards.straightdope.com/t/income-inequality-good-or-bad/531835.md?page=5)