At the cost of creating a bigger problem, so that’s no solution either.
It’s sensationalist, isn’t it? You get these rich gits who have no idea what a days work is, and then you get the uneducated masses who claim benefits. It’s a divide and conquer mentality. Everyone loves a bit of resentment.
I work and volunteer in places that couldn’t be more opposed if they tried. The people I work with have very specific opinions - opinions that they’ve pulled out of the ether - about upper and lower classes (they hate both). They get their opinions from the Daily Mail (british tabloid).
The people I volunteer with could neatly fit in a Guardian reading demographic.
-Neither opinions are without bias. The only difference is, the folk I volunteer with tend to volunteer with people in the community. They talk to all sorts, and hear a wide mix of problems and concerns - because of this exposure they tend to express themselves in a less reactionary way. I think the term ‘warfare’ completely counterproductive. We’re never going to get away from the fact the people love a bit of finger pointing
Wealth is inherently relative. Your notion that everything could be okay and people could live comfortably on a 1-99 wealth split is… odd.
Part of the reason you can’t buy much for a penny is because there are so many pennies.
So the top 1 percent has 99 percent of the wealth. That leaves 1% of wealth for everyone else. How is that split? Part of wealth inequality is a certain self similarity. Within that 99 percent the top will also have a disproportionate amount of wealth. So by the time we get to the bottom there is literally nothing left.
So that brings us to your hypothetical. What if that bottom did have non-zero money. Well… inflation, that’s what happens. Since the bottom has money, the middle has more money than the bottom by a HUGE factor so they can afford to spend much more for those same comforts. And the wealthy, have freaking insane amounts of money. Essentially, such a skewed wealth distribution forces whatever amount of money the bottom has, no matter how large numerically, to be worthless.
Your hypothetical is a utopia mirage. Money simply does not work that way.
Also more than the 90% left, combined. More or less. The 1% alone controls more wealth than the bottom 45%.
Which is, in itself, a meaningless sentence.
For example, if the rate is 0.0001% and steady, the sentence is still correct, but the actual people are getting rogered. The actual rate is slightly higher than this, but barely into the double digits. Meanwhile, the earnings of the top 10% have increased by over 250% over the last 20 years. That growth has *not *been steady, if anything it appears to be exponential.
Indeed. And the lowest classes have even seen their relative income decrease, which should never ever is a thing that happens in a nation still boasting a net positive growth.
Anything can be framed as “class warfare”. Anything can be framed as “a jelly doughnut”, too. How is that dangerous, though ?
Wealth/income inequality is an indicator of more fundamental issues. Namely, that the benefits of a growing economy are not reaching large segments of the economy.
Then point to the “fundamental issue” and say “that’s the problem”. It’s facile (and stupid) to complain about “income inequality”. Seems like it’s some kind of “code” for the left.
It’s like complaining about air pollution caused by house burning, and not pointing at the house on fire. The fire is the problem. The air pollution is the “indicator”.
Yay! 
Aw. 
The issue is do we live in a hunter gatherer economy or an agricultural economy.
In a hunter gatherer economy, the men of the tribe go out and kill some buffalo and every family takes their share of the meat. If one family takes more meat than its share that is less for everyone else.
In an agricultural economy every family farms its plot of land and lives off what that land produces. If one family has an especially good harvest that does not affect the harvest of any other family in the slightest.
Everyone who complains about income inequality seems to take for granted that we live in a hunter gatherer economy but does not provide any evidence. On May 18, 2012 Facebook went public and Zuckerberg made 19 billion dollars, meanwhile I had the exact amount of money I had on May 17 minus what I paid for lunch. If Zuckerberg had been hit by a bus before founding the company, that 19 billion would not have been distributed to the lower classes. It would never have existed.
Could we wipe out poverty, then, by a one-time massive tax on rich people and gave every family in the US $1 million? If yes, would that wipe out poverty forever?
Irrelephant. The rich guy has contributed his pile of cash, the managers have contributed their management, and together they are wielding those resources to generate a return. The distribution of that return is entirely up to the consent of the involved parties.
To declare that “The owner of the wealth is providing nothing to the process” flies in the face of the obvious fact that if the owner does NOT contribute his wealth to the process, no one - not him, not the managers - earns anything. To suggest that the managers alone are responsible for whatever benefits have accrued to society through such an investment (despite the fact that they keep only a fraction of the return) is to suggest that they are underpaid - as if something other than the laws of supply and demand should determine their compensation.
[quote=“Terr, post:46, topic:678279”]
It’s like complaining about air pollution caused by house burning, and not pointing at the house on fire. The fire is the problem.
[QUOTE]
I agree with the analogy, but it’s an over-simplification.
I think a better example would be:
Faulty wiring that causes a fire, but only the wealthy can afford an electritian.
No. Let’s say you distribute all the wealth in the country evenly. First of all, you are talking about distributing around $75 Trillion if you plan to give every family in the US $1M (300 M people, assuming average family of 4). That’s like 5x the annual GDP of the US.
Secondly, the per capita GDP of the USA is only around $45-50k. So a one time tax would only let the entire population live a middle class lifestyle for one year.
Third, markets will react to the sudden shift in wealth. What do you think would happen to real estate prices if everyone suddenly could afford a $500,000 house?
Forth, within a short period of time, many people would find themselves broke again. This is a well documented phenomenon with lottery winners and other people who come into massive windfalls.
Fifth, there is the concept of “moral hazard”. Basically, you are removing many of the disincentives for behavior that can lead people to become poor in the first place.
Finally, as communism has shown us, confiscating wealth and redistributing it to the poor has the unintended consequence of causing people who create wealth to not create it any more. Why open a business or even just put more than the bare minimum amount of effort into something when the fruits will just be taken away and given to someone else.
None of this has anything to do with my point. A million bucks is an enormous pile of cash to me, but not to Bill Gates. An average guy who opens a restaurant is risking a lot more than the mogul who buys a baseball team - in terms of impact to his life if it fails.
Most people are fine with those who truly risk something and get a reward for succeeding. But your average CEO is not like that. More common are CEOs who get hired with large bonuses, screw the stockholders and the employees, and then get fired with more large bonuses. Not to mention boards of directors who get six figure stipends, apparently sleep through board meeting since they vote for the stupidest proposals, and are rarely if ever held to account. These days they don’t even have a lot of stock. Wish I could get that gig.
All this talk about giving money misses the point. The problem today is that all that cash piled up with the rich is not being very productive to the society at large. I get to benefit because some of it got shoveled into the stock market, but not society. Giving a million, or even 100,000 to each person is probably going to give a worse return on investment than letting the rich keep it. A far better one would be to use some of that money for productive investments, like infrastructure, for the country as a whole. That would produce jobs, much better for the poor than a cash infusion, and grow the economy.
San Jose is in the heart of Silicon Valley. Due to budget issues they have stiffed cops, who are departing for better jobs in carload lots, and the crime rate has increased as they have to move specialty detectives onto the streets. More cops would be a lot more beneficial to society than handing out cash.
If the rich aren’t allowed to keep the wealth they create, how will you convince them to create more of it?
You let them keep most of it.
The idea that this is “new” is baffling. Has the OP not heard of Marx? Or Jesus? Wealth inequality has always been a concern.
We all have a potential we can live up to-- a role where we are as productive and self-actualized as possible. Generally, a society wants to facilitate getting people as close to that potential as possible. You want the tall sports lovers on the basketball team, the smart computer geek programming, and the artist who wants an easy job on the side waiting the tables. One complicated reality is that the really fun, interesting and prestigious roles usually call for a lot of talent.
Too much inequality can eventually hinder that, as poorer people become unable to compete, from a very young age, for the resources (education, etc.) they need to realize their potential. You end up with talented people being way under productive and miserable, and the less talented but privileged in jobs they can barely perform.
Ask again when I propose a 99% tax rate. Taxes on the rich did go up, btw. has the world ended yet?
I said each person has a set of goods they have and goods they want. Demands and priorities fall into the wanted goods.
And the free market encompasses all transactions. It’s not just the products you buy. It also encompasses the products that are made. All production is coming out of the same finite pool of resources and people make free market decisions on where resources are used for production. $100K cars wouldn’t be produced if somebody wasn’t paying for them. So when somebody decides to buy a luxury car it does affect how much you pay for a sack of potatoes - and vice versa.
You let him keep part of it. But you make him work for it.
Let’s say a person wants to have a hundred million dollars. If he has a hundred million and you tax at 100%, then he has no motivation to earn more money.
But here’s the kicker. If he has a hundred million and you tax at 0%, then he also has no motivation to earn more money. Undertaxation can strangle ambition just as badly as overtaxation.
So tax him at fifty percent. He loses fifty million dollars but he’s got fifty million left. Now he has a reason to get to work and build up some wealth to get back up to the level he wants to be at.
Think of taxation as the economic equivalent of exercise. Sure it’s a bad idea to work somebody to the point of collapse. But it’s also a bad idea to let somebody sit on the couch all day eating bon-bons. What you want is the medium of putting people through a good hour workout each day so they stay in peak shape.