Why does income inequality matter?

That’s it. That’s my question. I put it in great debates because my understanding is that views differ greatly among liberals and conservatives.

The income doesn’t matter so much as the quality of life issues that such a disparity produces. For example, Outside of major cities with high cost of living, most people can maintain a nice lifestyle on about 40 k a year +10k per dependent. So that gives us 50k which is an easy number to play with. Those making 250k for example make enough to FULLY SUPPORT another four adults and their modest households. Those who make 500k make enough to support 8 other adults, at a million-16 other adults. So those making that million or better a year are able to afford 16 times more than those making 50k, which is not poor by any means.
Above that level the quality of life simply increases on an exponential scale. Many of the truly wealthy make far, far, more than that yearly. This wouldn’t be a big issue if those company heads were ensuring that 50k salary for their low end workers, but many are not even paying half of that. TO make things worse, they ensure those salaries by keeping the rest of the costs as low as possible; often by outsourcing jobs or cutting staff.

Money is just a number. I agree it’s about quality of life issues. Right now almost one in ten people in my state doesn’t have a job, and alot of them are told to suck it up with little or no safety net. That’s a huge hit on quality of life right there. Last I knew almost 50 million Americans don’t have health insurance. You get sick or injured you just have to suffer it out or face life crippling medical bills. What’s that gonna do to your quality of life?

Let’s look at some of the things the government does right though. My location is Michigan so yours may very.

If you have no means of supporting yourself you can get food stamps. You won’t starve.
Kids can draw medicaid so children don’t have to suffer for what they were born into.
Social security, medicare and our taking care of the elderly in general.
Federal student Financial aid, and student loans. Poor? well you can still go to college and if fafsa doesn’t cover you enough then you can get low interest loans to help.
Disability (although the wait times need fixed)

There’s many more. America isn’t epic fail. There’s just a few major things we need to work on to be better.

Would you rather be a poor person in modern-day America, or would you rather be an average person living during the Great Depression or living in a Third World country today? By most quality-of-life criteria, even poorer Americans have it better than plenty of people in other places or times.

The downsides of being poor while others around you are rich include being looked down on because you are poor, envy of what others have, a sense of unfairness, and the perception of being exploited. People are more willing to make sacrifices and live frugally if everyone else is doing so as well, than if they believe their sacrifices are going to enrich the already wealthy.

According to The Economist, the top 1% of taxpayers already pay 40% of all income tax, and the top 10% - those earning over $100K - pay 70%.

Cold comfort when you’re wondering how you’re gonna pay the rent/mortgage, or if you should get that lamp in your breast looked at. I mean even if it is what you think it is you’d never be able to afford treatment.

The altruism inherent in all of us tends to produce an assumption that “everyone should be equal.” Any inequality, including income, results in dissonance because it’s incongruous with a (superficial) sense of fairness.

It has not been my observation that in American society liberals and conservatives differ about whether or not income inequality is wrong, so to speak. There are differences of opinion between the two camps over why it exists, and what should be done for those who are in the lower income groups.

One idea I’ve heard is that when too much money becomes concentrated in the hands of too few, the economy becomes stagnant. That’s because the uber rich don’t spend most of their money… they invest. The lower and middle classes actually spend most of their money, and when they have less and less money to spend (because it concentrates at the top) eventually it’s going to hurt everybody. The stock prices will drop because less stuff is being bought.

And I care about that why? They have the money, they can afford the taxes. Comes with the territory of being wealthy.

Short answer – because the cost of things doesn’t vary based on your income level. Everyone needs food – the rich can buy a lot more of it. Something like 12 million kids went to bed hungry last night. None of them were named Hilton or Rockefeller. Millions put off medical treatment or screenings because they can’t quite swing the payment this month, even though they know that serious illnesses often have dramatically better outcomes if you have early diagnosis and treatment. The cost of education rises stratospherically every year, but education is the single most effective way to move to a higher social class, so its cost leads directly to socioeconomic stagnation. (And indeed, the high cost of education is itself a reflection of high income inequality, because colleges have to pay professors a lot of dough because they could do so well in the private sector; if rich people weren’t so much richer than middle class people, that income disparity wouldn’t be so great, and so college would automatically be more affordable.) Etc.


That’s a silly idea. Investing money doesn’t mean sitting on it. If I buy shares of a company or bonds, they’re going to take the money from the sale and spend it on their operations, or salaries, or something. They’re not going to sit on it if they have any brains at all (and contrary to certain popular ideas, most companies do).

I suspect the major objection to income inequality has to do with the fact that it’s very hard to separate inequality of outcomes from inequality of opportunities. A couple years ago, The Economist suggested criteria that would make income inequality much less objectionable:

The original article is here, although I believe it requires a subscription. For those of you who do object to income inequality, would you still object if the three criteria outlined above were met?

Not at all. Those criteria describe a responsible society that rewards those able to demonstrate their worth. A sort of capitalism that is benevolent to everyone as a whole, rather than rewarding the lucky or most cut-throat.

It is important to remember that the top 1% is so wealthy that they are essentially living by an entirely different set of rules than the rest of society. Money has little or no meaning since they have enough to afford whatever they want, whenever they want it. It’s a means of keeping score perhaps, or something that is an afterthought, an unpleasant accomplice to achieving their next goal; but not really a true factor in most decisions.

Because they’re already funding things and they could easily up sticks and move themselves and their wealth elsewhere.

All the more reason to ensure a more equitable distribution of wealth.

What wealth? Their units of trust in the US government?

How they going to maintain their wealth? Other countries are either generally third world hell holes or more taxed then the US. If they plan to keep doing business in the US they’ll have to keep paying our taxes.

Besides other countries have much higher tax rates then the US. How come the rich don’t mass exodus out of Sweden and leave it poor and destitute?

I’m not sure what you mean by income inequality. I don’t think anyone cares that some people make more than others. Some people care about trends in wealth percentages, where more money is being concentrated in fewer hands, and the middle class is shrinking. Still others care that the shadow cast by institutional racism affects earnings today, despite the supposed equality before the law. Be more specific if you want actual answers.

Because some people fly private planes while others starve to death.

No, and I think we could even eliminate the first one. As long as everyone has adequately what they need, getting richer is not an intrinsic good. It’s irrelevant.

But is the problem inequality, or poverty? Would you feel better if the same number of people were starving to death but fewer people were flying private planes?

But it has been my impression (which may or may not be accurate) that conservatives care less about inequality (as opposed to poverty or absolute quality of life). So, a conservative would be more likelty to support a measure that would benefit everyone but would benefit the rich moreso than the poor (so that everyone is better off in an absolute sense, but the inequality gap is greater).

I believe that there is an optimum amount of income equality. Too much equality and noone has enough money to invest, too little and there aren’t enough people to buy whatever product/service that the rich are making. Also, at some point the masses will say “fuck this shit” and revolt. China and Russia were both feudal economies before they became communist dictatorships.