How to reduce wealth inequality?

[overtone]

Are the 'middle class' really worse off today than in the 50s ?

Yes. In the 50s, despite still paying off WWII and then the Korean War, they could buy the median house and car with standard financing, marry and raise two children, pay for standard health care and all insurance, take two weeks of vacation per year, and retire at age 62 with it all paid for and enough money coming in on average to avoid dependence on charity for the rest of their lives,

 

on one 40 hour/week job paying the median wage.

 

The middle class could pay for a standard four year college education by working during the summers and part time during the school year, graduating in four years with a degree and minimal debt, routinely. The received vocational education for free in the high schools, and through unions on the job.

 

Right now the median wage in most areas of the US is not enough, under standard financial calculations and a 40 hour week, to rent the median two bedroom apartment. The middle class household is supporting itself by 60 - 80 hours of work per week with no actual vacations, handling emergencies by credit card with no savings, and postponing retirement until age 67 or later.

 

The middle class that attempts to work their way through college takes five of six years to graduate from college due to time taken for work, and leaves college with more debt relative to their prospective income than the parents of the 60s put down on their houses relative to their income. They received no vocational education in high school, and must pay out of pocket for tech school training while working.

 

And so forth.

 

The major difference in the economic structure of the US was the higher tax rates paid by the wealthy, and the greater value of the benefits delivered to the lower middle class.

Edited January 15, 2015 by overtone

[Sensei]

The major difference in the economic structure of the US was the higher tax rates paid by the wealthy, and the greater value of the benefits delivered to the lower middle class.

Wrong conclusions.

The major difference in the economic was having your own production, instead of moving production and importing "everything" from China..

 

Moving production to cheaper workers countries was result of optimization performed by companies to satisfy shareholders to EARN MORE (see post #20). Shareholder = in large percentage banks, investment funds, retirement funds,

People that earn too less, can't afford children, have them less than 2, in future will cause other problems- retirement funds won't get their funds from people.

By supporting this optimization to earn more now, retirement funds are cutting branch on which they are sitting in future.

But it's not problem for current management team. They will get bigger salary now. They're plain stupid/greedy/planned action.

 

Another difference is Nixon Shock after '71

http://en.wikipedia.org/wiki/Nixon_Shock

Edited January 15, 2015 by Sensei

[Ten oz]

I don't think the answer here is really that incredibly complicated. The exploitation at any given time of a specific market and or group of people is generally what drives inequality. Here in the U.S. we have a two part problem.

As part of his too marginal tax cut in 1981 Reagan allowed for stock options given by companies to employees (CEOs) not to be taxed as regular salary. With capital gains being so much lower than income tax corporations quickly moved to stock option based salaries and CEO compensation skyrocketed. That is the first problem. Companies are managed by people who are more interested in stock value than long term stability. That encourages more risky behavior and stronger hunger to exploit every exploitable thing.

The second problem is free trade. Despite countries like the United States having reasonable labor laws we allow our corporations to exploit countries that don't. So many of the luxuries enjoyed by the more economically stable countries come from the exploitation of poor countries where workers have fewer rights. This helps drive the stock market price which in turn compensates the CEOs. So the system is set up as a race to the bottom. Where can companies get to cheapest materials, pay employees the least, pay the least taxes, and etc.

Solution; tie stock compensation value to income tax for corporation employees and extend federal workers rights of a corporations home country to all of that corporations employees regardless of where they are located. Short term growth may slow but long stability will increase.

[Sensei]

I don't think the answer here is really that incredibly complicated. The exploitation at any given time of a specific market and or group of people is generally what drives inequality. Here in the U.S. we have a two part problem.

As part of his too marginal tax cut in 1981 Reagan allowed for stock options given by companies to employees (CEOs) not to be taxed as regular salary. With capital gains being so much lower than income tax corporations quickly moved to stock option based salaries and CEO compensation skyrocketed. That is the first problem.

It's not problem. It's method to bond manager/CEO with the company they work. This way CEO wants the best to his company, so price of stocks is growing. Tax from stocks is typically paid when they're sold. Options for stocks are locked for certain time (half year, year, 2y), disallowed to be sold. If taxes would be increased for selling stocks it would have to done for all stock selling not just made by CEO/managers. That would ruin stock markets and decrease fluidity. Such law would cause meltdown.

Here there is law that when insider is selling stocks, he/she must inform market in official info within 3 days. After such info there is usually large drop in price. Selling by CEO means there is something wrong with company that he/she doesn't want anymore have stocks of his/her company. CEOs/managers avoid it all the way they can.

 

Not once stocks were offered to average employee. What they were doing- instantly selling them!

 

In newly born companies that doesn't earn yet, stocks instead of salary is very common practice. f.e. Facebook, everybody who was first on board received shares, long time prior public listing. People work for free, for share in company they believe will be successful in future.

 

Quantity of CEOs is very small. Count how many companies you have listed on stock markets, and you have quantity of public companies CEOs..

Let owners of these companies decide how much pay and what method do it with their managers. It's thing between owners and them.

 

Companies are managed by people who are more interested in stock value than long term stability.

 

Giving them stocks has to make them care about future of company.

 

Good manager doesn't sell his/her stocks. He/she is taking credit in bank giving stocks as guarantee.

 

Solution; tie stock compensation value to income tax for corporation employees and extend federal workers rights of a corporations home country to all of that corporations employees regardless of where they are located.

First of all, such company would bankrupt soon, and all would be unemployed, either in US & foreign. Because it won't be able to compete with prices offered by foreign only companies.

Second, US law can't be extended to foreign countries. They have their own laws.

Third, it's easy to bypass. Just make foreign company and buy from it ready product. Rights would not be able any way to be extended to foreign company workers. It's completely separate entity.

[overtone]

The major difference in the economic was having your own production, instead of moving production and importing "everything" from China..

That is not structural difference, but a consequence - a consequence of the structural changes brought about politically over the years during and after the Vietnam War, with the breakover point around 1982.

 

 

 

. If taxes would be increased for selling stocks it would have to done for all stock selling not just made by CEO/managers. That would ruin stock markets and decrease fluidity. Such law would cause meltdown.

Increasing the capital gains tax would indeed push stock prices lower.

 

That would probably harm the rich, and probably benefit the middle class. Problem?

 

Taxing things like stock options and bonuses as income, and restoring the New Deal income tax structure, would almost certainly reduce the significance of predation - driving stock prices up at the expense of everything else, financial manipulations designed to add marginally to short term management compensation - in corporate management. How can that be a bad idea?

Edited January 15, 2015 by overtone

[Ten oz]

@ Sensei, stock market price and company health are not equals. Assuming self interest will translate into best practices for the long term is a fallacy. One that following the collapse of the world economy in 2008 former Fed chair Greenspan admitted to.

http://www.nytimes.com/2008/10/24/business/economy/24panel.html?_r=0

 

Countries can not extend their laws to other countries but they can prohibit product sold in their country that are produced under practices they do not approve. The agruement against has always existed. Complaints about hurting business were around when slavery and child labor were end too.

[Sensei]

Increasing the capital gains tax would indeed push stock prices lower.

 

That would probably harm the rich, and probably benefit the middle class. Problem?

Everybody savings for pension after retirement are right now invested in stocks by retirement funds..

Individual investors are now margin in western countries. Majority are funds.

You can be connected to funds in a way you don't realize.

f.e. your bank where you have account could buy bonds of, or lend money to funds.

If too many funds will have serious problems, and they will collapse, your bank can also bankrupt..

And money on account above guarantee will be gone, like in Cyprus.

They sell/buy bonds every day, it's fluid.

Edited January 15, 2015 by Sensei

[MigL]

Come-on are you guys really comparing the lifestyles of the 50s to today ?

Sure you could afford to live on one job and raise two kids and buy a house and car. But what un-needed luxuries did you have ?

 

How many large ( 50 "+ ) flat screen TVs are in your household ? How many cell phones and plans are in your household ? How much is your internet/cable/satellite/movie network ?How many times a week do you and your family go out for dinner ? How many cars do you own ? How much un-needed food/snacks do Americans buy ( obesity levels ) ? Etc.

 

If you're going to compare incomes and costs of the 50s to today, you have to consider the excesses of today in costs also.

[John Cuthber]

Come-on are you guys really comparing the lifestyles of the 50s to today ?

Sure you could afford to live on one job and raise two kids and buy a house and car. But what un-needed luxuries did you have ?

 

How many large ( 50 "+ ) flat screen TVs are in your household ? How many cell phones and plans are in your household ? How much is your internet/cable/satellite/movie network ?How many times a week do you and your family go out for dinner ? How many cars do you own ? How much un-needed food/snacks do Americans buy ( obesity levels ) ? Etc.

 

If you're going to compare incomes and costs of the 50s to today, you have to consider the excesses of today in costs also.

The point is not that I can afford a big telly even though my parents in the 50s couldn't. (That's due to technological progress and is a bit of a red herring)

The point is that the chief executive could afford 300 times as many big tellies as I can.(Actually more because we have comparable fixed costs so his disposable income is more than 300 times as great)

Why is that?

Is that because he is doing 300 times as much good in the world as I am?

Or is it just because he's a greedy bastard who can get away with it?

[Ten oz]

Come-on are you guys really comparing the lifestyles of the 50s to today ?

Sure you could afford to live on one job and raise two kids and buy a house and car. But what un-needed luxuries did you have ?

 

How many large ( 50 "+ ) flat screen TVs are in your household ? How many cell phones and plans are in your household ? How much is your internet/cable/satellite/movie network ?How many times a week do you and your family go out for dinner ? How many cars do you own ? How much un-needed food/snacks do Americans buy ( obesity levels ) ? Etc.

 

If you're going to compare incomes and costs of the 50s to today, you have to consider the excesses of today in costs also.

This, of course, assumes you were a white male in the 1950's.

[MigL]

Now you're gonna bring race into this, Ten oz ?

Middle class is middle class, no matter what the race.

 

The point was, John, that it only seems like the middle class is a lot worse off because we are addicted to unnecessary luxuries that our parents made do without in the 50s.

To them it was more important to raise kids provide them homes and education, to us it seems the 'luxuries' are more important and then we complain we can't afford the necessities.

But this has nothing to do with stratospheric CEO salaries.

[John Cuthber]

Now you're gonna bring race into this, Ten oz ?

Middle class is middle class, no matter what the race.

 

The point was, John, that it only seems like the middle class is a lot worse off because we are addicted to unnecessary luxuries that our parents made do without in the 50s.

To them it was more important to raise kids provide them homes and education, to us it seems the 'luxuries' are more important and then we complain we can't afford the necessities.

But this has nothing to do with stratospheric CEO salaries.

OK, so your answer to

"How to reduce wealth inequality?"

is

"But this has nothing to do with stratospheric CEO salaries."

 

Check again, I think you will find that's exactly what it's to do with.

[iNow]

The point was, John, that it only seems like the middle class is a lot worse off because we are addicted to unnecessary luxuries that our parents made do without in the 50s.

Except, this is plainly false, a point which has even already been evidenced previously in this very thread.

 

http://www.ritholtz.com/blog/2013/07/economic-inequality-is-not-an-accident-it-was-created/

Since the 1960s, tax rates on very high incomes have been slashed dramatically, starving public investments in schools and roads and everything else needed to build our economy <...> The laws weve created to govern globalization have protected corporate interests, but done nothing for American workers. Instead, weve allowed workers rights to be systematically dismantled, both here and abroad.

http://www.forbes.com/sites/laurashin/2014/01/23/the-85-richest-people-in-the-world-have-as-much-wealth-as-the-3-5-billion-poorest/

In the US, the wealthiest one percent captured 95 percent of post-financial crisis growth since 2009, while the bottom 90 percent became poorer.

http://www.usnews.com/news/articles/2014/08/27/wages-have-fallen-for-almost-everyone-this-year

Had wage inequality not risen between 1979 and 2007, middle class incomes would have been about $18,000 higher in 2007.

http://www.economist.com/news/finance-and-economics/21631129-it-001-who-are-really-getting-ahead-america-forget-1

From the beginning of the Depression until the end of the second world war, the middle class share of total wealth rose steadily <...> From the early 1980s, however, these trends have reversed. The ratio of household wealth to national income has risen back toward the level of the 1920s, but the share in the hands of middle-class families has tumbled

http://www.sentierresearch.com/pressreleases/Sentier_PressRelease_PostRecessionaryHouseholdIncomeChange_June2009toJune2013_08_21_13.pdf

real median annual household income, while recovering somewhat from the low-point reached in August 2011, has fallen by 4.4 percent since the economic recovery began in June 2009. Adding this post-recession decline to the 1.8-percent drop that occurred during the recession leaves median annual household income now 6.1 percent below the December 2007 level. <...> Compared to January 2000, the beginning point for our monthly statistical series, median annual household income is now lower by 7.2 percent. <...> Based on our data, almost every group is worse off now than it was four years ago. <...> Real median annual household income declined significantly for both family and nonfamily households. <...> Real median annual household income declined more significantly for younger households and those with a householder between 55 and 64 years of age than for other age groups. <...> Declines in real median annual household income are noted regardless of the level of educational attainment.

[Phi for All]

The point was, John, that it only seems like the middle class is a lot worse off because we are addicted to unnecessary luxuries that our parents made do without in the 50s.

To them it was more important to raise kids provide them homes and education, to us it seems the 'luxuries' are more important and then we complain we can't afford the necessities.

 

And our parents were accused of being addicted to unnecessary luxuries their parents made do without in the 30s. But 1950 or 1930, middle class wages were still tied to productivity. But they haven't been since the 70s, when the shift came to start reducing middle class wages, and give that extra money to the guys who came up with the idea to reduce middle class wages, the CEOs.

 

The same CEOs that have taken our once robust economy and sold it overseas, pocketing even more profit and sheltering it from taxation.

[overtone]

Everybody savings for pension after retirement are right now invested in stocks by retirement funds..

Individual investors are now margin in western countries. Majority are funds.

You can be connected to funds in a way you don't realize

What's your point? Are you claiming that increasing capital gains taxes, which primarily affects rich people's incomes, would not have much effect on the stock market, because pension funds etc own most of the stock and don't pay capital gains taxes?

 

Then there is even less down side.

 

 

 

 

Come-on are you guys really comparing the lifestyles of the 50s to today ?

No, that was you started that. The main thread is about inequality, not absolute income or wealth.

 

Sure you could afford to live on one job and raise two kids and buy a house and car. But what un-needed luxuries did you have ?

Buying a house and car and raising a family on one completely ordinary, run of the mill job, is a pretty big deal when you can't do it - which is increasingly the case, for the middle class in the US.

But if you insist on pushing this: Indoor plumbing, a whole suite of modern appliances, public libraries, vacations and leisure time, frequent visits to the doctor, retirement at age 62, and a four year college education completely paid off at graduation. For starters.

 

real median annual household income, while recovering somewhat from the low-point reached in August 2011, has fallen by 4.4 percent since the economic recovery began in June 2009.

All statistics that use household income significantly overestimate the prosperity of the US middle class - they hide the hardships of multiple jobs, extended working hours, loss of domestic services, etc.

Edited January 16, 2015 by overtone

[Sensei]

What's your point? Are you claiming that increasing capital gains taxes, which primarily affects rich people's incomes, would not have much effect on the stock market, because pension funds etc own most of the stock and don't pay capital gains taxes?

 

Then there is even less down side.

 

I said that collapse of stock markets would wipe out your future retirement pension..

Increase of capital taxes will move capital to foreign stock markets, decrease fluidity, and might ignite meltdown/crisis.

[iNow]

Yet, when viewed from another perspective, one that suggests we perhaps have a deeper societal need to change our priorities and rebalance our regulatory focus, we see the following:

 

http://www.marketplace.org/topics/wealth-poverty/poor-children-new-majority-public-schools

We’ve passed a sobering milestone in this country. For the first time in at least 50 years, the majority of students in public schools are considered poor. <...> We tend to think of poverty as a problem concentrated in rural areas or the inner city, he says. Those boundaries are falling away.

 

“Even in the suburbs, low-income students are now 40% of the student population in the public schools,” Suitts says. “It’s everyone’s problem.”

.

 

How many large ( 50 "+ ) flat screen TVs are in your household ? How many cell phones and plans are in your household ? How much is your internet/cable/satellite/movie network ?How many times a week do you and your family go out for dinner ? How many cars do you own ? How much un-needed food/snacks do Americans buy ( obesity levels ) ? Etc.

 

If you're going to compare incomes and costs of the 50s to today, you have to consider the excesses of today in costs also.

http://equitablegrowth.org/2015/01/16/scene-setting-policy-discussion-american-economy-stumbles/

Yes, today Americans have remarkable access to incredibly cheap electronic toys. But those are a small part of expenditure, and the costs of securing the standard indicia of middle-class life–a home in a safe neighborhood with good schools and a short commute, college for the children, assurance that a major illness will not lead to bankruptcy, a secure and reasonably-sized pension–have all become more costly relative to incomes. This shift is astonishing: For 150 years before 1979 Americans had confidently expected that each generation would live roughly twice as well in a material sense as its predecessor, not find itself struggling against the current to stay in the same place.

<snip>

The best that we can say is that the rest of America is at best treading water relative to the same percentile slots in the income and wealth distribution a generation ago. They are no richer, more unequal, and less secure along multiple dimensions then their predecessors were a generation ago.

[overtone]

I said that collapse of stock markets would wipe out your future retirement pension..

Not the stuff in bonds and CDs. Not a defined benefits one - the common middle class sort, not too long ago when wealth was not so unequal.

 

How many middle class people even have a pension? Most do not.

 

 

 

 

Increase of capital taxes will move capital to foreign stock markets, decrease fluidity, and might ignite meltdown/crisis

Maybe. It might do the opposite, also - and we are in a crisis already, at least most of us. So that would be better for the US middle class than the current accelerating inequality of wealth created by refusing to tax rich people on their major sources of income.

 

The last and current crisis has been a bottom 90% one - the rich were and are largely unaffected, and their increasing power and wealth have proved a burden on the rest. A crisis that mostly afflicted the rich would be a balancing event - the economy as a whole would almost certainly benefit.

Edited January 19, 2015 by overtone

[Sensei]

How many middle class people even have a pension? Most do not.

In Europe, everybody, no matter if low, middle, or high class have pension after retirement.. The lowest one pension here is 234 usd/month (277 usd/m before Ukrainian crisis) (it's not constant, each year revalorization).

 

You would have to not have legal job, or have no job at all ever, to not have pension.

 

Maybe. It might do the opposite, also - and we are in a crisis already, at least most of us. So that would be better for the US middle class than the current accelerating inequality of wealth created by refusing to tax rich people on their major sources of income.

You're completely ignoring any argumentation. Taxing rich people won't change anything.

Owners of companies will simply increase their salary to compensate higher taxes.

 

If we have tax 20% and person is earning gross 100,000 per month. tax 20% from 100k is 20k. Net 80k.

Now if government will increase tax to f.e. 40%, it doesn't necessarily mean that that person will get 60k.

Owner of company (especially if they're the same person) and that person will renegotiate contract and increase gross to 133k, and tax 40% will be 53k, and net 80k.

What does it means to ordinary employee? That there is less money left for them, because government took more.

 

For any action, there is counter reaction..

 

The last and current crisis has been a bottom 90% one - the rich were and are largely unaffected,

Do you even saw how much B.Gates, W.Buffett lost during 2008 crisis?

It was counted in 10 digits numbers.

 

A crisis that mostly afflicted the rich would be a balancing event - the economy as a whole would almost certainly benefit.

As I said, rich people don't have money, they have shares...

 

If you want Bill Gates lost all his richness, you want to destruction of his companies, and drama of hundred thousands employees.

Edited January 19, 2015 by Sensei

[iNow]

In Europe, everybody, no matter if low, middle, or high class have pension after retirement.. The lowest one pension here is 234 usd/month (277 usd/m before Ukrainian crisis) (it's not constant, each year revalorization).

 

You would have to not have legal job, or have no job at all ever, to not have pension.

It's different in the US.

 

http://money.usnews.com/money/personal-finance/articles/2014/10/31/how-seriously-should-you-take-retirement-savings-calculators

According to the National Institute on Retirement Security, 45 percent of working-age households have no retirement savings at all. Among people 55 to 64, average household retirement savings total only $12,000. <...> The average Social Security payment for retired workers in 2014 is about $1,300. For 22 percent of married couples and 47 percent of single people, Social Security accounts for 90 percent or more of their income in retirement

You're not completely ignoring any argumentation. Taxing rich people won't change anything.

It actually would, though. Simply claiming otherwise doesn't magically make that untrue. These revenues would reduce the deficit, allow for greater investment in social goods like healthcare, education, retirement, infrastructure, and more.

 

What does it means to ordinary employee? That there is less money left for them, because government took more.

False dichotomy. It's not as if our only choices are "the rich pay a more reasonable tax rate OR they pay more money to their employees." There's also the option (the one we actually see playing out every single day in reality) that they just keep that money and the inequality we've been discussing here worsens.

 

Do you even saw how much B.Gates, W.Buffett lost during 2008 crisis?

It was counted in 10 digits numbers.

And they've more than made it back. The same cannot be said about those in the bottom 90%.

 

http://blogs.wsj.com/economics/2013/09/10/some-95-of-2009-2012-income-gains-went-to-wealthiest-1/

Research released this month shows that the incomes of the well-off have largely climbed back from the toll of the most recent recession while those of the poor have yet to start recovering.

<snip>

All told, average inflation-adjusted income per family climbed 6% between 2009 and 2012, the first years of the economic recovery. During that period, the top 1% saw their incomes climb 31.4% — or, 95% of the total gain — while the bottom 99% saw growth of 0.4%.

 

–Last year, the richest 10% received more than half of all income — 50.5%, or the largest share since such record-keeping began in 1917. Here is how the top earners break down: Top 1%: incomes above $394,000 in 2012; Top 5%: incomes between $161,000 and $394,000; Top 10%: incomes between $114,000 and $161,000.

 

–The housing and stock markets give and they also take away. The one-percenters saw their incomes slide 36.3% during the 2007-2009 recession; incomes of the 99-percenters fell 11.6% during the downturn. “The fall in top decile income share from 2007 to 2009 is actually less than during the 2001 recession from 2000 to 2002, in part because the Great Recession has hit bottom 99% incomes much harder than the 2001 recession, and in part because upper incomes excluding realized capital gains have resisted relatively well during the Great Recession,” Mr. Saez wrote.

If you want Bill Gates lost all his richness, you want to destruction of his companies, and drama of hundred thousands employees.

While your current argument is already pretty weak, I would like to share with you that it only gets weaker than it already is when you put forth strawmen like these.

[overtone]

In Europe, everybody, no matter if low, middle, or high class have pension after retirement..

Not in the US.

 

 

 

Taxing rich people won't change anything.

Stopping taxing them did. We used to tax them much more heavily, and that prevented the growth of income and wealth inequality we see today. Why wouldn't that work like it always did before?

 

 

 

Owners of companies will simply increase their salary to compensate higher taxes.

- - - -

What does it means to ordinary employee? That there is less money left for them, because government took more

 

Bull. The CEOs and top execs in the US are paying themselves as much as they can, and paying their employees not a nickel more than they have to, right now.

 

In the past taxing rich people more heavily tended to increase employee wages - since there was so much less net gain in taking immediate compensation, rich people were motivated to gain wealth by making their company larger and more capable and staffed with the best employees - those were all tax deductions, and they were increases in the owner's wealth.

 

 

Do you even saw how much B.Gates, W.Buffett lost during 2008 crisis?

It was counted in 10 digits numbers.

How much of it stayed gone? They have more wealth now than they did then. And executive compensation has kept rising, right through. Where did you think the recent surge in inequality came from?

 

 

 

 

As I said, rich people don't have money, they have shares...

Then what's the problem? No income, no taxes. As long as they don't take capital gains on them or otherwise convert them into somebody's income, the capital gains and income taxes et al would not apply.

Edited January 19, 2015 by overtone

[iNow]

If Sensei is in Europe, then he's also afforded many more worker protections and regulations than we see here in the US. This will be especially true if he's in Germany or France where workers councils are involved.

[Sensei]

It's different in the US.

 

http://money.usnews.com/money/personal-finance/articles/2014/10/31/how-seriously-should-you-take-retirement-savings-calculators

"The average Social Security payment for retired workers in 2014 is about $1,300. "

 

I would dream about $1300 retirement pension.

I never had such salary.

Maybe because I don't care much about money.

f.e. everything of what I earned in the last months I spend on lab equipment (that'll never return, so it was not investment).

 

It actually would, though. Simply claiming otherwise doesn't magically make that untrue. These revenues would reduce the deficit, allow for greater investment in social goods like healthcare, education, retirement, infrastructure, and more.

You're dreaming! Your government, if you're in US, is "investing" in murdering people around the world. In wars in Afghanistan, Iraq, etc. etc.

 

Financial cost of the Iraq War:

http://en.wikipedia.org/wiki/Financial_cost_of_the_Iraq_War

 

"The costs of the 2003-2010 Iraq War are often contested, as academics and critics have unearthed many hidden costs not represented in official estimates. The most recent major report on these costs come from Brown University in the form of the Costs of War, which totaled just over $1.1 trillion. "

 

That's where is your money that you paid in taxes went. Not some "health, education, retirement, infrastructure, and more."..

 

False dichotomy.

On your side, not mine.

You and overtone are suggesting to increase taxes to rich people to fight against inequalities. It actually won't help poor people any way.

It's impossible from mathematics point of view. Simply because rich people are very few, and have no money but shares of their companies.

The only way to decrease their wealthiness would be to nationalize (stealing) their companies.

So, instead of thinking how to make rich people harder to earn money, you should think about how to make easier to earn more money by poorest instead.

There is plentiful of homeless people in New York and other large cities, and plentiful of bank owned and then ruined homes that they took because owners couldn't pay rent/loan..

Instead of making 2+2=4, you're thinking about something that cannot work successfully. Give homeless people house! It doesn't cost ANYTHING.

 

One way is to increase minimum wage each year.

 

USA has not bad minimum wage, as far as I can see (from my own point of view).

 

It's not as if our only choices are "the rich pay a more reasonable tax rate OR they pay more money to their employees." There's also the option (the one we actually see playing out every single day in reality) that they just keep that money and the inequality we've been discussing here worsens.

 

It's getting worser because typical average person is spending all/more than what he/she is earning and saving nothing. While typical rich person is spending less than what he/she is earning/receiving in stocks.

 

It cannot be stopped or reversed any democratic way in capitalistic environment.

 

Then what's the problem? No income, no taxes. As long as they don't take capital gains on them or otherwise convert them into somebody's income, the capital gains and income taxes et al would not apply.

 

There is no problem.

But still it means rich people are getting richer, even not doing anything. And this is unstoppable in any democratic way.

See, rich person who owns stocks, can take loan in bank giving stocks as guarantee,

then use money from credit to buy even more stocks (or living).

Loan is paid from dividend.

This can be repeated again and again.

As long as it's in constantly growing stock price environment.

Edited January 20, 2015 by Sensei

[iNow]

You're dreaming! Your government, if you're in US, is "investing" in murdering people around the world. In wars in Afghanistan, Iraq, etc. etc.

Financial cost of the Iraq War:

Spending on wars is a total red herring. Would you like to introduce any other logical fallacies in support of your stance, or can your claims stand on their merits and be defended reasonably? Thus far, we're seeing a lot of the former and almost none of the latter.

 

My claim was simple. Higher taxes on the top 1%, taxes that are more inline with what we saw for generations and during times of amazing growth, would result in higher revenues, lower deficits, and greater opportunity to invest in social safety nets and other services that would reduce these problems, things like education, healthcare, and infrastructure... The last of which would simultaneously trigger tremendous job growth as workers came in to support those infrastructure investments.

 

You and overtone are suggesting to increase taxes to rich people to fight against inequalities. It actually won't help poor people any way.

It's impossible from mathematics point of view.

You seem to have ignored all of the data I already shared in this thread, as the vast majority of what you just said is demonstrably false and has been evidenced as such right here.

 

The only way to decrease their wealthiness would be to nationalize (stealing) their companies.

Again, demonstrably false... And on top of that, there's that straw man again. This is a discussion about reducing inequality and addressing the self-reinforcing negative social issues that result, not about reducing the wealth of the extremely wealthy top 85 individuals in the world who own more than the bottom 3.5 billion people combined.

 

http://www.cnbc.com/id/101348398

 

Instead of making 2+2=4, you're thinking about something that cannot work successfully. Give homeless people house! It doesn't cost ANYTHING.

Well, actually it does cost something, but I agree with you that it's cheaper to simply offer free homes to the homeless than to continue operating all of the other myriad programs in isolation when trying to help the homeless. It's inefficient and absent critical synergies.

 

http://www.washingtonsblog.com/2014/08/studies-cheaper-give-homeless-shelter-food-health-care-job-training-nothing.html

 

One way is to increase minimum wage each year.

USA has not bad minimum wage, as far as I can see (from my own point of view).

An increased minimum wage would definitely help, especially one that scaled with the cost of living and productivity gains. Your chart is interesting, too, but unfortunately the comparison is largely meaningless until you take the next step of accounting for differential cost of living, available social programs, job openings, and philanthropic activity in each nation.

 

It's getting worser because typical average person is spending all/more than what he/she is earning and saving nothing.

This completely misses the point about WHY people aren't saving. They can't. Their cost of living is higher than their wage. Many people are working two and even three jobs and STILL struggling to survive. This is not about making poor choices and blowing money on needless expenditures instead of saving as you continue to suggest.

 

It cannot be stopped or reversed any democratic way in capitalistic environment.

Rubbish. Of course it can. It's politics and money in politics preventing change from happening, not some abstract idealized notion of "capitalism."

 

There is no problem.

The fact that people continue to claim this despite the robust, far reaching, and overwhelming evidence to the contrary speaks strongly to the inherent ridiculousness of this assertion. Edited January 20, 2015 by iNow

[Sensei]

Spending on wars is a total red herring. Would you like to introduce any other logical fallacies in support of your stance, or can your claims stand on their merits and be defended reasonably? Thus far, we're seeing a lot of the former and almost none of the latter.

What I said is neither "red herring", nor "logical fallacy".

 

You claimed that your government would use wisely money got from additionally introduced tax. Pretty naive!

I claim that they would waste it (or steal it in devious way). And I gave example how they're wasting it in the past..

 

"Learn from history, to not repeat mistake".

 

My claim was simple. Higher taxes on the top 1%, taxes that are more inline with what we saw for generations and during times of amazing growth, would result in higher revenues, lower deficits, and greater opportunity to invest in social safety nets and other services that would reduce these problems, things like education, healthcare, and infrastructure... The last of which would simultaneously trigger tremendous job growth as workers came in to support those infrastructure investments.

Yes, I understand what you claimed. And I overthrow it with extremely sad example. Your deficit is in pocket of weapon making companies and bankers now.

 

Which years in history you have in mind while saying "taxes that are more inline with what we saw for generations and during times of amazing growth"?

 

As far as I can see, since at least 1945 it's steady oscillating between 15-20% (but it has no split to brackets)

 

This graph has:

 

 

But it's just one year, and pretty modern 2000. And the richest are paying the most in this graph.

 

I found this:

 

Do you think this in fair? 90% tax for the richest? (I never thought I will be "advocate" of rich people.... )

 

This completely misses the point about WHY people aren't saving. They can't. Their cost of living is higher than their wage. Many people are working two and even three jobs and STILL struggling to survive.

Well, I said "average person".

I would not say "average person" about somebody that you described above.

I never meet somebody who would have 2 jobs (except doctors), not to mention 3 jobs. How do they do it? Day has 24 hours. And regular job takes 8h.

 

Here when somebody is offering too low wage to survive in single job (which means minimal wage), people refuse taking such job - it would be instant spiral to financial troubles. It's the case for foreigners that have to rent apartment in city. Renting apartment one room + kitchen costs 1200-1300 per month, minimal wage is 1750 or so, and food price is 325. Left 225 = 60 usd equivalent.

 

This is not about making poor choices and blowing money on needless expenditures instead of saving as you continue to suggest.

Everybody is judging from their perspective, from their experience..

Edited January 20, 2015 by Sensei