How to distribute wealth equally?

Discussion in 'Business & Economics' started by Saint, Feb 2, 2017.

  1. billvon Valued Senior Member

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    21,609
    Even then there will be serious disparities. There is no force in capitalism that will equalize everyone's salaries exactly.
     
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  3. kx000 Valued Senior Member

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    Democracy is truly the majority, why allow the 1% to exist?
     
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  5. billvon Valued Senior Member

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    ?? Democracy is not "the majority." Democracy is giving everyone a say, even if they are not in the majority.
    Why allow the poor to exist? Why allow whites to exist? Why allow blacks to exist?

    Because we have laws that protect the individuals in this country, basically.
     
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  7. Dinosaur Rational Skeptic Valued Senior Member

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    To require equal wealth or equal income are impractical & unethical goals.

    A successful entrepreneur pays salaries & provides services with less overhead than that inherent in a socialist/communist economy.

    Why should such an individual or corporation not have more income/wealth than other individuals or business entities?
    A tyrannical government with few checks & balances is required to avoid an underground or black market economy.

    A government seems necessary to provide criminal & civil justice systems. Most other activities do not seem essential.
    If all are guaranteed equal wealth and/or equal income, what incentive would the more competent have to use their abilities?​

    Note that the so called robber barons of the 1800's created an economic engine which benefited the typical farmer or factory worker.

    If you do not believe the above, find a reprint of a Sears-Roebuck catalog dated between 1890 & 1910.​

    I have one from 1909. It caters to typical farmers & factory workers. The items available at prices they could afford are likely to amaze you.

    It is evidence of an amazing increase in standard of living compared to that of the early 1800's. That era was close to being a laissez- faire capitalist economy.
    John D. Rockefeller is often mentioned as a robber baron who exploited his monopoly position in the petroleum industry.

    His competitors suffered, but his customers should have been happy with his activities.
    In his era, kerosene (aka coal oil) was a critical commodity for small businesses & home owners/renters.

    It was used for both heat & light.

    Rockefeller reduced the price by over 50%​
     
  8. Gawdzilla Sama Valued Senior Member

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    I see why a lot of you are broke.
     
  9. iceaura Valued Senior Member

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    If they don't have to live anywhere in the meantime.
    And their wages track the same inflation that housing prices track.
     
  10. Gawdzilla Sama Valued Senior Member

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    3,864
    They could do it, they'd just be effectively paying two rent payments each month. Takes a healthy income to do that. Our rent is our largest single outlay.
     
  11. Seattle Valued Senior Member

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    8,807
    Most people do have enough to survive. Why would we want to distribute wealth equally?

    The problem isn't that the top wealthy people have more than the middle class people. The problem is that more people aren't in the middle class.
     
  12. gamelord Registered Senior Member

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    673
    There aren't middle class, cause the wealthy are hording it all.
     
  13. CptBork Valued Senior Member

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    6,460
    No, that money will just sit in the ground not being invested. Existing assets won't be leveraged to finance new production. Confiscate those assets, and you end up with Venezuela.

    Totally different times, technology and circumstances.

    In that case, why not tax everyone who can afford it at 90% after basic expenses are covered? I can't think of a society where that's ever worked since the invention of electronic television.

    Bingo. Why not start by closing all the existing tax loopholes? 90% of nothing is still nothing, you need to identify some taxable revenue first. As far as I understand it, those loopholes exist so as to encourage companies to rent a broom closet, call it their international headquarters and then pay all their taxes from international profits to the country hosting the broom closet. Maybe instead, tax all corporate profits earned in the US regardless of where the company is headquartered, and eliminate income tax on those profits when they're cashed out so they're only taxed once? That would also encourage companies to re-invest their US operational profits back into the US economy so as to avoid paying tax, whereas investing in operations in France would give them no such shield. Countries like France can do the same with companies that sell things on their own soil, etc., so the ultimate losers would not be major economies, but rather worthless plots of sand like the Caymans and Panama.
     
  14. Seattle Valued Senior Member

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    8,807
    Except...that's not true.
     
  15. iceaura Valued Senior Member

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    30,994
    Why would that happen? In normal and universal historical circumstances, money sits around more when it's in large piles, not smaller ones.
    OK. That's a start.
    Then boost the upper bracket income tax rates, enough to prevent growth in inequality from accelerating.
    Because that would be stupid, counterproductive, and contrary to the whole purpose of a progressive income tax.
    They look pretty similar. So you think the tax cuts for the rich being immediately followed by quickly burgeoning inequality and stagnation of the lower 2/3 of the economy, exactly as predicted by modern economic theorists and visible in the historical record of other places, was a coincidence?
    Talking about different times, places, technologies, and circumstances - - - - -
    Besides, more likely you'd end up with Cuba instead of Haiti. Only much nicer, because no blockade by the colossally powerful nearby.
    Assets are leveraged to finance new production in response to demand, not supply, and as efforts of the asset holder. By piling up all the wealth in a few barns, one throttles demand. By sharply reducing the number of asset holders, one restricts the available effort and ideas and new projects. The economy stagnates - and this is visible: people get shorter, live sicker, die sooner.
    In which case they could afford a nicer house with a 30 year mortgage, or pay the same house off in ten or eleven years with extra payments on a fifteen year fixed - come out about the same, and live better meantime.
     
  16. billvon Valued Senior Member

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    21,609
    I think the only problem with the wealth gap in the US is at the bottom end of the spectrum. There are people who are so poor they can't afford medical care, basic education and housing. This not only hurts them, it hurts the economy in general - because they have less money to spend and so contribute less to the economy. And their lack of medical insurance means they use ER's instead of primary care doctors, and then they don't pay - which hoses everyone.

    I could care less if one guy in the US has a million times more than I do. He's not hurting anyone, and since money isn't a zero sum game, it's not like he's keeping money away from anyone else. I care a lot more that one guy (many guys actually) have thousands of times less than I do. And that's the problem we should be working on.
     
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  17. iceaura Valued Senior Member

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    30,994
    The degree of wealth and income inequality currently suffered by the US is harmful regardless of the absolute levels of wealth and income involved.

    That is a convergent observation of many and basically unrefuted researchers in a variety of fields, from economics to public health to IQ to height (every field that includes a measure of an established proxy for human well-being, such as height and lifespan, has found the same correlation at some level of strength- here's a famous one: https://en.wikipedia.org/wiki/The_Price_of_Inequality )
    Among the several and still disputed ways in which inequality in itself is thought to do its measured and observed harm:

    -He is pricing common resources out of range - land, water, political power, medical care, educational services, wilderness and the like, etc. Examples: shoreline, political attention, boutique medical care.

    -He is sequestering and controlling larger percentages of the total product than his contribution to the total productivity earns - (this basic violation of free market fundamentals results in others being diverted from their own greatest contributions, in pursuit of small fractions of his patronage and in comparatively minor service to his interests. An economy of servitude to the whims of a small aristocracy is less productive - in all ways - than one of more diversified and various efforts or interests).

    -He and his fellow elites are increasingly and disproportionately vulnerable to mental illness of a particular kind long recognized but only recently described technically or scientifically - a crippling of one's ability to observe and reason and engage in human discourse relative to the real world. This results in important governing and resource management decisions being made by the mentally unfit, to the harm of many and the society as a whole.
    https://www.theatlantic.com/magazine/archive/2017/07/power-causes-brain-damage/528711/
    http://www.clinmed.rcpjournal.org/content/8/4/428.full.pdf

    Mind, the harm is observed. Objections to various of the proposed explanations join arguments over mechanisms, not consequences or outcomes.
     
    Last edited: Jul 13, 2018
  18. iceaura Valued Senior Member

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    30,994
    Side point: you are talking about a majority of the families with children in the US. This fraction you describe as "the bottom end", the people who cannot afford the medical care, education, and housing considered normal in the US in 1975, say, or France and Germany and Norway right now, includes a majority of the parents with children.
    Depending, of course, on what you mean by "'afford". I interpret the word as "can reliably pay for using their own income and wealth, without charity or debt peonage".
     
  19. Seattle Valued Senior Member

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    8,807
    There are several major problems going on in the U.S. We lock up too many people, percentage-wise more than most any other country in the world. We spend 6 times as much on our defense as the next largest military and our medical system is broken and over priced.

    Bill Gates isn't a problem (not a zero sum game...there was a book written about this point..."Eat the Rich"). The tax rates before the Reagan era were too high. The tax rates that Bush reduced were not too high and that was a mistake.

    Medical costs are too high and they are higher than in most other countries that have more comprehensive medical coverage. There is a systemic problem here.

    The bottom end of the economic ladder does need to be addressed in the U.S. I left out one major additional problem in the U.S. In particular, Congress is broken, there is too much "big money" involved resulting in representation of corporations but not the average citizen.
     
  20. iceaura Valued Senior Member

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    You can't solve any of them without raising the tax rates on high incomes and great wealth.
    No, they weren't. Not on the rich. Look at what happened when he lowered them.
    They are higher than in all other countries, by a large margin.
    Yep. Here's one of them: The rich control the prices but do not pay the costs. We don't tax the wealthy to provide medical care for the rest, we don't restrict the wealthy to the level of medical care available to the rest, so they have no incentive to keep the costs down or see that the care is delivered, and every incentive to use their power to extract greater profits and more wealth for themselves by any means handy.
    For which you can thank Reagan's tax and regulation cuts, in large part - braced and enforced by his Supreme Court picks and subsequent established Republican policy of politicizing the Court.
    The creation of a wealthy elite disconnected from the general welfare - so unequal as to be inhabiting a significantly different economic and political environment from the rest of the citizenry - did short term damage of course, but its long term cumulative effects are what we face now.
     
    Last edited: Jul 13, 2018
  21. Seattle Valued Senior Member

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    8,807
    I don't disagree with much of what you say but you are making the "rich" the scapegoat. That's not a good approach (to any problem). There is no problem with being wealthy as long as they are paying their "fair" share. There can be disagreements on what is "fair".

    It shouldn't be an emotional decision. It's like thinking that there is a major problem with the police shooting black males. The statistics don't bear this out. That's not to say that there aren't some problems with the police abusing their powers but it's not predominately a racial thing. Therefore, it's always important to make sure you are fixing the right problem.

    Portraying one segment of the population as only caring about profit or as being greedy isn't a rational assessment. When you go to work, and it's pay raise time you care about getting a raise and yet I wouldn't call you greedy.

    You could increase taxes to a ridiculous degree on everyone with any income or wealth but without addressing problems in Congress it would make no difference. However one would determine what "fair" was and how far the current taxing standard is from "fair", that is all that should be changing in that regard.

    You don't want to remove incentive from our economy or reward less than productive behavior otherwise you just kill the economy and make everyone poor.

    Again, there are many problems in our society but blaming them on the rich or wealthy for the most part is just scapegoating them. That is not to suggest that this isn't part of the problem however.
     
  22. Seattle Valued Senior Member

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    The Constitution and Supreme Court rulings have much more to do with this.

    You can't just tax your way out of a problem without fixing the underlying problem. It's all interconnected just as you can't dam a river for electricity without affecting the rest of the ecosystem. There is no free lunch.
     
  23. iceaura Valued Senior Member

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    The Constitution has nothing to do with it.
    The Court is of course corrupted by the disproportionate wealth accumulation. Contributing money is speech? Corporations are people? Complete bollocks - unless one serves the capitalist wealthy.
    It's not. It's hardcore coldblooded technical economics, biology, history, etc.
    When the underlying problem is that you have allowed the capitalist rich to accumulate too much wealth and obtain too high an income stream, using your regular democratic political system to tax your way out of the bad situation is by far the most attractive option.
    So I didn't do that. There are lots of nice rich people, I'm sure.
    Yes, it would. It did, when we did it.
    I'm not. I'm identifying a primary factor - extreme and growing wealth and income inequality. I blamed Reagan, Republicans in general, and so forth, because that's who did the bad stuff that created this primary factor in our most serious troubles, but that's as far as the blaming needs to go. We don't have to affix blame to handle this problem (except for the Republican Party, of course).
    That's an irrelevant concept. Whats wrecking itself along with its host country cannot be "fair" in any relevant sense. We've got an economic ship to right here, if we can. Everybody has do do their part.
     
    Last edited: Jul 13, 2018

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