Wealth Distribution in the United States

[tambourine-man]

I shall restate my question:

Will someone please explain to me the difference between "FORCED redistribution of wealth" and theft?"

From the perspective of the actors' motives, the distinction offered earlier remains the same.

 

[Heuristic]

so have a wealth-resource-distribution network, which pools resources and shifts them out. its goal is to ensure everybody who needs it recieves resources, with priority on the ones required for basic living. all the politicians' possessions will be from this public source from the time they start serving to the time they finish, with hopefully financial reforms in place to deter implied bribes. so the politicians better make sure the government is able to ensure everybody who needs it clothes, energy, food, etc. if there is a shortage, the politicians feel it just as much as the inmates, homeless, elderly, middle class (though they don't feel it so much), government workers, etc

Hmmm... so we reduce what we pay Congressional Representatives and Senators to whatever the lowest salary of someone receiving government assistance would be? Or to the lowest level of whatever a government salary could be?

And that certainly is a compelling anecdote. I think a lot can be extrapolated from a culture that has 20 different kinds of toilet paper, though, and not just how effective their market is at providing products. Is it any more fair, or more correct, to call us decadent or misdirected as it is to praise us as industrious and libertarian based on what one can find in a grocery store?

Would it be different if you had a centralized government agency producing 20 different kinds of toilet paper? The reason you have that number of different products is that people have different preferences; society makes an effort to satisfy those different preferences.

This is, of course, leaving aside the incredible externalized environmental and postcolonial costs associated with most of that panoply of products. Choice is not a good in and of itself, I suppose I'm saying.

Sure, but command economies haven't proven any better. In fact, more capitalist economies have done a far better job managing those externalities.

 

[Cyc]

My parents earn at the low end of six figures, and last year they paid 50% of their income in taxes (and that's ignoring 5.6% sales tax in their county).

I've been trying to figure this out. You live in the US, correct? I seem to remember in Obama's campaign, something about upping taxes for people making over $250,000 to 39%.

How can your parents possibly be getting hit with 50% income tax?

 

[Heuristic]

^ there are payroll taxes in addition to the federal income tax; then there are state income taxes; then local taxes, ranging from property to sales to income. Add it all up and you're probably between 35% and 50% for anyone making greater than 135k or so.

 

[kong]

I've been trying to figure this out. You live in the US, correct? I seem to remember in Obama's campaign, something about upping taxes for people making over $250,000 to 39%.

How can your parents possibly be getting hit with 50% income tax?

As I keep trying to point out: taxes get passed or absorbed based on the elasticity of supply/demand. Just because you don't get taxed directly doesn't mean you don't pay the tax.

Also that number is only federal.

 

[marsmellow]

While consumption fueled by capitalist success may hurt the environment because people have more resources at their disposal I think it is clear our environmental standards are far higher than many "peoples environment" countries. Granted Russia and China are probably not examples of how you want things run.

No, I don't want things run like Russia and China.

I don't think you can make this transition without screwing everyone pretty bad in the meantime.

Yeah, it sucks but that is always what happens when the world changes. The industrial revolution hurt lots of people. Globalization is hurting lots of people. That always happens when there are big changes in the world.

Just to be clear we are talking about knocking out someone who makes 500m which according to you leads to 500 people with a million. I'd still like to know how. Just because you prevent someone from producing 500m worth of value to the market every year doesn't mean 500 people just end up with a million as a result.

Because I would use the tax money to give people equal opportunities to succeed, and this would mean that more people would be able to start businesses.

For example, think of a person that grew up in the inner city, where there are few jobs, lots of gang violence, poor schools, and other things like that. Imagine that one of their parents is addicted to heroin, and the other is dead. This person is probably going to be prevented from reaching their full potential, because of the circumstances that they are growing up in.

If the government took action to get rid of these problems, they would be more likely to finish high school and go to college, less likely to get addicted to drugs or join a gang, and more likely to get a good job. Maybe they would decide to start a business.

That is basically how taxing one person with 500 million would lead to 500 (or more) people with one million. By giving all people the same opportunities that wealthy people have, more people will end up doing things that wealthy people do, like starting businesses.

Even under the absolute best circumstances the knowledge possessed in an agency cannot compare the knowledge possessed by the collective mind of the market.

I'm not exactly sure what this means, or why it proves that the government couldn't do what Wall Street does...

 

[kong]

Yeah, it sucks but that is always what happens when the world changes. The industrial revolution hurt lots of people. Globalization is hurting lots of people. That always happens when there are big changes in the world.

When I say screw everyone I'm talking about a severe depression, not the scars of innovation.

Because I would use the tax money to give people equal opportunities to succeed, and this would mean that more people would be able to start businesses.

Hopefully doing whatever it is you stopped the first person from doing since its clear the market wanted what they were selling. Don't act like 500m goes in and then come out 500m when we are talking about the government though.

For example, think of a person that grew up in the inner city, where there are few jobs, lots of gang violence, poor schools, and other things like that. Imagine that one of their parents is addicted to heroin, and the other is dead. This person is probably going to be prevented from reaching their full potential, because of the circumstances that they are growing up in.

If the government took action to get rid of these problems, they would be more likely to finish high school and go to college, less likely to get addicted to drugs or join a gang, and more likely to get a good job. Maybe they would decide to start a business.

If the government just quit regulating drugs there would be no gangs, and no one would fight over drugs anymore than they fight of cigs and booze. I don't think the solution is take things from one person and give them to another, I think it is to quit interfering with the drug market.

I'm not exactly sure what this means, or why it proves that the government couldn't do what Wall Street does...

Heuristic had a great post explaining this a few posts back.

Wall Street isn't the market. Everyone acting in the market is the market. Anyone with money and unique information will determine how capital is allocated. Since far more people fit into this category than could possibly be employed a government agency the market allocates capital more efficiently.

There is plenty of historical precedent to back this up. Having government perform the investment function is a horrible idea.

 

[rant*N*rave]

^Don't forget the one form of investment they should do: science research and education.

Government funding has given us the internet, tons of pharmaceuticals, and plenty of other useful tools and products.

(Others have explained the 50% number, so I'll skip that.) My main point is that this raw concept of simply raising taxes on the "rich" is about as useful as using a swat team to catch a jaywalker. People like my parents, who have worked hard, paid their dues, given buttloads to charity, and built a nice, but by no means extravagant, life for themselves and their children - THE goal of most, if not all, Americans - are being punished in literally life-threatening ways in order to dump more money into a government that has PROVEN to be inefficient and ineffective. Even if we ignore my parents, who are on the fringe of "rich" as defined by the federal government, and look solely at the Bill Gateses of the world, what good does it do even if we take all of his money and hand it to Barack Obama? We would be much better served by reform to better utilize resources (a distinctly capitalist idea) and using government funding to provide raw basic services (build a free clinic, don't give insurance). We also need to address corruption, not just in the end recipient, but in all the middlemen (government officials, doctors, landlords, etc) that jack the system because it is so convoluted and not resource-allocation-based. Then we can go from there to determine if we really do need more money to help people.

We need to remember that punishing people to help people that have been punished by life is pretty, to put it frankly, stupid.

 

[koRnbRed]

I long for the day when there can be a compromise of some sort to bridge the gap between the rich and poor but I doubt that day ever comes. The rich have all the political power and the poor don't seem to vote with their best interests at heart anyway.

 

[LVTfan (google it)]

Reconstructing Capitalism to serve PEOPLE!

I'm fully aware how good the alternatives to capitalism sound. They have admirable goals and offer solutions to problems capitalism doesn't come close to addressing.

They don't work though. At least not the suggestions I've been hearing around here. I'd love to see something *deliver*. As far as super high taxes go its clear what happens, they get passed down, investment slows, and everyone is poorer as a result.

Might I humbly suggest that you take a look at Bob Andelson's fine essay, "Henry George and the Reconstruction of Capitalism," available from the front page of http://www.wealthandwant.com/ I think you might find a lot to like.

 

[qwe]

Hmmm... so we reduce what we pay Congressional Representatives and Senators to whatever the lowest salary of someone receiving government assistance would be? Or to the lowest level of whatever a government salary could be?

if congress is on the same plan as everybody else, they'll make sure that plan works

healthcare, energy, food, etc. tie the government officials to the poor. the improvement in standard of living will be worth the politicians not making millions of dollars to screw the little guys

 

[kong]

Might I humbly suggest that you take a look at Bob Andelson's fine essay, "Henry George and the Reconstruction of Capitalism," available from the front page of http://www.wealthandwant.com/ I think you might find a lot to like.

Great article, that make sense. I'll look for some criticisms now, (not to be argumentative just to better understand it).

Here is the direct link to the article:

http://www.wealthandwant.com/docs/Andelson_HGRC.html

if congress is on the same plan as everybody else, they'll make sure that plan works

healthcare, energy, food, etc. tie the government officials to the poor. the improvement in standard of living will be worth the politicians not making millions of dollars to screw the little guys

They all start filthy rich in the first place. I doubt we will attract much talent if we make candidates give away all their assets to start with. The last thing we need is for congress to take out a loan from China to fulfill their *own* needs.

 

[LVTfan (google it)]

Redistribution -- or Pre-Distribution?

Will someone please explain to me the difference between "redistribution of wealth" and theft?

Thanks In Advance,

"Greedy Pig"

When we permit structures which funnel wealth into private pockets, permitting some of us to reap what the rest of us sow, would you describe correcting that as "redistribution"?

We are saddled with a machine which has placed over 70% of our net worth into the portfolios of the top 20% of income recipients and 71.46% of our net worth into the portfolios of the top 10% of our net worth distribution.

Do you think this machine is a good thing for society, or a bad thing?

I'd rather see the value of that which rightly belongs to the community -- e.g., the economic rent on urban land, the revenue from non-renewable natural resources, the rent on such things as the airwaves, geosynchronous orbits, landing slots at LaGuardia, to name a few from a long list -- "re-commonized" into public coffers, while we remove taxes from productive activity -- sales, labor, etc. When we permit corporations and individuals and other entities -- domestic and foreign -- to privatize that which the community creates, we funnel OUR treasure into THEIR pockets.

Notice that none of these things were created by corporations, or individuals; rather they are gifts of nature or products of the community. Us. All of us. If one honestly believes we're created equal, how can anyone claim exclusive rights to the gifts or nature or the production of the community without fully compensating his fellow citizens for excluding them?

Permitting that privatization is the root of the problem.

Would you object to redistributing that which we've unjustly permitted some to privatize? I'm not talking about the product of anyone's labor; I'm talking about something that goes beyond individual labor.

For more about Theft, you might check out this speech, by Henry George, entitled "Thou Shalt Not Steal." (Even if your orientation is not theological, I think you'll find little to disagree with.) Also this page: http://www.wealthandwant.com/themes/Theft.html

"As to what constitutes robbery, it is, we will both agree, the taking or withholding from another of that which rightfully belongs to him. That which rightfully belongs to him, be it observed, not that which legally belongs to him. ...

The repetition of a wrong may dull the moral sense, but will not make it right. A robbery is no less a robbery the thousand millionth time it is committed than it was the first time."​

I'm not suggesting Re-distribution. I'm saying that the value of certain elements of what is rightly common ought to be collected up front. Pre-distribute. Month in and month out. Lease out landing rights to the highest bidder. Lease out water rights. Lease out geosynchronous orbits. Lease out the airwaves. Full market value. Rebid every 5 or 10 years. Use the proceeds to fund infrastructure and services. Collect back the economic rent those public investments create, instead of gifting them generously, year after year, to our Astors, Helmsleys, Tishmans and other "investors" -- which led to what Leona Helmsley pointed out: "WE don't pay taxes. The little people pay taxes."

 

[Unbreakable]

http://awesome.good.is/transparency/web/1002/almighty-dollar/flat.html


Breaks down the wealth from Regions...

 

[CFC]

save