Poll: wealth more distributed or concentrated

[Rainsford]

Except that it's not about making things better for the poor but making it worse for the rich. Getting "them" is what it's all about.

We really need to stop using the word "poor" to describe the alternative to "rich". Not only are "the poor" getting a smaller piece of the economic pie than they were before, so are you, and (likely) so is almost everyone who posts here. Republicans always phrase the two sides as the poor and the middle class, the leeches and the producers...but that's not how things are at all. The vast majority of people who work hard for a living have seen relatively little of the economic growth in the last several decades, while the very small percentage of people at the top have benefited enormously.

And while it's a conveniently lazy argument to dismiss this concern as just wanting to attack the rich, you're totally ignoring the potential problems this upward redistribution of wealth has on society as a whole. The rich don't grow the economy all by themselves, but when they're the main beneficiaries of that economic growth, it unbalances the economy as a whole.

I'm not sure government intervention is a good solution, but I don't think our current situation is workable either.

 

[the DRIZZLE]

It's important we live in society that allows people to be rich. Everyone needs a "goal" to strive for and since our society and economy are so money-centric being rich is that "goal."

However, a natural consequence of people becoming rich is the hoarding of money by a select few. Those with money are more easily able to earn more money and protect it. As time goes by, their wealth will become more concentrated and stagnant.

To combat this, a progressive system of taxation is necessary. It shouldn't be outlandish, but it should clearly delineate rates between "normal" wage earners and the "rich." Say, for example, the highest tax rate shouldn't kick in until someone gets into the millions of dollars earned rather than $388,000 today. On top of that, all deductions and credits should be eliminated to completely simplify the tax system.

Something along the lines of:

Tax rate - Income taxed at rate
5% - $1-$29,999
10% - $30,000 - $49,999
15% - $50,000 - $99,999
20% - $100,000 - $149,999
25% - $150,000 - $249,999
30% - $250,000 - $499,999
35% - $500,000 - $999,999
40% - $1,000,000 - $1,999,999
45% - $2,000,000 - $4,999,999
50% - $5,000,000+

This would make the effective tax rate for someone earning $5M per year 41% -- a good deal higher than the 35% plus deductions and credits they would pay today, however it also makes lower income wage earners pay some modicum of taxes as well rather than getting a free EIC check every year. For example, a family earning $50,000 total would have an effective rate of 7% rather than some negative number once you factor in deductions and credits.

In this scenario, EVERYONE pays more and if we actually had responsible leaders, they'd use the extra money (along with spending cuts) to eliminate the deficit and begin paying down the national debt.

Actually, your plan would be a significant tax cut for upper middle class people.

 

[Dman8777]

Except that it's not about making things better for the poor but making it worse for the rich. Getting "them" is what it's all about.

For some people it may be a matter of jealousy or whatever it is you're insinuating. For others though, it's about equality and sustainability.

 

[Rainsford]

For some people it may be a matter of jealousy or whatever it is you're insinuating. For others though, it's about equality and sustainability.

I honestly don't even care about "equality" in the sense of everyone ending up with close to equal amounts of money...I'm much more interested in the sustainability issue. And I don't think an economy can survive with ever increasing amounts of wealth in the hands of a small portion of society. Not only does it limit spending by a large portion of the population, but it doesn't provide much incentive for most people to try to improve their own productivity. Unless someone believes that nobody but the rich impact economic growth, everyone else is kind of getting an unfair result.

 

[DominionSeraph]

I have to quote this for posterity. I mean, someone discussing economics, with internet access no less, to say such a thing... Just wow. You really are living in an alternate reality.

Sadly, matt0611 is a font of such things. That quote is really no different than any of a thousand things he's said.
To go meta: by some weird mechanism, Anandtech P&N has managed to become a social pocket for some of the dumbest people on the internet. It's really odd, because in other forums a hierarchy gets established by the 16 year olds jumping on the 15 year olds (who are ignorant relative to them), and the 15 year olds jumping on the ignorant 13 year olds... but in here we have 13 year olds like matt0611, pcgeek, and xjohnx running around with no controls whatsoever. The next tier up (Spidey level) is so partisan that instead of distancing themselves from the idiots they welcome them in simply to try to go for a weight of numbers to enable them to effortlessly shift into dog-piling.

It's an interesting social mechanism.

 

[Craig234]

The poorly kept secret a lot of you folks insist on ignoring is the bigger the gap between the rich and the poor, the richer the rich and the poorer the poor, regardless to what the absolute wealth and income numbers turn out to be. It's merely the nature of competing for finite resources, and the reason those at the top come out far sooner and way ahead during and after an economic downturn. You don't have to outrun the bear, just your buddy.

Growing the size of wealth is nice. Over the last 30 years the economy has more than doubled in size.

When 'a rising tide lifts all boats', that's nice. That's what happened in the FDR to Carter period. In the last 30 years all the growth went to the top 20%; 80% went to the top 1%.

Those are after-inflation numbers. Another is in the last decade, 90% of workers have declined in income. That's mostly the Bush years. Under the 'tax cut for the rich'.

That's why the top 1% have tripled their *share* of income. Doing so has reduced opportunity for the rest of society, increased their dominance over our politics.

That's the nasty cycle, the more they get, the more powerful they get.

 

[Craig234]

We really need to stop using the word "poor" to describe the alternative to "rich". Not only are "the poor" getting a smaller piece of the economic pie than they were before, so are you, and (likely) so is almost everyone who posts here. Republicans always phrase the two sides as the poor and the middle class, the leeches and the producers...but that's not how things are at all. The vast majority of people who work hard for a living have seen relatively little of the economic growth in the last several decades, while the very small percentage of people at the top have benefited enormously.

And while it's a conveniently lazy argument to dismiss this concern as just wanting to attack the rich, you're totally ignoring the potential problems this upward redistribution of wealth has on society as a whole. The rich don't grow the economy all by themselves, but when they're the main beneficiaries of that economic growth, it unbalances the economy as a whole.

I'm not sure government intervention is a good solution, but I don't think our current situation is workable either.

That's why '1%' and '99%' are much more useful.

What do you mean about 'government intervention' not being a 'good solution'?

That's like saying that NFL rules should not interfere with football games. Nevermind that it's the rules that create a "touchdown" or a "field goal" and say how many points they are. The government creates the rules for people to play by in the economy, and is going to 'greatly influence the outcome' no matter what they are, with taxes etc.

What is a 'salary cap' in professional sports except a tool to affect the outcomes in two ways, one, help increase opportunity for less wealthy teams, two, limit the costs.

 

[Craig234]

I see five people have voted for high concentration of wealth, without identifying themselves in posts or explaining. I didn't know how to edit the poll to 'show names'.

 

[Rainsford]

That's why '1%' and '99%' are much more useful.

What do you mean about 'government intervention' not being a 'good solution'?

That's like saying that NFL rules should not interfere with football games. Nevermind that it's the rules that create a "touchdown" or a "field goal" and say how many points they are. The government creates the rules for people to play by in the economy, and is going to 'greatly influence the outcome' no matter what they are, with taxes etc.

What is a 'salary cap' in professional sports except a tool to affect the outcomes in two ways, one, help increase opportunity for less wealthy teams, two, limit the costs.

I didn't say the government shouldn't be (or isn't) involved or that the government CAN'T help solve the problem. My point was that our specific government (ie, not an abstract government concept) does a crummy job of leveling the playing field. In fact I think history demonstrates that in many cases they unbalance things even further, helping the rich get even more ahead. Currently we have a political environment where a significant portion of the voters think it's virtuous for the government to help the rich even more at the expense of everyone else (although I doubt they'd put it quite that way ). In a time when most people are struggling to get by, there are a lot of serious proposals suggesting that what we really need to focus on is cutting taxes for rich people. When the average income in America hovers around $50k per year, pundits don't end up as the laughing stock of the country arguing that $250k a year isn't really all that much money.

In other words, I think government in general has a significant part to play in this issue. I'm just not sure our particular government with our particular voters is going to do a very good job of it.

 

[Craig234]

I didn't say the government shouldn't be (or isn't) involved or that the government CAN'T help solve the problem. My point was that our specific government (ie, not an abstract government concept) does a crummy job of leveling the playing field. In fact I think history demonstrates that in many cases they unbalance things even further, helping the rich get even more ahead. Currently we have a political environment where a significant portion of the voters think it's virtuous for the government to help the rich even more at the expense of everyone else (although I doubt they'd put it quite that way ). In a time when most people are struggling to get by, there are a lot of serious proposals suggesting that what we really need to focus on is cutting taxes for rich people. When the average income in America hovers around $50k per year, pundits don't end up as the laughing stock of the country arguing that $250k a year isn't really all that much money.

In other words, I think government in general has a significant part to play in this issue. I'm just not sure our particular government with our particular voters is going to do a very good job of it.

Thanks, cleat clears up the confusion.

When you said "I'm not sure government intervention is a good solution", that sounded like a statement that a 'good government' policy won't help, not about the current one.

And also like we don't already have 'government intervention', just for the rich.

 

[Rainsford]

Thanks, cleat clears up the confusion.

When you said "I'm not sure government intervention is a good solution", that sounded like a statement that a 'good government' policy won't help, not about the current one.

And also like we don't already have 'government intervention', just for the rich.

Government has to be the solution in areas like this, in my view. The idea that the natural state of a free market has the average person on a level playing field with the incredibly wealthy and enormous corporations seems ridiculous unrealistic to me. I don't think government should control the entire economy, because that doesn't work either, but I think they need to step in to extent necessary to make sure the system isn't just working for a few.

 

[Hayabusa Rider]

We really need to stop using the word "poor" to describe the alternative to "rich". Not only are "the poor" getting a smaller piece of the economic pie than they were before, so are you, and (likely) so is almost everyone who posts here. Republicans always phrase the two sides as the poor and the middle class, the leeches and the producers...but that's not how things are at all. The vast majority of people who work hard for a living have seen relatively little of the economic growth in the last several decades, while the very small percentage of people at the top have benefited enormously.

And while it's a conveniently lazy argument to dismiss this concern as just wanting to attack the rich, you're totally ignoring the potential problems this upward redistribution of wealth has on society as a whole. The rich don't grow the economy all by themselves, but when they're the main beneficiaries of that economic growth, it unbalances the economy as a whole.

I'm not sure government intervention is a good solution, but I don't think our current situation is workable either.

I'm not ignoring anything. I understand perhaps better than most what helping "the poor" meant in the past. We in NY spend about 60 billion a year on medicaid, far more than any other state. We also have the highest property taxes in the nation to pay for these programs. What's the solution? Raise taxes so we can give more people money for nothing. No education, no jobs, no work ethic, no hope. Oh we'll give them a check though, and wouldn't it be nice to give those in the top bracket a tax increase? That way we can do the wrong things even more effectively.

No, what you are saying is just what was done in when welfare was created and that turned into a multigenerational trap. Give people a fish and they'll eventually teach themselves to fish has never ever worked. We need to get a program in place or at least have one ready before taking money and where precisely is that? The plan is to tax the rich of course and that will fix everything, right? No, that is disasterous thinking.

 

[glenn1]

I see five people have voted for high concentration of wealth, without identifying themselves in posts or explaining. I didn't know how to edit the poll to 'show names'.

I didn't vote, but if I did I'd have selected the "greater concentration" from among your two ridiculous choices. First of all, maximizing wealth is in direct conflict with the forced redistribution you'd put in place, and unlike you I care about something beyond just the "rich are getting richer." Secondly, you have provided absolutely no reasons beyond an appeal to emotion why an inequal distribution is bad on its face or what would be the positive effects of a lower GINI coefficient apart from satisfying your own preferences. Third, you've not spoken even one word about improving the condition of the poor (e.g. helping them improve their skill sets, learn job skills, etc) so it's fair to say their welfare is not your concern but rather only "sticking it to the (rich) man," and you can count me out of that agenda.

 

[bfdd]

Uh.. I think we should stop giving a fuck about wealth and worth anyways. It's arbitrary bullshit and your measurement of what is wealth and success is different from mine. I think we shouldn't allow people to horde resources, that's terrible, but so many people think money=wealth/success it's pathetic. It's weak humans who are stuck on concepts of "money" and shiny baubles.

btw good post Hayabusa and Rainsford even though you guys might disagree, I liked reading both. I think you guys both make valid points.

 

[Matt1970]

Growing the size of wealth is nice. Over the last 30 years the economy has more than doubled in size.

When 'a rising tide lifts all boats', that's nice. That's what happened in the FDR to Carter period. In the last 30 years all the growth went to the top 20%; 80% went to the top 1%.

Those are after-inflation numbers. Another is in the last decade, 90% of workers have declined in income. That's mostly the Bush years. Under the 'tax cut for the rich'.

That's why the top 1% have tripled their *share* of income. Doing so has reduced opportunity for the rest of society, increased their dominance over our politics.

That's the nasty cycle, the more they get, the more powerful they get.

So if you raise the taxes back up to the rates they were 40 years ago then you will choke off the very thing that allowed the economy to blossom like it has.

 

[Double Trouble]

Concentration of wealth is an issue, but I've yet to see any effective means of reversing the concentration of wealth that is in any way equitable. No "just tax the rich and have the government hand it out to others" is neither effective (as we've seen over 40 years of welfare combined with increases in poverty rates) nor equitable.

In addition, what portion of people who are poor are poor because of bad choices / behavior on their part? How do you fix that problem -- ie, there's always going to be a tendency for money to leave the hands of those who make bad decisions and end up in the hands of those who make good decisions.

 

[Agfadoc]

No matter what system you think you'll replace capitalism with, there will always be a 1%. Check history.. Mankind has always had a ruling class and an impoverished class.

The difference is I can pull myself up to the ruling class if I have the desire and knowledge to do so in our system today, in the "other" systems that are typically replacing capitalism, the poor are permanent, and inescapable.

Youthful ideologues can't change history, unless they rewrite it themselves.

 

[Craig234]

No matter what system you think you'll replace capitalism with, there will always be a 1%. Check history.. Mankind has always had a ruling class and an impoverished class.

No one is talking about replacing capitalism. That's the problem with the debate - the word 'socialist' gets thrown around wildly against anyone on 'the left', but the right denies any word for all the garbage it supports - cronyism, corruption, plutocratic policies and much more - it demands the word 'capitalism' be used so that if you attack their garbage you are attacking 'capitalism'. That cripples the debate.

No one is talking about 'getting rid of the 1%'. We're talking about making their share of wealth less extremely concentrated.

It's like you didn't even read the damn OP or any other of hundreds of posts on this.

The issue isn't having an elite class - it's how elite it will be.

The difference is I can pull myself up to the ruling class if I have the desire and knowledge to do so in our system today, in the "other" systems that are typically replacing capitalism, the poor are permanent, and inescapable.

Bullshit garbage ideology. Excessive concentration of wealth reduces opportunity. You won't do any better than a few anecdotes trying to support your false claim.

Youthful ideologues can't change history, unless they rewrite it themselves.

Platitude. Useless.

Sorry for a rough welcome.

Welcome to P&N.

 

[Agfadoc]

Your goal is at issue here, your questions are based on a desire to move people to an idea, you are marketing your wares in the form of ideology.

Your desired result is at issue. You and I both know what you are trying to do.



Sent from my PC36100 using Tapatalk

 

[Agfadoc]

"Self-preservation and self-development are common aspirations among all people. And if everyone enjoyed the unrestricted use of his faculties and the free disposition of the fruits of his labor, social progress would be ceaseless, uninterrupted, and unfailing." ~Bastiat

Your envy of others aspirations doesn't negate the fact that there will always be people who would rather live off the fruits of others and we are not all designed equally, therefore to try and equalize the rewards, you remove the desire to continue to produce...

 

[Agfadoc]

... hence....Socialism.

I thought I would piece it together for you. I took for granted that progressives like to mire themselves in menusha, keeping the argument vague and masking the overall agenda.

In the end it's all about the agenda.

 

[cybrsage]

The Fair Tax should be implimented and the Income Tax should be abolished. You get taxed on what you buy, not how much you earn. Drug dealers, prostitutes, moonshiners, etc., will all pay their fair share of taxes.

 

[brencat]

To combat this, a progressive system of taxation is necessary. It shouldn't be outlandish, but it should clearly delineate rates between "normal" wage earners and the "rich." Say, for example, the highest tax rate shouldn't kick in until someone gets into the millions of dollars earned rather than $388,000 today. On top of that, all deductions and credits should be eliminated to completely simplify the tax system.

Something along the lines of:

Tax rate - Income taxed at rate
5% - $1-$29,999
10% - $30,000 - $49,999
15% - $50,000 - $99,999
20% - $100,000 - $149,999
25% - $150,000 - $249,999
30% - $250,000 - $499,999
35% - $500,000 - $999,999
40% - $1,000,000 - $1,999,999
45% - $2,000,000 - $4,999,999
50% - $5,000,000+

This would make the effective tax rate for someone earning $5M per year 41% -- a good deal higher than the 35% plus deductions and credits they would pay today, however it also makes lower income wage earners pay some modicum of taxes as well rather than getting a free EIC check every year. For example, a family earning $50,000 total would have an effective rate of 7% rather than some negative number once you factor in deductions and credits.

I think the effective tax rates you propose at the $100 - $500k are too high in my opinion, particularly living where I live in the NY metro area, where property taxes are $18 - 25k in after tax money for a 1 acre/2-car garage/2700 sq ft home, to say nothing of other high cost of living expenses.

You also didn't address how to treat investment income. If these brackets are solely to address W2 income, then you have skipped over the most important tax that has expanded the wealth gap over the past 20 years... i.e. capital gains. Chances are the guy making $5 mill/year isn't getting that in salary (except maybe a partner at a law firm or similar). He's getting that primarily from cap gains and investments that are taxed at a low 15%. Or getting paid in stock taxed at 15%.

Frankly, I think W2 income should be taxed lower, while cap gains need to be taxed at 25-28% to ensure the investor class of society pays a reasonable effective rate relative to earned income. But it's quite obvious neither Dems nor Repubs will touch this issue because those are the people who they get all their political donations from... case in point -- Obama's 3 fundraising stops in NYC last week from the city's 'elite' investor class.

 

[matt0611]

Your goal is at issue here, your questions are based on a desire to move people to an idea, you are marketing your wares in the form of ideology.

Your desired result is at issue. You and I both know what you are trying to do.



Sent from my PC36100 using Tapatalk

Exactly, he's just trying to sell his bullshit ideas because people like him want to run society and distribute the wealth as they see fit. To do what they believe is "fair" or "just". They don't care that you've worked for your money. They have this notion that things must be properly distributed by the barrel of a gun from you to government and then to others for "the greater good". His desired result is economically suspect and more importantly morally bankrupt.

 

[Atreus21]

It's important we live in society that allows people to be rich. Everyone needs a "goal" to strive for and since our society and economy are so money-centric being rich is that "goal."

However, a natural consequence of people becoming rich is the hoarding of money by a select few. Those with money are more easily able to earn more money and protect it. As time goes by, their wealth will become more concentrated and stagnant.

To combat this, a progressive system of taxation is necessary. It shouldn't be outlandish, but it should clearly delineate rates between "normal" wage earners and the "rich." Say, for example, the highest tax rate shouldn't kick in until someone gets into the millions of dollars earned rather than $388,000 today. On top of that, all deductions and credits should be eliminated to completely simplify the tax system.

Something along the lines of:

Tax rate - Income taxed at rate
5% - $1-$29,999
10% - $30,000 - $49,999
15% - $50,000 - $99,999
20% - $100,000 - $149,999
25% - $150,000 - $249,999
30% - $250,000 - $499,999
35% - $500,000 - $999,999
40% - $1,000,000 - $1,999,999
45% - $2,000,000 - $4,999,999
50% - $5,000,000+

This would make the effective tax rate for someone earning $5M per year 41% -- a good deal higher than the 35% plus deductions and credits they would pay today, however it also makes lower income wage earners pay some modicum of taxes as well rather than getting a free EIC check every year. For example, a family earning $50,000 total would have an effective rate of 7% rather than some negative number once you factor in deductions and credits.

In this scenario, EVERYONE pays more and if we actually had responsible leaders, they'd use the extra money (along with spending cuts) to eliminate the deficit and begin paying down the national debt.

How exactly is money hoarded?

We already have a progressive system of taxation.

Tax Year 2009:
After tax credits, individuals with between $1 and $5,000 Adjusted Gross Income pay 4.8% of their AGI in income taxes.
Under the same conditions, individuals with between $5,000 and $10,000 Adjusted Gross Income pay 2.6% of their AGI in income taxes.
Under the same conditions, individuals with between $10,000 and $15,000 Adjusted Gross Income pay 2.3% of their AGI in income taxes.
Under the same conditions, individuals with between $15,000 and $20,000 Adjusted Gross Income pay 3% of their AGI in income taxes.
Under the same conditions, individuals with between $20,000 and $25,000 Adjusted Gross Income pay 4.5% of their AGI in income taxes.
Under the same conditions, individuals with between $25,000 and $30,000 Adjusted Gross Income pay 5.4% of their AGI in income taxes.
Under the same conditions, individuals with between $30,000 and $40,000 Adjusted Gross Income pay 6% of their AGI in income taxes.
Under the same conditions, individuals with between $40,000 and $50,000 Adjusted Gross Income pay 6.8% of their AGI in income taxes.
Under the same conditions, individuals with between $50,000 and $60,000 Adjusted Gross Income pay 7.7% of their AGI in income taxes.
Under the same conditions, individuals with between $75,000 and $100,000 Adjusted Gross Income pay 8.5% of their AGI in income taxes.
Under the same conditions, individuals with between $100,000 and $200,000 Adjusted Gross Income pay 11.9% of their AGI in income taxes.
Under the same conditions, individuals with between $200,000 and $500,000 Adjusted Gross Income pay 19.6% of their AGI in income taxes.
Under the same conditions, individuals with between $500,000 and $1,000,000 Adjusted Gross Income pay 24.4% of their AGI in income taxes.
Under the same conditions, individuals with between $1,000,000 and $1,500,000 Adjusted Gross Income pay 25.3% of their AGI in income taxes.
Under the same conditions, individuals with between $1,500,000 and $2,000,000 Adjusted Gross Income pay 25.6% of their AGI in income taxes.
Under the same conditions, individuals with between $2,000,000 and $5,000,000 Adjusted Gross Income pay 25.8% of their AGI in income taxes.
Under the same conditions, individuals with between $5,000,000 and $10,000,000 Adjusted Gross Income pay 25.4% of their AGI in income taxes.
Under the same conditions, individuals with $10,000,000 or more Adjusted Gross Income pay 22.6% of their AGI in income taxes.

From my fair share thread back in September.

http://forums.anandtech.com/showthread.php?t=2190004&highlight=rich+pay+fair+share