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I've put this out there before but I will post it again:
What we can do is enhance the tax system with a "passion tax". In this method each person could be taxed the portion of his income that he believes the "rich" should be subject to.
For example if I passionately believe a person who owns a software company should pay more, then that percentage of passion I have for him being taxed would also apply to a corresponding percentage of my income. Over and above, of course, what both of us now pay.
I'm not sure how we could quantify these percentages yet because people's passions wax and wane on different things but it could be done if everyone is honest about their fervor to "close the gap".
From what I see in today's world social programs for the less fortunate are way, way past helping.
When my mother was forced to go on welfare with a house full of kids we got commodities, not SNAP or EBT or whatever it's called now-days. We put cardboard in our shoes when they got holes and wore the same clothes all school year till we outgrew them. No one wanted to be on welfare as a general rule because besides being humiliating, anything beyond basic sustenance wasn't included in the package.
Now people make a pretty good living off welfare with some eschewing work because it pays less.
You want to close the gap? Make welfare the least favorable option and people will get tired of being at the bottom and start climbing out of the quicksand of the State's "mercy".
I think the one really tragic thing about a lot of Americans is we expect it all right now. There is no rule you will be a millionaire by 40. It could take 3 or 4 generations but each of us is the hopes and dreams of our progenitors who labored for a better life. It's up to us look up, stand up, and pass it on.
Unfortunately, there is far more of the later going on...
rruff,
Please note that GINI does not distinguish between "good" inequality that is generated by innovation of the form of Otis in my example (and pretty much every Silicon Valley company) and "bad" inequality that is generated by Lyndon & Lady Bird Johnson and Russian Oligarchs and Carlos Slim of Mexico.
So saying the US has a high GINI ratio can be identically equal to saying the US has contributed more to raising the standard of living of everyone on the planet via the invention of the Integrated Circuit (IC), the Microprocessor, Personal Computers, Cellular Telephones, Personal Communications Devices ("smart phones"), computer networking, streaming media, the entire Dot-Com industry, etc etc etc.
When everyone is better off as a result of the extraordinary work of the few, don't focus on the few - focus on everyone being better off than the otherwise would be.
Last edited by moguldreamer; 10-08-2023 at 02:38 PM..
Income inequality only goes away when we all are on subsistence living. That's generally going to also leave a population prone to tremendous shocks that can otherwise be alleviated today....because there cannot be significant surplus capital. There cannot be incentive for one area to outperform another.
The Gini Coefficient is a useful tool however. It shows where there is the greatest disparity. It shows us where to look in pockets of populations. If someplace has a high coefficient because there is corruption that is fleecing everyone and going to one group unfairly....this is bad and will lead to political instability. If the coefficient is high because there is significant capital available that is being successfully deployed in improvement pursuits, resulting in an ownership/leadership class that has risked/profited the most....this is not necessarily bad at all. If there are no laws against others doing the same, it truly becomes more meritocratic.
This is different from perfect of course. Not all people will be talented. Not all talented people will have access to capital. Not all areas will have a population or infrastructure capable of carrying out new ventures. Short term concerns can negatively impact people and force them into careers that underutilize their skill set and limit their development. Having the government focus on keeping capital markets strong, supporting shared infrastructure and educating the population, enforcing fair labor laws and helping economies recover from shocks would be the best area of focus.
It should be dissuaded from choosing winners and losers however.
That is NOT the solution - discourages people to save, invest, invent and so discourages economic growth - also not constitutional
That makes no sense. If people have more money they do not have to pay in taxes that is money they can save,invest,invent and gives them money to spend and create economic growth. How are people having less money gonna help them do any of the things you listed?
No easy answer to the problems of human nature. I believe having the high top tax rate we had from 1920 to 1980 was a good way to bleed liquidity off of from the top of the system fairly effectively.
The problem really started with the quantitative easing though as that drove lots of liquidity into the hands of the top which they started to use to speculate on assets such as buying up residential real estate. A simple thing you could do is simply ban people from owning more than three houses unless they build the house themselves or have it built from scratch in which case they can have more than three.
Banning investment in residential real estate cause a mass of supply to hit the system and stop all these vacant properties that foreign investors just sit on. Allowing people who build more housing stock to own more houses would increase supply and benefit everyone. People who actually contribute real economic output to society are an asset whereas fnancial parasites who simply use their liquidity to buy up existing assets are a drain to society.
Also ban foreign investment in real estate.
I Believe this speculative investing through this bailout mentality is the real problem. This not allowing deleveraging events deflation or healthy prolonged recessions that bleed speculativeness out of the system and allow liquidation. These down cycles are healthy in moderation the people who speculate the most and tend to gobble up the assets tend to also be highly leveraged so they can be short squeezed in effect which helps the middle class through forced selling.
Simply bailing everyone out you concentrate wealth up to those who have speculated. This is why I believe the modern monetary theorists who want perpetual zero interest rates and infinite quantitative easing are such a cancer to the system. Most large empires that collapse end up with these perpetual money printers in charge.... Parasites who speculate on assets game the system so they benefit from it.
Quantitative easing is welfare for the top. There are zombie entities and parasites in the top that are just as harmful as the welfare recipient on the bottom. Top and bottom suck from the middle.
No easy answer to the problems of human nature. I believe having the high top tax rate we had from 1920 to 1980 was a good way to bleed liquidity off of from the top of the system fairly effectively.
Incorrect.
Academic studies show that doesn't happen. The 1950s and 1960s income tax rates exceeding 90% raised minuscule additional tax revenue.
America’s federal tax code is already the most progressive in the Organisation for Economic Co-operation and Development (OECD) and has become sharply more progressive over the past 40 years. Much of this tax progressivity is the result of drastic cuts to low- and middle-income taxes while leaving upper-income-tax rates closer to international norms.
Treasury data show that, in 2023, the bottom 40% of earners collectively pay no income tax and will instead receive a collective tax rebate of $123 billion. Overall, the bottom-earning 60% of families altogether financed just 23 days of federal spending in 2023. THAT is the problem that must be addressed.
Meanwhile, the top-earning quintile—while earning 58% of all income—pays 69% of all federal taxes and 90% of all income taxes. And the top 1% of earners—while earning 18% of all income—pay 25% of all federal taxes and 40% of all income taxes. By contrast, the bottom-earning 60% earns 23% of all income, yet pays just 13% of the total federal taxes, including a combined negative income tax.
When it comes to the budget deficit and the national debt, the real problem is the vast majority of people with no skin in the game.
That is NOT the solution - discourages people to save, invest, invent and so discourages economic growth - also not constitutional
Exactly -- we don't punish the successful in society because we want more successful people. In other words, If you want less of something, tax it.
Everyone needs to pay equitable income taxes. Full stop. Tax-proponents might make a good argument for inheritance taxes (unearned wealth) with an exception for disability trusts and the like.
That makes no sense. If people have more money they do not have to pay in taxes that is money they can save,invest,invent and gives them money to spend and create economic growth. How are people having less money gonna help them do any of the things you listed?
If you tax wealth, why would they save, invest and grow - you tax what you want less of, if you want people to have less wealth, that is what you will get if you tax it. People that have the money to invest will have less money that they can invest and less incentive to do so. How is disincentivizing the investors going to help anybody?
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