Income Inequality in America

Simple poverty has been with humans since the beginning of time. Visualize the first 12 people on earth. Of the 12, 3may be able to find, gather and eat more food than the other 9 and they save part of it for the next period of time. The next 3, though not gathering as much still find gather and eat enough to remain healthy and also save a little for the next period of time. The next 3 find and gather and eat well enough to be comfortable but not enough to save; and actually if the find and gather a little more today than they need, instead of saving it for the next period they eat even if it makes them uncomfortable. (lions and tigers do this in the wild and though not saving for the future they create fat on their bodies which keeps them from starving if they can not find, gather and eat for a while.) The last 3 sleep too late, or are disabled, or are lazy or any number of various excuses never find enough, never get to eat enough and if the first 2 groups don't watch it, their savings of food will be stolen.

Now we all know that now all people are capable of doing as well as the first 2 groups, for what ever reason, and the first 2 groups tend to share what they have with those who cannot fend for themselves (as we should do ad decent human beings). The last group will always be poor, even if the forage gets much easier to find. Some of the reasons are ambition, motivation and laziness.

Even Jesus Christ said something to the effect, "the poor will always be with us, better you should spend your time in other ways." This does not mean we should not care for the poor who cannot help themselves, but the implication is that poverty will never be solved.


Matthew 26

26 When Jesus had finished saying all these things, he said to his disciples, 2 “As you know, the Passover is two days away—and the Son of Man will be handed over to be crucified.”

3 Then the chief priests and the elders of the people assembled in the palace of the high priest, whose name was Caiaphas, 4 and they schemed to arrest Jesus secretly and kill him. 5 “But not during the festival,” they said, “or there may be a riot among the people.”
Jesus Anointed at Bethany

6 While Jesus was in Bethany in the home of Simon the Leper, 7 a woman came to him with an alabaster jar of very expensive perfume, which she poured on his head as he was reclining at the table.

8 When the disciples saw this, they were indignant. “Why this waste?” they asked. 9 “This perfume could have been sold at a high price and the money given to the poor.”

10 Aware of this, Jesus said to them, “Why are you bothering this woman? She has done a beautiful thing to me. 11 The poor you will always have with you,[a] but you will not always have me. 12 When she poured this perfume on my body, she did it to prepare me for burial. 13 Truly I tell you, wherever this gospel is preached throughout the world, what she has done will also be told, in memory of her.”

 

Yes, there is. Though on occasion even the intelligent are poor, but more often than not, it is because of bad choices.

 

I am getting to be quite old, 78 in a couple of months. Looking back over the years and examining poverty here in the US and elsewhere, I have come to the conclusion that there is really very little poverty, TRUE POVERTY, in the US. Even the most poor among us have programs to sustain them if the choices are to use them to advantage. That is not at all like the 3rd world where safety nets are non existent.

Living in India 60 years ago I was in a position to see real poverty. After the partition of India in 1947 millions of people had to flee Pakistan to India and India to Pakistan depending on the individuals religion. The India government created a resettlement program they called Colonization. It involved clearing hundreds of thousands of acres of jungle land and moving refugees onto the land resettling them. Originally the intention was for them to pay taxes based on the individual allocation of land, but it didn't work out because it took years for non farmers to learn to cultivate enough beyond subsistence such that they could pay the taxes. These people were the fortunate ones and eventually many worked their way into what is now a 300 million middle class. Poverty was not eliminated in India, but it was mitigated for the millions who worked at it.

I lived in one of the projects in the Kashipur district with a friend of my father who was the directer of that project. Mostly I did odd jobs and hunted, meat hunted, for the workers clearing and preparing the land and building the housing, and to package with dry ice to send to my family in Lucknow since good meat was virtually impossible to buy on the market. That was my first experience with LVT and my observation was that it was a total failure. As people began to prosper, those who did better bribed the officials to reduce their taxes and those who did not prosper did not ever have the money to pay the tax.

 

I.e., where the effects of landowning are visited upon the landless with unmitigated savagery, torturing millions of them to death every year. You demand the continuation of a system of massive, institutionalized injustice that inflicts two Holocausts worth of robbery, enslavement, starvation, tyranny, despair, suffering and death on innocent human beings EVERY YEAR.

No, it was not. You have never had any experience of LVT, as I have proved to you before.

Yet you somehow failed to "observe" the fact that it was nothing like LVT in anything but name...

There was no market valuation of the land. There was no market bidding for the land. There was no market allocation of the land. There was no universal individual exemption (or, second best, equivalent citizens dividend) to restore the right to liberty. There was no attempt to recover the full rental value of the land. There was no attempt to apply the same ad valorem rate of tax to all the land. There was no attempt to ensure democratic accountability to the people paying the tax. There was no attempt to prevent effective taxation of improvements. There was, in short, no discernible resemblance whatever to actual LVT.

Proving it wasn't LVT. LVT is always affordable, because it is what someone willingly bids in the market to use the land.

 

Ever notice that before Free Trade and NAFTA, there was little talk about the rich being so wealthy and the rest of us being so poor?

 

I believe you are confusing simple poverty with being poor. The poor may always be with us on an at-will basis, but official poverty can easily be corrected for with sufficient socialism to bear true social witness to our own laws regarding the concept and legal doctrine of employment at will.

Full employment of resources in any given market is one function of government, but especially so in any market for human capital.

 

Thank you for providing anecdotal evidence in favor of Socialism and solving absolute forms of poverty through income transfers such that only relative forms of poverty exist.

 

Things were fine until the housing scheme crashed.

Are "the poor" as graphed in this thread the same people year after year? I have filed as poor when I worked while in school for many years. Now I am not. Never have I lived in real poverty, although I have at times had to make by on 200 a week within the last 10 years. Now I am a middle class business owner, but you didn't see that change for me in the graphs. One day when I am older like the baby boomers I hope to sell my business. For one year I will be a part of the 1%. My retirement will have to come from that. Between all the taxes and regulatory costs I pay as a business owner in addition to my personal income taxes is over 100% of my income. I will be again asked to pay by these fair minded folk up to 70% of my business when sold if they could get their tax hike. They wont bail me out if it goes bad, nor will they accept the liability if i am sued. I bear all risks.

Meanwhile, government employees who require me to produce to pay their salaries go on strike when asked to contribute 5% to their retirement fund, and wonder why less people are willing to take the risk of starting their own business, then they wonder why small business is dying. Why would someone start a business in that climate? Why not just take the safe road and try to work for government or a big business?

 

That curve could go straight into the garbage, if our illustrious Congress would simply take action to stop companies from moving out of the country, and close up loopholes.

 

When we have higher prices on the products and services we consume, sales go down, and the businesses who raised those prices say "OOOPS!", and then the prices come back down again (unless we go to the store and stupidly pay those higher prices - then it becomes our fault)

 

Half an apple is better than none. But when you consider the non-landowner who covets the owners land, it can be just as parasitic. BTW we are neighbors.

 

I do not agree that in the US all of those so called injustices occur.

You have made many claims, you have proved nothing. I know what I experienced, you don't seem to know much about anything.

What I realize is, it was failed LVT. There was valuation put on the land, it was government land, which was then occupied by refugees. There was an an attempt to recover the cost and as LVT there was no ad valorum as the improvements were not taxed. What it was was an attempt to start LVT, and it was a total failure. LVT can only be affordable in its pure theoretical state, which is highly unlikely to ever occur and if it does will only last a short time in anything other than a completely autocratic location.

Proved wrong!


Proving it wasn't LVT. LVT is always affordable, because it is what someone willingly bids in the market to use the land.[/QUOTE]One more inaccurate statement.

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I guess you young folks don't remember earlier times when people complained about the rich being so wealthy and the rest of the people poor.

 

Official poverty? what is the different between real poverty and official poverty? An artificial declaration by government does not make poverty. There is very little true poverty in the US. Relative poverty...yes, true poverty...no.

 

Not evidence of socialism succeeding Daniel. The 300 million new middle class in India came as the people worked their way into various forms of manufacturing and service industries. Their mothers and fathers mostly stayed on the colonization projects and performed subsistance agriculture. Socialism is an evil which should never be accepted in human society ever again. Socialism makes all citizens subservient to the state.

 

So what is your problem with imports again?

 

You can't stop a company from moving out of the country any more than you can stop someone from going across state lines. It has been tried and it won't work. Even without mobile capital and moves, there is still a curve past which government revenues will decrease if taxes and wages increase.

 

Here are a couple of good articles that discuss the issues of wealth concentration and capital mobility.

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/12/study-offshoring-creates-as-many-u-s-jobs-as-it-kills/

http://finance.fortune.cnn.com/2012/04/24/pay-gap-rich-poor/

Definition of 'Tax Incidence'
An economic term for the division of a tax burden between buyers and sellers. Tax incidence is related to the price elasticity of supply and demand. When supply is more elastic than demand, the tax burden falls on the buyers. If demand is more elastic than supply, producers will bear the cost of the tax.

Tax incidence reveals which group, the consumers or producers, will pay the price of a new tax. For example, the demand for cigarettes is fairly inelastic, which means that despite changes in price, the demand for cigarettes will remain relatively constant. Let's imagine the government decided to impose an increased tax on cigarettes. In this case, the producers may increase the sale price by the full amount of the tax. If consumers still purchased cigarettes in the same amount after the increase in price, it would be said that the tax incidence fell entirely on the buyers.

Go a little further and not just tax incidence but wage incidence tell us that as costs to produce increase no matter what that cost is, wage or tax, mobile capital will move. Labor then takes the hit.

 

The change in annual GDP is GDP growth...

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What happens when the selling price of a product falls lower than the cost of production of that product?

 

Yes, I see that.

 

And when supply is perfectly inelastic, like with land, the burden falls solely on the land owner. What's your obsession with citing sources that prove claims you make, and made in the past, wrong?

 

This has been addressed to death in the past, but since dnsmith insists upon repeating his falsehood:

(From the source he uses) Investopedia: "When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation."

Which landowners do. The legality of it is unimportant. Payments for land to the landowner don't create any new land, and not this unique location. No wealth creation is involved on the side of the landowner. Landowners, as landowners, put themselves in the path of others so that they may appropriate wealth others create without having to create any wealth themselves in return. Originally, 'rent' in economics specifically referred to payments made for the use of land. I think there is a very good reason the word 'rent' was used when terms like 'economic rent' or 'rent seeking' were coined. The word just perfectly describes the idea of one entity gaining wealth at the expense of another entity without reciprocation.

 

I guess that is why all land owners pay property tax on their land AND the improvements on the land.

 

Au contraire, the landowner pays his taxes or loses his land.

Again, au contraire land owners produce through direct production, leasing to other who produce directly and have as much right to capitalize on their investments as non landowners.

Rent is the term for the income from land. Rent-seeking is not specifically related to land owners or land at all. It refers to any entity, private or corporate who seek benefit without reciprocal return to society. That does not fit many land owners. Your attempts to make land owners the fall guy has fallen flat.

Maybe you will find something tomorrow to try again. Edit/Baiting/Stop Good night.

 

Fixed part in bold. Haha, I accidentally put 'Investopedia' (which is the source) where I should have put 'rent seeking'. Obviously, I posted the definition of 'rent seeking' and not of 'investopedia'.