Fixing Inequality through Taxes

I would like a leftist's view of this stance. I have waited long enough I guess?

 

This is a cornerstone of the liberal belief system. They believe rich people make too much money - and none of you leftists have commented upon this explanation?

Do you not feel comfortable discussing this topic?

 

Still waiting for any liberal with an opinion on this most important topic.

 

The liberals must agree that it is our currency management system - neo-Keynesianism - which is to blame for the wealth gap then?

 

I was under the impression that the topic of the MASSIVE wealth gap was important to liberals. That it was a threat to our country.

What did liberals say that too large a wealth gap was going to cause again?

 

We had growth in the money supply before the inequality gap started skyrocketing in 1981.



Something else happened that year.

 

I don't see a single thing in your response that refutes what I am stating, and - in fact - it may have done the opposite. See the rapid growth in the 'Roaring 20's'? When an economy explodes, the top incomes will do best BY MATHEMATICAL NECESSITY.

The Great Depression decimated the top quintiles the most - they had the most to lose - so the recovery took a very long time.

The M0 chart is exponential, and as such any economic shifts that lead to increased productivity will likewise have an exponential consequence. Those positioned to take advantage will realize exponentially increased gains.

I think you are trying to blame Reagan, but you may be unwittingly doing the opposite. During Reagan, all income quintiles increased their basis, but you're simply focusing on only the top quintile, which - obviously - will increase at the fastest rate, which is the whole premise of my post.

So I ask you this: with an M0 metric vastly exploding, how is it possible that the wealth gap wouldn't explode with it?

 

The gross inequality in wealth was created by taxation policies, and can be redressed via taxation policies.

The principle obstacle is that the elite in whom the nation's wealth has become so dangerously concentrated have deployed a portion of their vast resources to perpetuate their windfall.

They buy the politicians that keep their cash cow on life support, and those pols have now enabled the fat cats to do so under cover of anonimy in order that the revelatory question, Cui bono? cannot be answered by the average citizen.

Begin with demanding transparency in campaign funding and "Follow the money" will be revelatory for all but the most ideologically-hidebound.

 

We've had exploding and non-exploding economies, and slow and fast growing money supplies, and recessions and expansions before and since 1981, when income inequality started skyrocketing:



There is no reason why the middle class could not share proportionately in the economic gains, whatever you want to attribute them to, as it did in the 1940s-1970s.

That obviously isn't what caused income inequality to skyrocket in 1981, when the richest started getting a bigger and bigger share of the nation's income and wealth, at the expense of the middle class.

Something else happened that year.

I think you, like the rest of the 1% apologists on the board, are trying to pretend that the Reagan "trickle down" revolution, designed to make the richest far richer, didn't accomplish exactly what it was intended to do. For obvious reasons.

 

I still don't see anything in your new graph which refutes what I'm saying. The Great Depression destroyed an incredible amount of accumulated wealth, and that is why the chart takes a nose dive, and takes several decades to recover. Economies - and the truly wealthy within them - take a while to recover, and often are required to wait for great economic stimulus in order to do so.

That stimulus was clearly Reagan's initiatives, as the chart demonstrates.

Do you have a chart which shows lower incomes doing better than higher incomes during that lull period - or was the problem that NO ONE was really making much headway wrt wealth accumulation?

Or do you have some sort of unjustifiable mentality that - exponential math be damned - if the poor aren't improving their lot by a certain amount, the wealthy should not be either?

Without considering that all income quintiles are mathematically locked to one another (which is why all charts displaying income quintiles look proportionate to one another)?

What you seem to be saying is that regardless of how well the best and brightest (and most willing to go into hock/risk/work to acquire venture capital) do when a Government reduces its obstructionism, everyone should somehow have a part in that?

Without actually taking individual action to improve their own personal quintile?

Quintiles aren't people. Let me highlight that:

Quintiles aren't people.

These charts lie with statistics. The charts show an income or worth range within a quintile, but only one of the quintiles do not have an upper mathematical limit.

Let me be really clear on that again. Of course the highest quintile is going to chart as the most upwardly driven: it is the only quintile for which there isn't another line up to which to jump!

Do you understand the implication?

If you are in one of the lower quintiles, and you suddenly improve your personal situation (ie: go to school; earn a degree, suddenly get a job which pays much better than you ever did before), you jump up on to another line, but THAT line is relative to the line below it, and the squiggly line above it.

Only the TOP line has no such metric. So YES: the TOP line contains ALL accomplishment; ALL economic improvement once the top 5th quintile level is reached (or top 1%, or whatever).

THIS MEANS THAT THE CLAIMS OF THE WEALTHY DOING TOO WELL ARE ALL PROPAGANDA.

You are either missing the point, or trying to obfuscate the point. I hope it is the former. If someone actually DID WELL as a middle class squiggly line participant, THEY WOULD NO LONGER BE REPRESENTED BY THE MIDDLE CLASS SQUIGGLY LINE.

So tell me.

How many formerly middle class people (like me, before I improved my financial situation), actually become UPPER class, and become part of the manipulation of statistics which invent a problem?

Yeah. A true government initiative to GTH out of the way of true wealth production was instigated. Ronald Reagan reduced the Government's ability to be a sucking leech.

No. Like I said, it made the rich far richer, as ANY good economic climate will do. What it ALSO did was make the rich FAR MORE NUMEROUS.

The only charts which show anything negative regarding the lower classes are those which lie with statistics. They claim a shrinking ratio of what middle income means when compared to GDP, for instance. Or they try to graph that middle income levels aren't growing as fast as upper income levels.

That is just math. 5% interest on a bank account with $1,000,000 in it will accumulate more GROWTH than 5% interest on an account with $20 in it. If you graphed that, you can make middle income 'sufferers' look truly suffering.

It is a lie. You can either participate in the lie, and continue to foment a class war, or you can join me in exposing it, and the bastardization of the inevitable math utilized to build a false narrative.

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No.

You either don't understand the issue, or you are a willing accomplice in the leftist class war taking place designed to tear down our prosperity.

Read my posts on this topic. If you don't understand something, let me know.

 

Let me make it simple (too simple, really, but I risk people becoming confused about the point being attempted if I make it more realistic):

Let's start with 5 people of exactly equal financial wherewithall. By definition, there are no quintiles; they are all represented by one squiggly (in truth, actually flat) line.

Now, one of the 5 invents something. That person suddenly is in possession of a wealth-producing idea/product/whatever. Let's say that person hires one of the other five, and gives them a great salary/options/whatever.

Now, your chart representing the quintiles really only has three lines. One line - the line that used to represent 5 people, and is flat; one line - a line which appears to go up at a 45 degree angle - which represents the improved economic situation of the person who was hired by the inventor...and one line which has shot STRAIGHT UP.

That line that shot straight up no longer has anything to do but shoot STRAIGHT UP, because - in my example, just as in any chart which attempts to skew perceptions of the "top 1%" - there is no upward limit to draw out which would necessitate yet another line.

Do you understand?

That person who invented and became wealthy didn't do anything to the other three who weren't involved, but did help the 4th person who was hired.

What claim should the other 3 have to the line that shot straight up?

Should I actually draw out that graph to make the point even more clear?

 

IMO, this is one of the most important weapons that Socialists use to attempt to tear down the incredible economic machine which is created by Entrepreneurism and our Capitalist system, and I invite all fiscal Conservatives - many of which I believe do not understand this at all - to join me and spreading the word about how exactly this manipulation of statistics is taking place. There are two main legs to this "Alinskyite" (Marxist, in reality) strategy:

1) Employ Keynesianism to by necessity explode the money supply, automatically creating an artificially contrived "wealth gap" (in 1920, we had ~4.3 Billion in circulation; now we have 4 TRILLION in circulation - and I can guarantee that our population numbers did not keep up);

2) Draw pretty charts which lie, using "economic quintiles" to try to state a case that because the TOP squiggly line increased faster than the rest, it is proof of some sort of injustice. As I'm stating, it is a lie because it doesn't do two things:

(a] It ignores economic mobility, which discusses how fast an economy allows someone in the lowest quintiles to move into upper quintiles;

(b] It fails to explain the math of what happens when you have a top quintile chart (which is IMO the most easily confused point). If I increase my income from 80k to 150k, I can no longer help the 3rd quintile line, because I'm no longer in the 3rd quintile. I'm helping the 4th quintile now.

But the key is understanding that if I increase my income/net worth from 1.2 million a year to 500 million a year, I CONTINUE TO HELP THAT TOP QUINTILE SQUIGGLY LINE EXPLODE IN RELATION TO THE OTHER 4 LINES.

You people get that?

Do. You. Get. That.

 

The inevitable "Leftist!" fixation seems to be the hallmark of the hardcore ideologue these days, and it prevents your grasping the reality.

The growth of the middle class for decades under the enlightened policies that followed WWII were reversed.

Whether the nation continues to devolve into another "Golden Age" whereby a huge percentage of national wealth is restricted to the pockets of the precious few remains to be seen, but I am of the impression that your average American regards it as already having gone much too far.

 

It refutes it completely. You're trying to argue that inequality has skyrocketed since 1981 because of factors like the money supply and economy. Those factors existed before and since 1981. They don't explain why inequality would suddenly start skyrocketing in 1981.

Wrong, on several grounds. First, the chart doesn't measure accumulated wealth. There is nothing to "recovery". Second, the GD was in 1929-1933, and we see inequality falling in the early 1940s, more than a decade later. Finally, the economy fully recovered from the GD by the 1940s, if not earlier.

So what does that have to do with inequality skyrocketing in 1981?

The chart doesn't demonstrate anything about stimulus. The chart demonstrates that the share of the nation's income and wealth going to the richest started skyrocketing in 1981. There are several good reasons to attribute that phenomenon to Reagan's "trickle down" policies.

That wasn't the problem at all. The income and thus wealth produced by the nation as measured by GDP grew faster from 1945-1980 than it has since.

But in 1945-1980 that growth was shared with the middle classes. Since 1981 it has not.

I have a mentality that all income classes of Americans should share in the nation's growth and prosperity.

Since 1980 the richest 1% have seen their share of the nations' income and wealth double to about 20% and 40%, respectively. The bottom 90% have seen their share of the nation's income drop from about 65% to about 50%.

Do you have some sort of unjustifiable mentality that - exponential math be damned - if the rich are not getting a bigger and bigger share of the nation's income and wealth, they should get more and more of the nation's income and wealth and the middle class and poor less?

Many 1% apologists do. For some, or many, more is never enough?

Don't understand what you are trying to say.

See above. The "best and brightest" did not suddenly start going into hock/risk/work in 1981 that explains why inequality started skyrocketing.

Something else happened that year.

I don't know what point you are trying to make. A quintile is a fifth of a population segment.

First, the charts don't show a quintile at all. Second, feel free to prove the data is a lie.

1% apologists frequently make baseless claims like that when the data contradicts their positions.

Not true at all. There is no reason why the top 1% necessarily has to get a larger and larger share of the nation's income simply because they are in the highest quintile. See e.g. 1945-1980.

Then someone else drops into the lowest quintile. And if that happened enough, we'd see the middle classes keeping up.

But that hasn't happened since 1981.

This is silly nonsense.

The top quintile has never had an upper limit. That was true before 1981 as well as after.

That doesn't explain inequality skyrocketing starting in 1981. Something else happened that year.

See above.

What difference does it make? You seem to not comprehend that if one person moves up out of the middle class, someone else who was in the upper class drops into the middle class, by definition. If you want to discuss class mobility, If you look at statistics, what you will find that class mobility has actually decreased.

But irrespective, the middle classes have not shared in the nation's growth and prosperity since 1981.

We tried that in 2000-08. Once was enough, thanks.

Simply false. We had economic booms before 1981 and the middle classes shared in the prosperity. GDP growth in the 1950s and 1960s were better overall than anytime since. The next best period was 1993-2000.

That is exactly what the graphs and data show.

Family median income 2012 dollars
http://www.census.gov/hhes/www/income/data/historical/families/2012/F06AR_2012.xls

Year - income
2012 62,241
1979 57,734
1953 31,929

In the 26 years from 1953 to 1979, real median family income (in inflation adjusted terms) grew by 81%.

In the 33 years from 1979 to 2012, real median family income (in inflation adjusted terms) grew by 8%.


http://bea.gov/national/nipaweb/SelectTable.asp?Selected=N

In the 26 years from 1953 to 1979, real GDP (in inflation adjusted terms) grew by 126.4%

In the 33 years from 1979 to 2012, real GDP (in inflation adjusted terms) grew by 137.9%

http://bea.gov/national/xls/gdplev.xls

The trillions of growth in income and wealth have not been shared with the middle classes since the Reagan "trickle down" revolution.

Sure. If you institute policies that increase the richest bank accounts, they will accumulate faster. Especially if you institute a special low 15% maximum tax rate on their investment income, while working people pay up to 35% PLUS FICA taxes.

But the richest had more investments than the middle class before 1981 too, when inequality started skyrocketing. That fact has always been. That doesn't explain skyrocketing inequality starting in 1981.

Something else happened that year.

No lie at all. The data is there in front of your eyes. You just don't want to acknowledge it. The only lie is the old 1% apologist excuses for the Reagan "trickle down" policies that have helped redistribute so much of the nation's income and wealth to the richest from the middle class.

Which is a major reason, along with Republican austerity, our economic growth has been so sluggish.

 

Fixing inequality, in our country is not only a fiction, but it's an utopia too!
It's not profitable for many corporations and if it's not profitable for corporations - it's not profitable for our government too. Simple logic!

 

Sure, what your chart shows is going from a state of complete equality of income to a distribution of income. The chart would show the income of the top 20% going from 20% of the total income to 40% or whatever it is.

Which is fine as long as it is reasonable. I'm certainly not arguing that we should have complete equality of income.

But if we had the top 20% going to getting 65% of the total income while the other 80% drop from 80% to 35% and not sharing in the growth in income and wealth -- which is more akin to what we've seen in this country over the past 35 years since the Reagan "trickle down" revolution, then yes, I think most would see a problem with that. The claim the other 4 have is that they participated in creating the wealth.

Should I actually draw out that graph to make the point even more clear?

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Corporations pay only a small percentage of overall federal taxes. As more of economic gains go into corporate profits and investment returns for the richest, the Govt gets less revenue because investments are only taxes at 20% (15% for years until 2012) while earned income is taxed at up to 39% plus FICA taxes too.

 

We had economic mobility, investments, money supply growth, and economic booms in the decades before 1981 to. That is not what caused inequality to start skyrocketing that year.



No, something else happened in 1981.

 

The irony is that if anyone point out how the richest 1% have doubled their share of the nation's income and wealth, to about 20% and 40%, since the Reagan "trickle down" revolution, they cry "class warfare".

The truth is, they've been waging class warfare against the middle classes since they got Reagan in office. And winning it. But they continue the war still, as this thread proves.

Because for some, or many, more is never enough.

 

Notice how this choice of words makes it sound as if "the nation" just happens to have a certain amount of income and then "shares" of its income are doled out, and unfairly at that, with the rich getting more than their fair share.

This is very collectivist thinking. Individuals, not "the nation", have incomes. Shares are not doled out.

 

I am grateful to Sammy Brownback for his Red State Model. He, with the complicity of the state's radical legislature, channeled the Gipper without the political restraints that prevented him from straying even further into Aynrandistan.

Results of slashing taxes on the wealthy and businesses in Kansas: monumental deficits, lowered bond rating, feeble job growth, slashed education budgets, and a sleazy attempt to raise now desperately-needed revenue by proposing enormous tax increases on the poor via booze and butts.

The empirical reality devastates the most febrile ideological dogma.


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The nation does have a certain amount of income each year. Its called gross personal income.

http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1 Table 2.1#reqid=9&step=3&isuri=1&903=58

 

Yes, everyone knows this fact. It is your collectivist language I was pointing out.

 

Point out away. Name calling is a frequent tool of the 1% apologists who cannot defend their position by logical and factual means.

 

I don't have a position. The nation (which is to say the people of the nation) have chosen to give more money to rich people of late. This choice of theirs has you all upset for some reason. I still don't understand why.

 

Wrong, we get more hugely revenue at the lower capital gains rates as you have been shown repeatedly. Take off you envy glasses.