Income Inequality in America

Education is part of the solution but most of the inequality is between the rich and everyone else, including the middle class which is mostly educated. In fact, as the percent of people who have a college degree is rising, so is the income inequality. We need more than just that. I recommend better education, lower taxes for the middle class and businesses through tax hikes on the rich.

 

Education in the basics alone cannot reduce income inequality. You seem to be under the illusion that wages are determined by productiveness … they are not, and that fact has been known for over 200 years.

See: https://en.wikipedia.org/wiki/Law_of_Rent

Under the capitalist system where economic rents are privatized, if every poor working person became a proficient reader, writer and mathematician, and if these improvements in knowledge doubled their productiveness, economic rents would just rise, and rent-seekers would absorb all the extra production afforded by that increased knowledge base. In fact, it is even likely that the poor would be worse off.

The only real solution is to fully privatize the products of labor (those which do not cause injury to others), and take economic rents (through taxation) for public purposes and benefit.

 

Comfort is the enemy of greatness. It's actually slavery. Because it prevents growth and causes people and things to atrophy.

Communism has always been and always will be a utopian fantasy. It cannot work in reality because it fails to factor in human nature. What do you do with all the people like me that simply don't want to be part of your system and will never voluntarily go along with it no matter what you try to buy us off with? You still end up being Mao and Stalin; killing all the dissenters. See the problem? Your system always ends up creating tyranny. Always.

 

ALL governments are Tyranny in some form we have a Tyranny of the Industrial Elite, in Europe there was royalty, in other states Tyrants and in others priests and a holy elite there is always 10% in charge. The one Democracy Athens had major problems they killed a Admiral victorious at sea in a great battle for leaving sailors to save the remaining fleet - it was moronic and just as easy to sway by 10% of elite there.

My view was simple under the worse Communist systems if they made people at large comfortable and happy and raised them to enjoy their lives ,some would not go along but just a few, their 10% the favored communist party members and over them the super elites would never have had to use fear. Malcontents would be found, indoctrinated more or could go to perhaps remote free thought colonies where they could be happy. They however used fear and force to get what they wanted not making their people so comfortable that they would not be opposed to the state in a way to pose a threat.

Human nature largely is now they want to be comfortable, some ambitious types needs that directed to serve the society they might even gain power so they join the elite class tempering them to be of use but average people won't generally cause problems.

But if dissenters are very few say out of every 1000 people you get one you can deal with that without draconian measures that would upset the other 999. Why would I care if I was comfortable and had some freedom that seemed good enough if they took you to a remote place to live to not cause trouble I would think you would be better off and happy being who you are a mercy of the society and government that they care for you enough to put you with people like you - the oddballs.

 

If you are going to quibble about socialism, then I am going to quibble about capitalism. You can't have it both ways and not engage in special pleading.

Simply delegating a social Power to do any Thing is a form of socialism.

Would income inequality be an issue if we solved for simple poverty using existing legal and physical infrastructure in our republic.

In my opinion, Persons should have no basis to care how much the wealthiest make in our republic under our form of capitalism, if they can't claim to be in (official) poverty.

 

1st, I don't agree that rothbard made a mistake. Second, secure tenure is basically what we have now in freehold. Third, no one will be willing to secure tenure if their tax is equal to the rents the land would earn. It simply will not be worth it.

I am sure you believe an LVT will now cause the person with tenure to abandon the land, or exchange it cheap.

I think at about now some blood would be shed.

Wait a minute, so the LVT is not a single tax like most LVT fans claim will cover all of the government at all levels.

So effectively the government extorted the land from the original owner. How nice of the government.

And of course in your scenario everyone comes out ahead.

Baloney! Nothing like that can happen without an autocratic government like a dictatorship. An LVT system can never to introduced into a mature economy and the people will never go for stealing the original owners land because they know the next person they will come after may just be one of them.

I am sure you are sincere in your own mind, but I am just as sincere in my mind. Landowners as a group are no more parasites than those who do not own land and use the infrastructure the land owner paid taxes to build.

 

Not at all Armor, I own land from which I collect a net rent and the tenant pays all the taxes and the cost of construction for his own purposes. We now both make an honest living from that land.. That is proper investment.

The land owner, just like stock holders, bond holders, silent partners (financiers) et all are no more parasites on society than any other group.

 

What is the market rate for the skills of the employees? If it is $50 and hour then the wage is right. But I don't honestly see 5 workers earning their $50 an hour wage and the owners $50 million per year.

The value of labor is directly related to the workers skills and the production for the company, no more and no less.

 

You do realize that: An example of rent-seeking is when a company lobbies the government for loan subsidies, grants or tariff protection. These activities don't create any benefit for society, they just redistribute resources from the taxpayers to the special-interest group, without any special relationship to land ownership.

 

What special pleading Daniel. You have never answered that question. And I refuse to quibble. I presented you with a definition. Accept it or not. Your choice.

No Daniel. Socialism is a system by which the government either owns or totally controls production and distribution. That is why I dislike the concept of LVT as land then becomes under too much control of the government. Prosperity will never occur or last under socialist systems.

Poverty in the US is relative. We consider the lowest quintile of workers poor. If we doubled their wages tomorrow, by day after tomorrow they would still be in the bottom quintile as everyone else would also go up a notch on the pay scale.

Rich people make what rich people make without regard to poverty.
http://finance.fortune.cnn.com/2012/04/24/pay-gap-rich-poor/

 

Of course they would. Tenants don't care that there is no landowner in the equation any more and a different entity gets the money. Buyers wouldn't care that instead of paying $100,000 upfront to the landowner they now only have to pay much less than that annually for secure tenure on the land (with other taxes eliminated, including the tax on improvements). Unless they're idle speculators of course who just want to profit from increasing land values, good riddance to them I say.

You pay for what society is giving you. You get secure tenure. Pretty simple arrangement, really.

That's what the South said back in the 1800's.

Non sequitur.

He simply no longer has a government issued privilege of taking wealth from others without reciprocation.

The productive come out ahead. The landowner disappears from the economy and is replaced with the landholder, or leaseholder of the land, who pays for what he's taking so that tax burdens can be lifted off production.

The "original owner" only got it through government privilege in the first place. And nobody will come after him. He simply needs to pay for what he's taking.

The landowner getting money for doing nothing and giving up a small portion of it in taxes does not mean that it was his contributions which paid for the infrastructure. It was his tenant's contributions. Pretty simple.

 

So, the tenant does all the producing. Hold on a minute here, you just claimed the landowner pays all the taxes. Now you say your tenant pays all the taxes. You're directly contradicting yourself. You're wiggling like a fish on a hook. Anyways, it doesn't matter if the tenant pays the taxes directly himself from his contributions or whether the landowner pays it after he took it from the tenant. Either way, it is the tenant's contributions which make it all possible. The landowner hasn't done any producing, after all!

He makes an honest living. You haven't produced anything. You haven't created anything. The land would be there regardless of your existence and could be used without any other landowner ever existing too.

 

You're setting the bar lower, and lower, and lower. First of all, "an example" means just that: an example. Plus, this part "without any special relationship to land ownership." does not exist in what you're quoting from Investopedia. You added that. You're wiggling around like a fish on a hook.

Here:

(From Investopedia) "An example of rent-seeking is when a company lobbies the government for loan subsidies, grants or tariff protection. These activities don't create any benefit for society, they just redistribute resources from the taxpayers to the special-interest group."

http://www.investopedia.com/terms/r/rentseeking.asp

(The actual definition from Investopedia) Rent seeking: "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."

http://www.investopedia.com/terms/r/rentseeking.asp (same link)

Gee, I wonder why you used the "an example" portion (which you changed) rather than the actual definition. Helps you, especially with the part you added, conceal the fact that landowning is, in fact, a form of rent seeking. ALL of it. (The funny thing is, you can fit landowning even into there.)

No, landowning does not have a "special relationship" (except for the fact that it's where the term was derived from in the first place). Rent seeking is not necessarily landowning, there are others ways to take without contributing. That doesn't change the fact that ALL landowning is, in fact, rent seeking. You can sugar coat it all you want, but unless you can give prove that you created the physical space, put all the matter there, put everything there which makes it valuable, you ARE in fact making an economic gain from others without reciprocating any benefits back to society through wealth creation.

Honestly, you're almost not worth addressing any more, but I can't just let it stand like this.

 

Honestly TC I kind of liken the situation to that of a bunch of ducks flying overhead while you are hungry. You aim the shotgun at the flock and pull the trigger. No matter which duck drops, you will have dinner tonight. So too must Americans try top down and bottom up approaches. It doesn't matter if one works or they both work; but the end result hopefully is a better America.

 

A 2011 study by the CBO (Congressional Budget Office) on the distribution of income in the US from 1979 to 2007 found that after federal taxes and income transfers, the top earning 1% of households gained about 275% and that the lower earning 80% had seen their share of total income in America reduced to less than half. As of 2006, the United States had one of the highest levels of income inequality, as measured through the Gini index, among similar developed or high income countries.

FOR A BUNCH OF INTERESTING LINKS (from competing perspectives), see the following link:

http://people.stern.nyu.edu/nroubini/INEQUALI.HTM

As for recent years, see this article:

http://tcf.org/blog/detail/a-tale-of-two-recoveries

Or follow this link to wwatch a very entertaining and informative video:

http://www.huffingtonpost.com/2013/03/04/wealth-inequality-video_n_2805811.html

And finally, a history of wealth inequality in the USA, where the era of the robber-baron magnates was quite a bit worse than it is today and so was the political corruption:

http://www.aeonmagazine.com/living-together/peter-turchin-wealth-poverty/

 

I see responsible wages as that which is FAIR to the worker, by giving him a substantial % of the gross income, relative to the net incomes of the owners. IOW, don't be greedy. Don't hog all the money to yourself, especially when it's the workers who are creating that money flow, to a large degree.

In the hypothetical case, the workers each, would each be receiving (for a 40 hour week), $104,000/year.

The owners each, would be receiving $ 10 million/year.

Thus, the owners would be pocketing 96 times what the workers would be. This, I would consider immoral to an immense level.

As far as the plausability of the example ($50/hour & $10 Million/year), some of the top mutimillionaires in America, each profiting far more than $10 million/year, pay their workers minimum wage.

As far as the notion of "value of labor" is concerned, I can see that only in those extremely, severe cases where the wages would be a limiting factor to the survival of the company, such that a wage, of course, could not be paid that would keep the company from operating. Other than that, I see no use for such a notion.

 

You seem awfully sure about a system which has never been tried in a mature economic system. Especially since you believe for some odd reason that "other taxes eliminated." I don't believe it for a minute.

Yet totally impractical in the real world. Truly secure tenure is the right to hold the property for life until selling it to recoup one's investment.

And time proved them correct.

Only in the starry eyed mind of a geoist.

Very few actually do get wealth from others without reciprocation. Landowners are as contributory to a prosperous economy as any other group.

Land owners are as productive as the other members of society.Your pie in the sky ideas fall flat in real life economies.

Oh? What did the government do to give me ownership of land or rental properties? NOTHING! Your theory was good only for cave men exploring new territory for their clan.

Land owners paying taxes are the ones who do pay for infrastructure. Your pretty simple blows up in your face.

 

Nope! My purchase money went back into the economy.

The landowner almost always does.

In a net lease situation he does. The land owner paid the taxes which created the infrastructure which made the site a good location for the tenant to use to market his wares.

Nope! Various stages of development.

The only fish on a hook are those who believe introducing LVT in a mature economy has a rat's butt chance of succeeding. If we the land owners paid the taxes we would have to raise the rent to cover our costs.

The land owner produces by putting money into the economy and paying for the initial infrastructure.

I make an honest living. Along with my partners in ownership we created the opportunity for some one to make even more money and pay even more taxes, all the while the non landowning are parasites on the infrastructure created by the taxes paid by the landowner. The point is, if it wasn't such a good deal for the tenant he would not rent the place in the first place. You will never see "Burger King" (or other business relying on location) buy a lot in the middle of nowhere and expect the people to come to them. The landowner is as much part of the economies prosperity as any other member of society.

 

The bar remains in place and the Investopedia explanation is as good as any other. Rent-seeking is no more related to land owning than manufacturing corporations, or book keepers or anyone. You make a lot of claims and they are all unsupported in real life. I used an example because I was pretty sure you would not understand the definition, and I was right.

Like I said, there is nothing specific about landowning. You are stretching it to even include landowners in rent-seeker.

I concealed nothing and I was right about rent-seeking not relating to landowners to any greater extent than any other group in the economy.

Most land owners reciprocate giving benefits back to society as much as any other group. Your whole premise is based on the false conclusion that landowners do not contribute to the economy.

You can't really address anything in real life, not before, now now and not in the future. A fallacious assertion derived from a fallacious set of theories is all you have.

 

I accept that there is income inequality. I do not accept what you believe is the cause. You blame the rich, when it is not the rich responsible for the set of people not making as much as we would like them to make.http://finance.fortune.cnn.com/2012/04/24/pay-gap-rich-poor/ No more than outsourcing is a major cause of inequity of income, http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/12/study-offshoring-creates-as-many-u-s-jobs-as-it-kills/

 

It has nothing to do with greed. It has to do with how valuable a skill is to an employer. The market sets wages based on the workers are willing to accept. If we were to set artificially higher wages the first thing that would happen (assuming the employer can stay in business) would be inflationary prices putting the wager earner right back into the quintile from which he hoped to escape.

Yep!

Or $50 million, which is not in reality something 5 employees could create in profit. When you skew examples to such outrageous extremes you make the example impossible to accept.

Since the example you gave is not plausible there is no point in discussing it.

What some employers who lack integrity do is not useful in a discussion about reality.

Because you are considering an implausible situation! Get down to reality and the "value of labor" will take care of itself.

 

I want to know what should be done to make income more equal.

 

Better job training, more hard work, motivation and ambition are the only things that will make income more equal. But the most important issue is recognizing that simply because the rich make so much DOES NOT DETRACT from workers improving their income.

 

What many "armchair" economists over look is, that LAND is a primary component of capital. Capital has been described clearly by virtually all economists worth their salt as the combination of LAND, LABOR AND TIME. Removing LAND as property would eliminate one of the most important aspect of capital. Contrary to the years bone by, when capital was considered the excess production of labor, the situation has shifted to where labor as a single factor of capital is no longer the driving force of a prosperous economy.

 

Can you demonstrate how a social Power to do any Thing is any form of Capitalism. If not, then your subscription to that line of reasoning can only be that accurate.

States' and statism requires socialism to exist and is an evolution from mere capital based economies without the socialism necessary for public sector intervention in private sector markets.