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Income Inequality Doesn't Matter

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Moderate Right said:
Income Inequality Doesn’t Matter, Study Finds — Here’s What Does | Stock News & Stock Market Analysis - IBD
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yep market fluidity pretty much makes the argument of inequality moot.
there will always be rich people and poor people and always a large distance between the two of them.

however as long as lower/middle income people can maintain their buying power they are still fine.
only when the prices swing to the point that only rich people can actually afford anything does there come a problem.

that is why all this nonsense to raise floor wages to absurd levels and everything else
actually hurts everyone but the rich.

they are really the only ones that can afford the price increases.
most working people now think they are taxed to much and frankly it is true.

that is like under sanders and his help the working guy plan I would lose another 10% of my pay to the government
for nothing in return. not sure how that helps me but hey if he says it then it must be true.
 
ludin said:
yep market fluidity pretty much makes the argument of inequality moot.
there will always be rich people and poor people and always a large distance between the two of them.

however as long as lower/middle income people can maintain their buying power they are still fine.
only when the prices swing to the point that only rich people can actually afford anything does there come a problem.

that is why all this nonsense to raise floor wages to absurd levels and everything else
actually hurts everyone but the rich.

they are really the only ones that can afford the price increases.
most working people now think they are taxed to much and frankly it is true.

that is like under sanders and his help the working guy plan I would lose another 10% of my pay to the government
for nothing in return. not sure how that helps me but hey if he says it then it must be true.
Click to expand...

You'd get health care, wouldn't you?
 
Why is the OP posting an article without citing any of it, or adding his own opinion? It's like his anti MMT thread.
 
David_N said:
Why is the OP posting an article without citing any of it, or adding his own opinion? It's like his anti MMT thread.
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I suspect it is because he didn't...or can't....open the link to the original paper. I have come to this conclusion because when I supply links for him to read, it is apparent he doesn't open them.
 
Moderate Right said:
Income Inequality Doesn’t Matter, Study Finds — Here’s What Does | Stock News & Stock Market Analysis - IBD
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The problem with the author's thesis, as is in a lot of these discussions, is the flawed assumption that if "Q" or "Z" happens, then everything else stays the same. It almost never does. The more accurate point of view is that if "Q" or "Z" happen, then everybody else changes their behavior and way of doing things. The only reason we keep doing what we are doing in the same way is because (A) it is the way it is and/or (B) it suits our needs and/or (C) we can. Disrupt any one of those three factors, and we will do things differently because it is either to our benefit to do so or we have to do so.

So, lower taxes indeed sometimes raises work incentive because it is more profitable to work. That does not automatically translate, as the author, implied in less revenues that provide buying power to the poor. When taxes are cut wisely and prudently, you do have more work incentive, and when more people are working, more people are paying taxes that usually more than offsets any loss revenues due to tax reductions. On the other hand if higher taxes result in loss of work incentive or people looking for cheaper products elsewhere, the results can be a negative across the board.

In other words, you cannot just look at the raw numbers but you also have to consider the response of people to changes in policy that affect them.
 
Moderate Right said:
Income Inequality Doesn’t Matter, Study Finds — Here’s What Does | Stock News & Stock Market Analysis - IBD
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Right off, the study's conclusions do not match the assumption that "income inequality doesn't matter."

The conclusion suggests more studies on the relationship of taxation to total lifetime spending inequality over the lifetime of those in the various income quintiles. The takeaway from this study is "Inequality and fiscal progressivity shouldn’t be studied in isolation or in a piecemeal fashion, nor can they be accurately assessed by mixing very different age cohorts in the analysis." That does not mean that income inequality does not matter, it means not taking one aspect of the study of income inequality and amplifying that meaning over all others (p. 34 - 35.)

The study also has to make a series of assumptions on everything from tax incidence and results on capital, to labor force participation factors, to mortality based on not just income quintile as a single "cohort" but also system dependencies such as Social Security, SNAP (the study calls Food Stamps in the traditional sense,) Medicare and Medicaid, etc.

Economic studies are known for assumptions, and while the vote is out on these assumptions being spot on or not the data suggests the conclusion as stated. Not some asinine assumption that income inequality does not matter. Further, the study does not suggest the removal of all government methods to try to help income inequality (as the "Solution Method" to the math, p 47, indicates on applied impact over the lifetime of those at various income quintiles.)

"What does matter" is what we have always known it to be, doing just enough to ensure healthy participation in our economic model across all income quintiles balanced against not doing so much as to upset economic conditions for growth and healthy return. It is not all or nothing, never has been. The study itself makes some conservative lean assumptions on the relationships of taxation to economic impact but in itself does not suggest some utopian trickle down economic theory either. Again, balance.

Included is the actual study (that I doubt many of you would read anyway)...

http://www.kotlikoff.net/sites/defa...gressivity, and Marginal Taxation 3-14-16.pdf

And I forgot to add... right in the "study"... P1

"NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications."
 
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Moderate Right said:
Income Inequality Doesn’t Matter, Study Finds — Here’s What Does | Stock News & Stock Market Analysis - IBD
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I'm still trying to make sense of this actual study. To me it sounds like they are saying that the gap in lifetime spending is smaller than the gap in lifetime earnings. I'd like to say "duh" for the following reasons:
- Does this really represent more equality or that the top 1% simply can't spend all their money before they die
- Making a big deal about the top 1% vs the bottom QUINTILE is absurd. A 20x difference in population and the bottom quintile STILL isn't equal. From the same study:

The top 1, 5, and 20 percent of the 40-49 year-old cohort own 18.9 percent, 40.1, and 69.5 percent of all wealth (financial assets plus home and other real estate equity less financial liabilities), respectively. But these three groups account for only 9.2, 22.4, and 48.1 percent of the cohort’s spending power as measured by remaining lifetime resources net of remaining lifetime net taxes. Those in the lowest quintile have only 2.1 percent of wealth but 6.9 percent of the spending power. The next three quintiles also each account for much more of the cohort’s spending power than of its wealth holdings. B
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so top quintile compared to bottom quintile is 48.1 vs 6.9. Really? We're celebrating about this?

- Finally, this article credits our progressive system over and over for the equality we do have. I could not find anything indicating that further progressivity disincentivizes work.
 
David_N said:
Why is the OP posting an article without citing any of it, or adding his own opinion? It's like his anti MMT thread.
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Or like ANY pro-MMT thread.
 
David_N said:
Why is the OP posting an article without citing any of it, or adding his own opinion? It's like his anti MMT thread.
Click to expand...

I was just throwing it out their for discussion.
 
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