• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

So How Much Income Inequality is TOO Much Income Inequality?

How much income inequality is TOO much income inequality?

  • I am a centrist, and I don't think there should be a limit on the level of income inequality.

    Votes: 0 0.0%
  • I am right-leaning, and the current level is acceptable, but should not be higher

    Votes: 0 0.0%

  • Total voters
    38

Glen Contrarian

DP Veteran
Joined
Jun 21, 2013
Messages
17,688
Reaction score
8,046
Location
Bernie to the left of me, Hillary to the right, he
Gender
Male
Political Leaning
Progressive
The news came out today that OXFAM found that by 2016, the richest 1% will control half of all the world's wealth.

That begs the question, then - what level of income inequality do you believe should be the upper limit, if there should be any limit at all? And if there should be a limit, how would that be achieved, since this is obviously something that can't be mandated by governments?
 
The news came out today that OXFAM found that by 2016, the richest 1% will control half of all the world's wealth.

That begs the question, then - what level of income inequality do you believe should be the upper limit, if there should be any limit at all? And if there should be a limit, how would that be achieved, since this is obviously something that can't be mandated by governments?
A progressive tax system, more you make, more you pay.

Do the wealthy pay lower taxes than the middle class?

The study, from the Institute on Taxation and Economic Policy, found that "virtually every state's tax system is fundamentally unfair, taking a much greater share of income from low- and middle-income families than from wealthy families." It added that state and local tax systems are "indirectly contributing to growing income inequality by taxing low- and middle-income households at significantly higher rates than wealthy taxpayers."

In other words, it said the tax systems are "upside down," with the poor paying more and the rich paying less. Overall, the poorest 20 percent of Americans paid an average of 10.9 percent of their income in state and local taxes and the middle 20 percent of Americans paid 9.4 percent. The top 1 percent, meanwhile, pay only 5.4 percent of their income to state and local taxes.

You'll Never Guess Which State Has the Nation's Most Unfair Taxes - 1

The study, published by the nonpartisan Institute on Taxation and Economic Policy, finds the poorest 20% of Washington’s population pay almost 17% of their income in taxes, while the richest 1% pay just 2.4% of their earnings. The middle 60% of earners are taxed slightly more than 10% of their income.
 
According to Pareto's rule, the richest 20% should control 80% of the wealth in a stable economy. This is probably not the case today.
 
The news came out today that OXFAM found that by 2016, the richest 1% will control half of all the world's wealth.

That begs the question, then - what level of income inequality do you believe should be the upper limit, if there should be any limit at all? And if there should be a limit, how would that be achieved, since this is obviously something that can't be mandated by governments?

There is no reason to be a limit other than the natural bounds of 0 and 100%. If you have a roof over your head and food to eat, the rest is a superfluous exercise in futility.
 
The news came out today that OXFAM found that by 2016, the richest 1% will control half of all the world's wealth. That begs the question, then - what level of income inequality do you believe should be the upper limit, if there should be any limit at all? And if there should be a limit, how would that be achieved, since this is obviously something that can't be mandated by governments?
The current level of wealth and income inequality has been created by our public policies. It's not something that is inherent in a free market. Our policies (minimum wage, death tax, income/capital gains progressiveness, credit ratings/requirements) have been structured so that the more wealth you have, the more you can lower your costs and therefore achieve a higher net rate of return on your assets.

For example, the long-term capital gain rate is practically flat (15%) for all but the highest tax bracket, which it is then bumped up to 20%. That's why Warren Buffet (who derives all of his income from capital gains) has a lower tax burden than his secretary, because practically all of her income qualifies as ordinary income (which for ordinary income, $37K is where it jumps from 15% to 25%).

Throw in the scalped death tax, and that's the beginning of old wealth families where you find out that Junior Jr. literally hasn't worked a single day in his life.

So How Much Income Inequality is TOO Much Income Inequality?
In the last thread I pointed out that the "ideal" rate is debatable. For some economic actors the high levels of inequality is good (e.g. fund managers), and for some economic actors really low level of inequality is best (e.g. manufacturers of high-end normal goods).

Regardless too much income inequality is the level at which (1) economic mobility is threatened, (2) consumers discretionary income is being squeezed and (3) it's affecting political institutions.
 
There is no reason to be a limit other than the natural bounds of 0 and 100%. If you have a roof over your head and food to eat, the rest is a superfluous exercise in futility.
Hi! It's the US economy here. Did you know that 70% of my GDP is made up of consumer spending?

Meaning that I will choke and die in a spectacular firey fashion should the lowest four quintiles of Americans by income not have superfluous discretionary income.





Edit: " Discretionary income is disposable income (after-tax income), minus all payments that are necessary to meet current bills. It is the amount of an individual's income available for spending after the essentials (such as food, clothing, and shelter) have been taken care of." - Wiki
 
Last edited:
There is no reason to be a limit other than the natural bounds of 0 and 100%. If you have a roof over your head and food to eat, the rest is a superfluous exercise in futility.

Well, I'm sure you have no problem giving up your computer and internet access, your refrigerator, your electricity, your ability to wash and iron your clothes, your car...and even access to public transportation. Just walk to work, right? That's not too much to ask of those who have to commute a half-hour or more by car to get to their work, is it?

After all, most people in third-world nations do have a roof of their heads and food to eat - there's no good reason why we shouldn't live just like them, is there?
 
The news came out today that OXFAM found that by 2016, the richest 1% will control half of all the world's wealth.

That begs the question, then - what level of income inequality do you believe should be the upper limit, if there should be any limit at all? And if there should be a limit, how would that be achieved, since this is obviously something that can't be mandated by governments?

good. and one day, I hope the one percent unite rather than halving half supporting big government in a desire to get more power. and once united we can crush the idiotic socialist nonsense that wealth should be limited
 
A progressive tax system, more you make, more you pay.

Do the wealthy pay lower taxes than the middle class?

The study, from the Institute on Taxation and Economic Policy, found that "virtually every state's tax system is fundamentally unfair, taking a much greater share of income from low- and middle-income families than from wealthy families." It added that state and local tax systems are "indirectly contributing to growing income inequality by taxing low- and middle-income households at significantly higher rates than wealthy taxpayers."

In other words, it said the tax systems are "upside down," with the poor paying more and the rich paying less. Overall, the poorest 20 percent of Americans paid an average of 10.9 percent of their income in state and local taxes and the middle 20 percent of Americans paid 9.4 percent. The top 1 percent, meanwhile, pay only 5.4 percent of their income to state and local taxes.

You'll Never Guess Which State Has the Nation's Most Unfair Taxes - 1

The study, published by the nonpartisan Institute on Taxation and Economic Policy, finds the poorest 20% of Washington’s population pay almost 17% of their income in taxes, while the richest 1% pay just 2.4% of their earnings. The middle 60% of earners are taxed slightly more than 10% of their income.

this is crap for several reasons

it mixes non progressive taxes with progressive taxes to argue that the entire sum of all taxes should be progressive

it ignores the fact that the poor pay state taxes with money they have been given by the government and thus its net tax payers who are actually paying the taxes of the poor-not the poor themselves

it also ignores the fact that the rich pay many more actual dollars for the same citizenship benefits as the poor but this study ignores that the value I receive for paying a half million a year in taxes is no greater than what someone on Public assistance gets from the government
 
The current level of wealth and income inequality has been created by our public policies. It's not something that is inherent in a free market.

And the task of stabilizing an economy through public policy has long been proved essential.

Every time a truly free market has existed in human history, it led to manic speculation, followed by complete and utter economic collapse. No amount of silly libertarianism can refute this pattern.
 
The current level of wealth and income inequality has been created by our public policies. It's not something that is inherent in a free market.

You know what is inherent in a free market? Policy being for sale.
 
Not sure, but to a significant extent, the world's most wealthy have always overwhelmingly dominated the collective pool.

I'm not particularly impressed by these estimates.
 
The news came out today that OXFAM found that by 2016, the richest 1% will control half of all the world's wealth.

That begs the question, then - what level of income inequality do you believe should be the upper limit, if there should be any limit at all? And if there should be a limit, how would that be achieved, since this is obviously something that can't be mandated by governments?

Funny anyone should worry about income inequality, when it is the inequal distribution of wealth that is probably the problem.
 
Funny anyone should worry about income inequality, when it is the inequal distribution of wealth that is probably the problem.

Are you trying to claim that there's no positive correlation between one and the other?
 
Are you trying to claim that there's no positive correlation between one and the other?

The economic implications and any cures are very much different, depending on which one concentrates on.
 
good. and one day, I hope the one percent unite rather than halving half supporting big government in a desire to get more power. and once united we can crush the idiotic socialist nonsense that wealth should be limited

Why wait till that "one day"? All you have to do is to move to almost any poor third-world nation and you can have that RIGHT NOW!
 
Perhaps, but that statement does nothing to address my question.

It would mean explaining the correlation and why income inequality is not really a problem, but a necessary feature of healthy economies.
 
good. and one day, I hope the one percent unite rather than halving half supporting big government in a desire to get more power. and once united we can crush the idiotic socialist nonsense that wealth should be limited

It's that kind of thinking that gives everyone else thoughts of endorsing the Guillotine Party.
 
And the task of stabilizing an economy through public policy has long been proved essential. Every time a truly free market has existed in human history, it led to manic speculation, followed by complete and utter economic collapse. No amount of silly libertarianism can refute this pattern.
You know what is inherent in a free market? Policy being for sale.
LOL. The last thread I was debating the conservative posters, and like them, both of you failed to actually comment on what I said.

I'm a consequentialist libertarian. Meaning that I'm up and all for a free market economy where prices are set by the forces of supply and demand, with diverse highly competitive markets in which the means of production are primarily privately owned and operated as for-profit; BUT at the same time I don't believe that people/organizations are completely rational actors, or that market failures are made up. Which all of that doesn't have much to do with the topic at hand.

And @DifferentDrummr - Pareto's principle is an observation. It's not guidance on what is efficient or optimal.
 
You can not have a genuine representational (or any other type) democracy with extreme concentration of wealth. Wealth is political power. Anything resembling genuine free enterprise can not survive with extreme concnetration of wealth.* Without democracy and protection of rights you are not free.

*Example: You want to open a store that competes with a chain store owned by an extremely wealthy person. That person and/or the corporation can use campaign donations and other methods of influence using money to get the government to prohibit that store from opening.
 
It would mean explaining the correlation and why income inequality is not really a problem, but a necessary feature of healthy economies.
Of course income/wealth inequality is necessary and healthy. It's pure and simple incentive, and a core right to boot.

However, joG, you fail to mention that there are levels of income/wealth inequality. If there's a Gini scale ( 0 - 100 from perfect equality to perfect inequality) a 10 is not the same as a 20, 30, 40 ... 90, 100.

Are you trying to claim that there's no positive correlation between one and the other?
Obviously there is.
 
So How Much Income Inequality is TOO Much Income Inequality?

there is a level at which it causes the economy to become unstable.

US_BNKFAIL1211_SC.jpg

the precise location of that specific point is up for debate, and is probably somewhat fluid.
 
Of course income/wealth inequality is necessary and healthy. It's pure and simple incentive, and a core right to boot.

However, joG, you fail to mention that there are levels of income/wealth inequality. If there's a Gini scale ( 0 - 100 from perfect equality to perfect inequality) a 10 is not the same as a 20, 30, 40 ... 90, 100.


Obviously there is.

True. It is also true that the gini on its own does not say very much about the efficiency of the society or its economy.
 
The news came out today that OXFAM found that by 2016, the richest 1% will control half of all the world's wealth.

That begs the question, then - what level of income inequality do you believe should be the upper limit, if there should be any limit at all? And if there should be a limit, how would that be achieved, since this is obviously something that can't be mandated by governments?


wealth and income are two very different things

which one are we discussing?

income is based on skills and most people progress through the income levels until they hit the limit for their particular field

the worst plumber will make x, and the best will make y......and where you live, and the skillset you have in the field will determine how much you get

wealth is a whole different ballgame......too many people got burned back in 07-08 who were middle class with 401k's....and as the market tanked they got out

anyone who stayed in has not only recouped what was lost, but added considerably more

that is why the RICH have gotten richer.....they never sold......they continued to buy......and the prices rebounded big time

so they will control more and more of the wealth....on paper, mostly in the form of stocks and bonds

mom and pop, if they stayed in the market have that, and their house which has also rebounded quite nicely since the drop off the cliff

so, what are we discussing.......wealth or income?
 
Back
Top Bottom