The Distribution of Wealth in the US

turbo

I didn't say anything about fairness, so don't put words in my mouth, please. If all US citizens get access to decent preventive health care, costs for all of us insured people should drop, and the incidence of emergency-room use should drop as well - the most expensive medical care in the system.

russ_watters

The quote from the Declaration of Independence is often misunderstood, so rather than just answer the question, I'll explain what it means:

The US government was set up under the idea that all people should have equality under the law and should therefore primarily succeed in life on their own merit.

So to answer the question: Yes, imo, the American system does a good job of enforcing equality under the law. But is that fair?

russ_watters

If you weren't saying anything about fairness, then you need to reread the question you were answering and try again.

MarcoD

Yeah, it is fair, and we were discussing wealth distribution, not legalese. It is both fair and healthy for the long-term prospects of the country.

(But I know we disagree on that.)

(I should have said my country. Not so sure about the US.)

DaleSpam

So what is the moral principle which makes it fair to forcibly take wealth from an individual who has earned it and give it to an individual who has not earned it. You have made the claim of fairness, now justify your claim.

If you think that "all people are born equal" is a correct principle (I think it is too vague to be correct) then you still need to explain how you go from that premise to the conclusion that wealth redistribution is fair.

John Creighto

Well, we should be able to easily test your claim . From eyballing the following graph it looks like about 1/4 of the people are at retirement age:



http://en.wikipedia.org/wiki/File:Uspop.svg

but 1% of the people (holding 33% of the wealth) is much less then the 25% of the population at retirement age.

The total wealth in the united states is 55 trillion:


http://en.wikipedia.org/wiki/File:Graphic.png

the population of the united states is 312,340,000.

So lets say all that wealth is held by the people at retirment age and 1% of people have 33% of it. What does this give the rest of the people to retire on.

55 billion *.67%= 36.85 trillion.

Now per person at retirement age:

36.85 billion / (312340*(0.25))=471 921 000

Now over 20 years with no interest payments this is about:

23,596,000 per year.

The average salary in the united states is $32,140

However, if the money is invested well a person should be able to do much better then 23, 596 per year. If that wealth was instead spread equally around people of retirement age they would have about 35,218,000 per year without any investment income.

Anyway, there seems to be large inequities both with respect to age and within an age group.

MarcoD

Because Paris Hilton and some poor bugger in a suburb were born equally?

TheStatutoryApe

What of the issue of education? Many young people in poor areas are not interested in receiving an education. Many people who have completed college can not find jobs. So how does throwing money at education for poor people decrease the wealth gap?

I do think that education, as well as perception of education, is part of the issue but the simplicity of the "take wealth, spend it on education" response smacks of "let them eat cake". As well taking more wealth and throwing it at other issues does not seem to say much and I see no reason why we could not spend money on these things and yet still have a major gap in wealth distribution.

MarcoD

Trillion dude. Not billion. Now try again.

MarcoD

Well, if they're not interested, there is no problem. Right?

You'll never find out. If you've got many people not finding jobs, that might as well hint that you didn't educate enough people the right way to bring forth enough industry to capitalize on your investment. You'll never find out.

[ Anyway, I see the US's job problem as a problem of shipping a substantial part of their industry elsewhere. Oh yeah, and going bust in the process of doing that. Not education. ]

OmCheeto

bolding mine

You missed your calling, as a lawyer, IMHO.

But to expand upon the non-bolded statements, if I may:

There was a cute little graph running around the internet the other day with pointy finger kind of insinuations:



The fact that a few of us know that Reagan was responsible for the biggest tax decrease in quite a few years, kind of implied that a few of us knew that the graph was a bit disingenuous. Reagan was, as far as I'm concerned, responsible for our entire debt crisis, and a predominance of the inequality in wealth distribution. (Didn't someone start a thread the other day on a wealth tax?)

I would redraw the graph, but I'm getting tired of all the graphs.

DaleSpam

So how does that prove the fairness of taking money from Ms Hilton to give to Mr Bugger? And then how does that imply the justness of taking money from Steve Jobs and giving it to Joe Sixpack? Or are you going to limit yourself to redistributing Paris Hiltons wealth.

I understand your premise and your conclusion, just not the connection between the two.

D H

Talking about "fairness" when it comes to taxation leads to all kinds of disingenuous debates in which one side talks past the other. What constitutes "fairness" is very much in the eye of the beholder.

To one extreme, the only fair tax is a true flat tax: Billionaires and paupers alike should pay the same amount in taxes (not the same rate, the same amount). The end result of this kind of thinking: Everyone is poor. The infrastructure that advanced governments build and the technicala investments that advanced governments make simply could not be sustained with this kind of "fairness". To another extreme, the only fair tax is one that makes everyone exactly the same. The end result of this kind of thinking: Everyone is poor. Modern society implicitly depends on some people being hungry for power, wealth, fame. Squelch these desires and everyone suffers.

In between these extremes you will see some who claim that a fair tax is one that taxes everyone at the same rate, while others will claim that a tax is fair only if it is progressive. A huge problem with talking about "fairness" is that what constitutes "fairness" is inexorably tied up with politics. Different people have very different concepts of fairness. You can see this conceptual disconnect in action right here in this thread.

Big as this problem is, there is an even bigger problem regarding discussing whether a tax is fair. Taxation, while absolutely essential to society, is also the ultimate in unfair activities. How can one talk about "fairness" when failure to comply means armed people will come and forcibly take your money from you? With the full force of the law behind them?

"Fairness" in taxation is IMHO a silly concept unless we work very hard to define what "fairness" means.

MarcoD

Why, Ms Hilton needs a good reason to get off her pretty ***, and Mr Bugger could be helped with equal opportunities (which includes a safe environment, good housing, and the time to invest in itself.) And Mr Jobs never needed a good incentive to keep working, would end up massively wealthy in any case, and the worst Joe Sixpack is gonna do is stimulate the beer industry.

MarcoD

To be honest. I don't think it really matters. If you're redistributing wealth, any tax regime will just stabilize around some equilibrium. Tax the rich more, and they'll just take more from their companies/poor. The only reason we can't do flat taxing in my country is because the disparity with other countries would be too great.

slam7211

Honestly the idea of a fair distribution of wealth is a hard thing to argue. It would be easy if all people were born equally, but they are not. people born with more money are inherently at an advantage to those who are not. In my opinion a fair distribution of wealth is a distribution of wealth that reflects the utilitarian value of each individual, which is what capitalism is supposed to do; however, because of money passing from one individual to a family or heir (aka Paris Hilton), which he or she did not earn it breaks the system, where money is supposed to equate with success, and success with utility

DaleSpam

I agree. That is why I dislike the claim and want the supporters to either justify or retract them.