The Distribution of Wealth in the US

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In summary: What is a reasonable distribution of wealth? but...In summary, what do you think the results of the Occupy movement will be?In summary, I think the Occupy movement will be successful in convincing more Americans that something needs to be done about the wealth inequality.
  • #1
Ivan Seeking
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We had another thread addressing this issue and it was locked due to some problem with one source linked. What is a reasonable distribution of wealth? From my point of view, if what we see today is what our system is intended to produce, or if this is the best we can do under our system, then I reject our system. I expect more. I expect a system that leans towards justice and fairness. But I don't think the results are the ideal that we strive to achieve. I think most Americans want a system that is fundamentally fair - one that doesn't give an unreasonable advantage to the uber rich.

Some of the information may come as a surprise to many people. In fact, I know it will be a surprise and then some, because of a recent study (Norton & Ariely, 2010) showing that most Americans (high income or low income, female or male, young or old, Republican or Democrat) have no idea just how concentrated the wealth distribution actually is. More on that a bit later...
http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
 
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  • #2
Propaganda, not science.

He asserts that class is the major factor here. It's not - you can see from census and BLS reports that what matters most is age. The wealthiest people are those who have either just retired or are just about to retire. Ignoring that is just bad science.

Perhaps his conclusion is right, but his argument is lousy.
 
  • #3
Ivan Seeking said:
What is a reasonable distribution of wealth? ... I expect a system that leans towards justice and fairness.
I think this is an interesting question, and I have a follow-up question of my own: What are the rules of justice and fairness by which it becomes morally necessary to forcibly take money earned by one man and give it to another man who has not earned it?

For example, in what way is it just or fair to take money from someone who is hard working and rich and give it to someone who is lazy and poor? Or, in what way is it just or fair to take money from someone who is hard working in a economically valuable role (like Steve Jobs) and give it to someone who is hard working in a less economically valuable role (like a mediocre poet)?

What principle of justice and fairness requires the same outcome for different efforts?
 
  • #4
DaleSpam said:
What principle of justice and fairness requires the same outcome for different efforts?
How about a minimum outcome in the case of access to quality healthcare, college education, etc?
 
  • #5
DaleSpam said:
For example, in what way is it just or fair to take money from someone who is hard working and rich and give it to someone who is lazy and poor?

Your question is unanswerable since it is a Morton's Fork. If you change the question, you might find the answers yourself.

For completeness, a verbatim copy from Wikipedia:

Morton's Fork, a choice between two equally unpleasant options, is often a false dilemma. The phrase originates from an argument for taxing English nobles:

"Either the nobles of this country appear wealthy, in which case they can be taxed for good; or they appear poor, in which case they are living frugally and must have immense savings, which can be taxed for good."

This is a false dilemma and a catch-22, because it fails to allow for the possibility that some members of the nobility may in fact lack liquid assets as well as the probability that those who appear poor also lack liquid assets.
 
  • #6
MarcoD said:
Your question is unanswerable since it is a Morton's Fork. If you change the question, you might find the answers yourself.
If one group of people are going to be stripped of their earnings and another group of people given unearned money under the banner of "fairness and justice" then this is a question which must be answered. How is this just and fair?

Btw, this is not a Morton's Fork, I am not presenting any false dilemma. I am merely asking for an explanation of the moral justification for something that is explicitly claimed to be morally just.
 
  • #7
Vanadium 50 said:
Propaganda, not science.

He asserts that class is the major factor here. It's not - you can see from census and BLS reports that what matters most is age. The wealthiest people are those who have either just retired or are just about to retire. Ignoring that is just bad science.

Perhaps his conclusion is right, but his argument is lousy.

Is the following propaganda?

At Liberty Park, the nerve centre of the occupation, more than a thousand people gather every day to debate, discuss and organise what to do about our failed system that has allowed the 400 richest Americans at the top to amass more wealth than the 180 million Americans at the bottom.

My question is not rhetorical. Is the quote true?

My apologies for missing the locked thread, but I'm stealing https://www.physicsforums.com/showpost.php?p=3522652&postcount=3".
 
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  • #8
DaleSpam said:
If one group of people are going to be stripped of their earnings and another group of people given unearned money under the banner of "fairness and justice" then this is a question which must be answered. How is this just and fair?

Btw, this is not a Morton's Fork, I am not presenting any false dilemma. I am merely asking for an explanation of the morality of something that claims to be moral.

It is a Morton's fork since you present the wealthy as hard working, and the poor as lazy.

Where is Paris Hilton, or a financial investor, hard-working, and what about your local teacher?

Of course you're not going to kill-off all entrepreneurs to give their money to white trash. But that is never the question. You take some of the wealth to educate the poor, so your whole society is lifted.
 
  • #9
turbo said:
How about a minimum outcome in the case of access to quality healthcare, college education, etc?
I am not particularly concerned about the level of benefit to the recipients, whether it is a "minimum outcome" or an "equal outcome". What I am concerned about is the moral reasoning behind claiming the "justice and fairness" of coercively taking something earned by one person and giving it to someone who did not earn it.

Not all good ideas are just or fair, but if you claim that your idea is just and fair then you should be prepared to explain why.
 
  • #10
MarcoD said:
You take some of the wealth to educate the poor, so your whole society is lifted.

Already being done. Now what?
 
  • #11
MarcoD said:
It is a Morton's fork since you present the wealthy as hard working, and the poor as lazy.
I explicitly allowed for other possibilities:
DaleSpam said:
Or, in what way is it just or fair to take money from someone who is hard working in a economically valuable role (like Steve Jobs) and give it to someone who is hard working in a less economically valuable role (like a mediocre poet)?

Again, my question is about the claimed justice and fairness. In what way are such actions just or fair? Not everything needs to be just and fair, but if you espouse unjust and unfair policies as a means of achieving some greater good, then you need to at least be honest with yourself that neither justice nor fairness supports your policy.
 
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  • #12
An early day motion has been tabled in the UK Parliament on the issue of income inequality there.

That this House notes the findings of the Equality Trust that societies with smaller income differences between rich and poor have fewer health and social problems, such as teenage births, violence, mental illness and drug abuse; further notes that such societies have higher levels of trust between citizens and more social mobility; and therefore encourages the Government to promote policies that reduce income inequality.
http://www.parliament.uk/edm/2010-12/1775

The EDM refers to the research of Richard Wilkinson and Kate Pickett. Their papers are linked to here...

http://www.equalitytrust.org.uk/why/evidence
 
  • #13
Ivan Seeking said:
What is a reasonable distribution of wealth? From my point of view, if what we see today is what our system is intended to produce, or if this is the best we can do under our system, then I reject our system. I expect more. I expect a system that leans towards justice and fairness. But I don't think the results are the ideal that we strive to achieve. I think most Americans want a system that is fundamentally fair - one that doesn't give an unreasonable advantage to the uber rich.
1. I reject the idea that there is a "reasonable" wealth distribution. It is common for prosperity to involve a stretching of the distribution, as if wealth distribution were like a rubber-band. We can see this with China's wealth distribution over the past few decades.
2. I reject the idea that there is an inherrent "fairness" in a more even weath distribution. This is an assertion based on an assumption. It may sound good, but there is no logical reason to conclude that even = fair.
3. I reject the idea that the American system favors the rich. Tax rates are progressive and handouts predominantly go to the poor. What separates the American system from other western systems is that it doesn't favor the poor over the rich as much as in other systems. But that just means that you (and others) are confusing a less positive with a negative.
 
  • #14
DaleSpam said:
I am not particularly concerned about the level of benefit to the recipients, whether it is a "minimum outcome" or an "equal outcome". What I am concerned about is the moral reasoning behind claiming the "justice and fairness" of coercively taking something earned by one person and giving it to someone who did not earn it.

Not all good ideas are just or fair, but if you claim that your idea is just and fair then you should be prepared to explain why.

I agree. What about: All people are born equal? (Under God, if you want to add that.)
 
  • #15
turbo said:
How about a minimum outcome in the case of access to quality healthcare, college education, etc?
It is fine to believe in that, but don't confuse that idea with fairness. You and Ivan (and it appears to me, most with that view) make the same mistake.
 
  • #16
TheStatutoryApe said:
Already being done. Now what?

Yeah, well. You take some of the wealth, and fix all problems not fixable by capitalism alone. Better health care, tax deductions for durable energy-neutral housing, money for child-care support, good infrastructure, public educational mass media. Stuff like that.
 
  • #17
OmCheeto said:
Is the following propaganda?

My question is not rhetorical. Is the quote true?
There is a true fact contained in the quote, but the purpose of the quote is not the true fact, it is the opinion that that fact represents a failure. That's what propaganda typically is made-of: state a fact, then make a false or unconnected assertion about the implications of that fact. If people miss the connection, they may wrongly assume the opinion to be a Truth.
 
  • #18
russ_watters said:
It is fine to believe in that, but don't confuse that idea with fairness. You and Ivan (and it appears to me, most with that view) make the same mistake.
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.
 
  • #19
MarcoD said:
I agree. What about: All people are born equal? (Under God, if you want to add that.)
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.
MarcoD said:
Yeah, well. You take some of the wealth, and fix all problems not fixable by capitalism alone. Better health care, tax deductions for durable energy-neutral housing, money for child-care support, good infrastructure, public educational mass media. Stuff like that.
But is that fair?
 
  • #20
turbo said:
I didn't say anything about fairness, so don't put words in my mouth, please.
If you weren't saying anything about fairness, then you need to reread the question you were answering and try again.
 
  • #21
russ_watters said:
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?

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.)
 
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  • #22
MarcoD said:
Yeah, it is fair, and we were discussing wealth distribution, not legalese.
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.
 
  • #23
Vanadium 50 said:
Propaganda, not science.

He asserts that class is the major factor here. It's not - you can see from census and BLS reports that what matters most is age. The wealthiest people are those who have either just retired or are just about to retire. Ignoring that is just bad science.

Perhaps his conclusion is right, but his argument is lousy.

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:[URL]http://upload.wikimedia.org/wikipedia/commons/2/20/Uspop.svg[/URL]
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:

[PLAIN]http://upload.wikimedia.org/wikipedia/en/a/a3/Graphic.png [Broken]
http://en.wikipedia.org/wiki/File:Graphic.png

the population of the United States is 312,340,000.

So let's 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.
 
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  • #24
DaleSpam said:
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.

Because Paris Hilton and some poor bugger in a suburb were born equally?
 
  • #25
MarcoD said:
Yeah, well. You take some of the wealth, and fix all problems not fixable by capitalism alone. Better health care, tax deductions for durable energy-neutral housing, money for child-care support, good infrastructure, public educational mass media. Stuff like that.

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.
 
  • #26
John Creighto said:
The total wealth in the United States is 55 billion.

Trillion dude. Not billion. Now try again.
 
  • #27
TheStatutoryApe said:
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?

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. ]
 
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  • #28
russ_watters said:
There is a true fact contained in the quote, but the purpose of the quote is not the true fact, it is the opinion that that fact represents a failure. That's what propaganda typically is made-of: state a fact, then make a false or unconnected assertion about the implications of that fact. If people miss the connection, they may wrongly assume the opinion to be a Truth.
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:

Who-Increased-The-Debt-Revised-Front.jpg


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.
 
  • #29
MarcoD said:
Because Paris Hilton and some poor bugger in a suburb were born equally?
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.
 
  • #30
DaleSpam said:
I think this is an interesting question, and I have a follow-up question of my own: What are the rules of justice and fairness by which it becomes morally necessary to forcibly take money earned by one man and give it to another man who has not earned it?
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.
 
  • #31
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 going to do is stimulate the beer industry.
 
  • #32
D H said:
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).

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.
 
  • #33
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
 
  • #34
D H said:
"Fairness" in taxation is IMHO a silly concept unless we work very hard to define what "fairness" means.
I agree. That is why I dislike the claim and want the supporters to either justify or retract them.
 
  • #35
MarcoD said:
To be honest. I don't think it really matters. If you're redistributing wealth, any tax regime will just stabilize around some equilibrium.
It matters immensely. The equilibrium point for a true flat tax would be that everyone would be poor, as would be the equilibrium point for a tax system that squelches all desire to improve oneself. Somewhere in between these extremes is a system that raises almost everyone to well above pauper level but that does have some people becoming much more wealthy than others.

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.
You have a very skewed view of the rich. Instead of focusing on the Paris Hiltons, I suggest you look to the Steve Jobs of the world.

We would not have a modern society with a true flat tax. The roads that people drive on to get to work, the schools that people attend to make themselves fruitful employers and employees, the police and military who maintain order in society, the very long-term investments in science and technology that are pretty much the purview of governments rather than industry: None of these could exist if taxes were capped at levels that the poorest could pay.

We would not have a modern society if there was no room in it for accruing wealth, if every bit of wealth was taxed out of existence. The Steve Jobs of the world are very few in number. Take away the incentive to accrue fame and fortune and those people will be much, much smaller in number. You will instead have an attitude of "They pretend to pay me. I pretend to work."
 
<h2>1. What is the current state of wealth distribution in the US?</h2><p>The current state of wealth distribution in the US is highly unequal. According to data from the Federal Reserve, the top 1% of households hold about 38.6% of the country's wealth, while the bottom 90% hold only 22.8%.</p><h2>2. How does wealth distribution in the US compare to other countries?</h2><p>The US has one of the highest levels of wealth inequality among developed countries. According to the Organization for Economic Cooperation and Development (OECD), the US has the fourth highest level of income inequality and the second highest level of wealth inequality among its member countries.</p><h2>3. What factors contribute to the unequal distribution of wealth in the US?</h2><p>There are several factors that contribute to the unequal distribution of wealth in the US, including disparities in education, race, and gender. Additionally, policies such as tax cuts for the wealthy and a lack of regulation on financial institutions have also played a role in widening the wealth gap.</p><h2>4. How does wealth distribution impact society and the economy?</h2><p>The unequal distribution of wealth can have negative impacts on both society and the economy. It can lead to social and political unrest, as well as hinder economic growth. Unequal access to resources and opportunities can also perpetuate cycles of poverty and limit social mobility.</p><h2>5. What solutions are being proposed to address wealth inequality in the US?</h2><p>There are a variety of proposed solutions to address wealth inequality in the US, including increasing taxes on the wealthy, implementing policies to promote economic and social equality, and investing in education and job training programs for marginalized communities. Some also advocate for a more progressive tax system and stronger regulations on financial institutions to prevent the concentration of wealth in the hands of a few individuals.</p>

1. What is the current state of wealth distribution in the US?

The current state of wealth distribution in the US is highly unequal. According to data from the Federal Reserve, the top 1% of households hold about 38.6% of the country's wealth, while the bottom 90% hold only 22.8%.

2. How does wealth distribution in the US compare to other countries?

The US has one of the highest levels of wealth inequality among developed countries. According to the Organization for Economic Cooperation and Development (OECD), the US has the fourth highest level of income inequality and the second highest level of wealth inequality among its member countries.

3. What factors contribute to the unequal distribution of wealth in the US?

There are several factors that contribute to the unequal distribution of wealth in the US, including disparities in education, race, and gender. Additionally, policies such as tax cuts for the wealthy and a lack of regulation on financial institutions have also played a role in widening the wealth gap.

4. How does wealth distribution impact society and the economy?

The unequal distribution of wealth can have negative impacts on both society and the economy. It can lead to social and political unrest, as well as hinder economic growth. Unequal access to resources and opportunities can also perpetuate cycles of poverty and limit social mobility.

5. What solutions are being proposed to address wealth inequality in the US?

There are a variety of proposed solutions to address wealth inequality in the US, including increasing taxes on the wealthy, implementing policies to promote economic and social equality, and investing in education and job training programs for marginalized communities. Some also advocate for a more progressive tax system and stronger regulations on financial institutions to prevent the concentration of wealth in the hands of a few individuals.

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