News What is the Impact of Income Inequality on Social Problems?

[rewebster]

There was a thread a while back where I claimed that inequality is more important than poverty when it comes to crime and other social problems. I don't think anybody agreed with me. Anyway, I found an interesting link with information about it:
http://image.guardian.co.uk/sys-files/Guardian/documents/2009/03/13/inequality.pdf

It shows that the US has the highest income inequality in the free world and has the most prisoners, obese people, depressed people and teen pregnancies per population. There is a strong correlation shown across all countries included between income inequality and the above quantities. The study also claims that the wealth of the country has little bearing on these.

my, my, my...

what a long way this thread has come and all of the diverting sub-areas discussed from this first post (like the 'poor are getting poorer')...

I think its amazing the way that statistics can be used and interpreted (which is often done by politicians to muster their own agendas).

Income inequality from one of our favorite sources:

"While there seems to be consensus among social scientists that some degree of income inequality is needed, the extent of income inequality and its implications on society continue to be a subject of great debate, as they have been for over a century.[3] The majority of social scientists believe that income inequality currently poses a problem for American society with Alan Greenspan stating it to be a "very disturbing trend."[4][5]

Meanwhile, other, mostly conservative social scientists argue that income inequality is mainly the result of more workers in the average household and their age and education, and that the disappearance of the middle class is more statistical than real[6]"

"Gross annual household income does not, however, always accurately reflect standard of living or socio-economic status, as it does not consider household size.[33] Therefore, a large household in the upper quintile may have a lower standard of living than a small household in the fourth quintile. Similarly an upper middle class household with one income earners may have a lower gross annual household income than a lower middle class household with two income earners.[14]"

"On average, women are less willing to travel or relocate, take more hours off and work fewer hours, and choose college majors that lead to lower paying jobs. Women are also more likely to work for governments or non-profits, that pay less than the private sector.[54][55]"


http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

a very interesting article...

One thing (of the many) I got out of it is :

"Income inequality has many causes, some of which are relatively clear, others which remain unknown and yet others which remain disputed. All societies feature some income inequality as the positions people hold in these societies vary in responsibility, importance and complexity. In order to provide sufficient incentive for a wide variety of occupations to be filled with motivated incumbents societies need to provide a variety of rewards.[46]"
=======================================
I just noticed I got an "infraction" for trolling--hmmm...

 

[russ_watters]

But their chances of staying in poverty (whether they will "take advantage of what is given to them") are determined statistically before they are born. Unless you think that poor people are innately different from rich people (ie are born different), then it is not their fault that they stay in poverty.

No I don't think poor people are innately different - I explained the problem: Culture/upbringing. What logical reason can you provide to connect the statistical likelihood with the lack of choice? Its like saying that since 9 of 10 people enjoyed a movie, you have no choice but to enjoy it to.

 

[madness]

No I don't think poor people are innately different - I explained the problem: Culture/upbringing. What logical reason can you provide to connect the statistical likelihood with the lack of choice? Its like saying that since 9 of 10 people enjoyed a movie, you have no choice but to enjoy it to.

Yes, it's mostly to do with culture and upbringing - in more extreme cases, people may have drug addicts as parents etc. My point was that the choices you are likely to make is determined by your upbringing. We can still attempt to improve the social and economic standards these people are born into to make society more equal.

 

[Evo]

For discussion of inflation calculations see Edit: removed unacceptable source

Also see inflation numbers published by the World Bank versus the numbers published by the U.S. Federal Government. Also see the inflation numbers published by the Columbia University School of Business versus the other two sets of numbers.

That source is not acceptable. Sources need to be well known and mainstream.

 

[rewebster]

That source is not acceptable. Sources need to be well known and mainstream.

Is the source/link in post #1 also 'not acceptable'? if it is, then isn't this whole thread?

The thread seemed like a discussion rather than trying to be a 'scientifically correct in every aspect' paper.

Russ,

I don't quite understand still why you gave me a 3 point infraction--

--is it for making a personal comment (as it seemed almost everyone made some kind of a personal comment), or do links now have to be pre-approved in some way?



edit: The reason I bring these things up is that more than a few percentage of threads that are similar, and contain similar posts.

 

[mheslep]

second source for pre-Clinton CPI

http://www.gold-eagle.com/gold_digest_08/taylor061208.html

"The chart on your left shows the Official CPI in red. The blue “Alternate CPI” was calculated by economist Walter Williams, who simply applied the same methods of CPI calculation as was used pre-Clinton. Note that the existing CPI using pre-Clinton methodology is already close to 12%. By contrast, the “official” government number is only 4%."

if you do not like these sources can you post a source?

That site is authored by a guy hawking gold. That doesn't mean the sources the gold-guy references are bogus, but if you really want to know what is behind the alternate CPI story, why not follow up by searching for the actual data and basis for the calculations by W. Williams the economist.

 

[CRGreathouse]

Let's discuss CPI on the CPI thread, and income inequality here.

 

[WhoWee]

Please post the sources for your post so everyone can be on the same page.

Sorry for the delay in responding.

The Earned Income Credit is described on the IRS website.
http://www.irs.gov/individuals/article/0,,id=96406,00.html
http://www.irs.gov/individuals/article/0,,id=96466,00.html

"The Earned Income Tax Credit or the EITC is a refundable federal income tax credit for low to moderate income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to have a filing requirement.

The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments."

...and in this PDF
http://www.irs.gov/pub/irs-pdf/p596.pdf

Some rules
"2009 Tax Year

New for tax year 2009: The amount of EITC increased for workers with a third qualifying child* and the rules changed for determining who is a qualifying child.

Earned Income and adjusted gross income (AGI) must each be less than:

*
$43,279 ($48,279 married filing jointly) with three or more qualifying children
*
$40,295 ($45,295 married filing jointly) with two qualifying children
*
$35,463 ($40,463 married filing jointly) with one qualifying child
*
$13,440 ($18,440 married filing jointly) with no qualifying children

Tax Year 2009 maximum credit:

*
$5,657 with three or more qualifying children
*
$5,028 with two qualifying children
*
$3,043 with one qualifying child
*
$457 with no qualifying children

The Fostering Connections to Success and Increasing Adoptions Act of 2008 changed the uniform definition of a child. Now, a "qualifying child" must:

* Be younger than the taxpayer claiming that child unless the child is disabled and
* Not have filed a joint return except to claim a refund

It also added a new Parent AGI rule. If the same child is a qualifying child of a parent and another relative, the person who is not the parent can claim the child only if their AGI is higher than the AGI of any parent of the child.

*The American Recovery and Reinvestment Act (ARRA) provides a temporary increase in EITC and expands the credit for workers with three or more qualifying children. These changes are temporary and apply to 2009 and 2010 tax years.

For more information on whether a child qualifies you for the EITC, see Publication 596, Chapter 2, Rules If You Have a Qualifying Child.

Investment income must be $3,100 or less for the year.

The maximum Advance EITC workers can receive from their employers is $1,826."

"Childless Workers
EITC - it's not just for families with children. You do not have to have a child to qualify for EITC, however, you must meet certain rules. Find out more about claiming EITC if you do not have a qualifying child..

Don’t overlook the state credit

If you qualify to claim EITC on your federal income tax return, you also may be eligible for a similar credit on your state or local income tax return. Twenty-two states, the District of Columbia, New York City, and Montgomery County, Maryland, offer their residents an earned income tax credit.Find more information on states with EITC."

I selected this tax program because it's an income redistribution program.

There are rate schedules in your 1040 publication and several calculators available on line.

 

[WhoWee]

Could you explain why you think that is a relevant statistic?

The Earned Income Credit focuses on incomes of people who either work or file taxes up to nearly the median income levels. The program was intended to provide equality.

 

[Evo]

Sorry for the delay in responding.

The Earned Income Credit is described on the IRS website.
http://www.irs.gov/individuals/article/0,,id=96406,00.html
http://www.irs.gov/individuals/article/0,,id=96466,00.html

"The Earned Income Tax Credit or the EITC is a refundable federal income tax credit for low to moderate income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to have a filing requirement.

The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments."

...and in this PDF
http://www.irs.gov/pub/irs-pdf/p596.pdf

Some rules
"2009 Tax Year

New for tax year 2009: The amount of EITC increased for workers with a third qualifying child* and the rules changed for determining who is a qualifying child.

Earned Income and adjusted gross income (AGI) must each be less than:

*
$43,279 ($48,279 married filing jointly) with three or more qualifying children
*
$40,295 ($45,295 married filing jointly) with two qualifying children
*
$35,463 ($40,463 married filing jointly) with one qualifying child
*
$13,440 ($18,440 married filing jointly) with no qualifying children.

Wow, they can make $48,279 annually? That's not poor.

 

[WhoWee]

Wow, they can make $48,279 annually? That's not poor.

To keep it in context - the concept is "working poor", adjusts for number of children, and requires that persons not file as married filing separately.

 

[Evo]

To keep it in context - the concept is "working poor", adjusts for number of children, and requires that persons not file as married filing separately.

That's not poor, but it really discriminates against childless couples. Which brings me to my gripe that people with children get huge benfits compared to those without children. We need to stop rewarding and encouraging people to havve kids.

Also, I posted the US Census show people below the poverty level, that is what we should be using.

 

[WhoWee]

That's not poor, but it really discriminates against childless couples. Which brings me to my gripe that people with children get huge benfits compared to those without children. We need to stop rewarding and encouraging people to havve kids.

Also, I posted the US Census show people below the poverty level, that is what we should be using.

I have the same gripe, then I see the stat on families with 1 parent in your post - a poverty rate approaching 40% in some groups is very disturbing.

 

[Evo]

I have the same gripe, then I see the stat on families with 1 parent in your post - a poverty rate approaching 40% in some groups is very disturbing.

That's poverty, but in most demographics it's improving. Unfortunatly for blacks, it's getting worse.

 

[rewebster]

It will be interesting to see the results of the 2010 census, and I bet the income inequalities will be even more dramatic, right after this recession...

 

[Evo]

It will be interesting to see the results of the 2010 census, and I bet the income inequalities will be even more dramatic, right after this recession...

Yep, I think we will see huge falls from middle and upper middle class as those are the ones hit the hardest. People on welfare and disability will be getting the same incomes, IMO. Also, low income workers are still needed, it's the people in higher incomes that are suffering, IMO.

 

[WhoWee]

That's poverty, but in most demographics it's improving. Unfortunatly for blacks, it's getting worse.

This may be worth noting...
"U.S. Census Bureau
Current Population Survey (CPS)
A joint effort between the Bureau of Labor Statistics and the Census Bureau

Footnotes:

(1) The 2003 CPS asked respondents to choose one or more races. White Alone refers to people
who reported White and did not report any other race category. The use of this single-race
population does not imply that it is the preferred method of presenting or analyzing data.
The Census Bureau uses a variety of approaches. Information on people who reported more
than one race, such as "White and American Indian and Alaska Native" or "Asian and Black
or African American," is available from Census 2000 through American Factfinder. About
2.6 percent of people reported more than one race in 2000.

(2) Black alone refers to people who reported Black and did not report any other race category.

(3) Asian alone refers to people who reported Asian and did not report any other race category.



Source: U.S. Census Bureau
Contact: Demographic Call Center Staff at 301-763-2422 or 1-866-758-1060 (toll free)
Last revised: September 10, 2009
URL: http://www.census.gov/hhes/www/cpstables/032009/racenotes.htm"

...the stats do not account for mixed races.

 

[Evo]

...the stats do not account for mixed races.

There is not a report for reporting more than one race? I'm sure there is. I will look tomorrow.

 

[Al68]

its Reaganomics (the republican plan of the period)

No, it's not. It's what Democrats claimed Reagonomics to be. Big difference.

 

[Al68]

What you say doesn't follow. "Wealth redistribution" may be theft to you, but then property is theft to someone else. You can't assume your own political stance in order to prove it.

It's a matter of semantics, not political stance. But there is no reason to argue about the meaning of the word theft.

Semantics aside, Democrats advocate actions by government that are commonly referred to as theft when the same exact actions are performed by anyone else. It's irrelevant whether or not you choose to use the word theft to describe it. It's the same action being advocated either way.

In the US the richest are paying an effective tax rate of less than 1%, which is wealth redistribution in reverse.

LOL, just plain false. This absurd myth has been debunked many times in this forum. Democrats are very successful in perpetrating this nonsense, but only because many don't bother checking the facts, and the facts say the opposite.

The opposite is true to such a large extent that many would never even believe possible given the lies and propaganda perpetrated by the Democratic Party. Here's a link from CBO: http://www.cbo.gov/ftpdocs/88xx/doc8885/EffectiveTaxRates.shtml

From CBO 2005: Total effective Federal tax rates (including Social Security taxes):

Top 1%: 31.2%
Top 5%: 28.9%
Top 10%: 27.4%
Top 20%: 25.5%
Next 20%: 17.4%
Middle 20%: 14.2%
Lower 20%: 9.9%
Bottom 20%: 4.3%

The numbers are similar for other years, and interestingly, historically more progressive after each so-called "tax cut for the rich". Pretty big difference between Democratic Party lies and reality.

 

[Gokul43201]

No, it's not. It's what Democrats claimed Reagonomics to be. Big difference.

How is it not Reaganomics, when it was supposedly championed by Reagan's budget director, David Stockman (as demonstrated by his own admission)?

From the wiki:

A major feature of these policies was the reduction of tax rates on capital gains, corporate income, and higher individual incomes, along with the reduction or elimination of various excise taxes. David Stockman, who as Reagan's budget director championed these cuts but then became skeptical of them, told journalist William Greider that the term "supply-side economics" was used to promote a trickle-down idea.[7]

It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory. - David Stockman, Ronald Reagan's budget director​

http://en.wikipedia.org/wiki/Trickle-down_economics

 

[Al68]

the govt issues the money initially---they 'make' the money and determine how much they 'make'

LOL, I have to assume this is a joke. Obviously we use government notes as currency, but the act of printing them isn't "making" money in any real sense any more than the act of writing a check is "making money".

 

[Al68]

How is it not Reaganomics, when it was supposedly championed by Reagan's budget director, David Stockman (as demonstrated by his own admission)?

LOL. I'm well aware of the claims of Stockman and others, but you seem to now be using a different definition of "trickle down economics" than Democrats normally do.

I have never heard anyone claim to advocate "giving money to the rich so it will trickle down", which is typically what Democrats claim, as absurd as that is.

Supply side economics has nothing to do with "giving" anything to the rich or anything "trickling" anywhere. It's about reducing tax rates to reduce the negative economic consequences of high tax rates.

 

[Gokul43201]

Semantics aside, Democrats advocate actions by government that are commonly referred to as theft when the same exact actions are performed by anyone else. It's irrelevant whether or not you choose to use the word theft to describe it. It's the same action being advocated either way.

By that argument incarceration is kidnapping, the death penalty is murder, the military is a militia, and providing a taxpayer funded police or fire service is equivalent to running a mob operation or protection racket.

In any modern democracy, the government is given the power by its electorate to perform actions that may not be performed legally by non-state individuals.

 

[Gokul43201]

LOL. I'm well aware of the claims of Stockman and others, but you seem to now be using a different definition of "trickle down economics" than Democrats normally do.

I have never heard anyone claim to advocate "giving money to the rich so it will trickle down", which is typically what Democrats claim, as absurd as that is.

Supply side economics has nothing to do with "giving" anything to the rich or anything "trickling" anywhere. It's about reducing tax rates to reduce the negative economic consequences of high tax rates.

I'm not using any definition other than that provided in the wiki page, and attributed to Stockman. The tax cuts championed by Stockman were targeted at "higher income individuals", according to the link. I'm pretty sure that's a key aspect of what Democrats (or most anyone else) refer to as "trickle-down economics".

 

[rewebster]

LOL. I'm well aware of the claims of Stockman and others, but you seem to now be using a different definition of "trickle down economics" than Democrats normally do.

I have never heard anyone claim to advocate "giving money to the rich so it will trickle down", which is typically what Democrats claim, as absurd as that is.

Supply side economics has nothing to do with "giving" anything to the rich or anything "trickling" anywhere. It's about reducing tax rates to reduce the negative economic consequences of high tax rates.

LOL--it almost sounds like you've never heard of 'trickle-down' economics. Here's a link for you to read about it:

http://en.wikipedia.org/wiki/Trickle-down_economics


"Today "trickle-down economics" is most closely identified with the economic policies known as Reaganomics or supply-side economics. Originally, there was a great deal of support for tax reform; there was a dual problem that loopholes and tax shelters create a bureaucracy (private sector and public sector) and that relevant taxes are thus evaded."

 

[Al68]

By that argument incarceration is kidnapping, the death penalty is murder, the military is a militia, and providing a taxpayer funded police or fire service is equivalent to running a mob operation or protection racket.

In any modern democracy, the government is given the power by its electorate to perform actions that may not be performed legally by non-state individuals.

Yes, including theft. I wasn't using the word theft in the legal sense, only in the moral sense. For your other examples, if you believe imprisoning someone for a crime is inherently wrong, then hiring government to do it would be just as wrong. The justification for it isn't some special right of government, government is just exercising the power delegated to it by people who inherently have the right to convict and imprison criminals to protect themselves. Ditto for the death penalty.

We use government for those things because it's the most practical way to do it, not because government has some kind of special rights above those delegated to it by the people.

I'm not using any definition other than that provided in the wiki page, and attributed to Stockman. The tax cuts championed by Stockman were targeted at "higher income individuals", according to the link. I'm pretty sure that's a key aspect of what Democrats (or most anyone else) refer to as "trickle-down economics".

Yes, but it's how Democrats describe "trickle down economics" that is fraudulent and nothing like Reagonomics. The name "trickle down" itself was coined for the purpose of such fraud.

And yes, I'm sure the wiki page doesn't say that.

 

[Al68]

LOL--it almost sounds like you've never heard of 'trickle-down' economics.

LOL. I've heard about it enough to puke thousands of times every year since Reagan was elected. What I've never heard is any politician ever say: "I believe in 'trickle down economics', we should just give money to rich people so it will trickle down".

But I have repeatedly heard Democrats say: "They believe in 'trickle down economics', they think we should just give money to rich people so it will trickle down".

It's known as a strawman argument. It's easy to argue against something so obviously absurd. And it's just as easy to stir up hatred against those of us opposed to their policies when they claim we believe in such nonsense.

Democrats know they cannot make a reasonable case for their agenda without misrepresenting and stirring up hatred for their opposition.

"Today "trickle-down economics" is most closely identified with the economic policies known as Reaganomics or supply-side economics..."

Yes, it is, as a pejorative for purposes of stirring up hatred and fraud. But I now have no doubt that you knew that already.

 

[Zantra]

Zantra:

1. Education is only a pathway to richness if only a LIMITED number has the same education and expertise as yourself.

If everyone became qualified engineers, engineer salaries would plummet.


2. For those who do not have the ABILITY to become highly proficient in academic lines of work, higher education IS a
waste of time, and their choice of not pursuing such a career is a RATIONAL choice, not a bad one.

3. Nor is it at all unfair that they'll end up earning less, BTW.

4. And many lazy people are perfectly aware of that they are lazy, and do not blame others for their own lack of material resources. Many lazy people simply don't care about acquiring material riches, and find meaning elsewhere. And nobody should denigrate them for making THOSE choices, either.

Middle class is a broad definition, but I think it's generally agreed to approximate $30-100k/yr, YMMV. Now, I agree that not everyone can make $50-$75K/year and be an engineer or have a PhD, BUT I think it's well within reach for most people who fall within the statistical signficant median bell curve of intelligence(100+ IQ?) to finish an associates degree. With that, you can certainly land a job that would bring them out out of poverty. I think we can all agree on that point, right ?

And I think most middle aged adults are capable of completing the degree by the time they're 30, assuming they make the right choices. If more adults made those choices, the jobs will simply go to teenagers, the unemployed, retirees, etc, and young adults, who btw, have a higher unemployment rate than any other group in the US, at the moment.

Again, everyone can't be a chief, but anyone can step up and be a member of the tribe, if they so choose.

My irritation is with those who make these poor decisions then turn around and make excuses, when they've made their own bed. Those who choose that lifestyle and accept it's limitations are no doubt happy. Those who aren't happy are suffering from their own choices, IMHO. And unfortunately welfare isn't structured to motivate people to improve themselves. Hopefully that can change.

And incidentally, Although there's a correlation between EDUCATION and intelligence, Higher intelligence doesn't guarantee success by any stretch. In fact, there are a lot of studies to indicate just the opposite, that gift or highly intelligent folks have a difficult time socially, and can't find a job they keep, because they're bored so easily.There are people out there who are more intelligent than 99 percent of people on this board, and they can't hold down a job. Ther was a friend of my family who had an IQ of 180. He was a very fun guy, but in the 20 years I recall knowing him, he never held a steady job.

 

[TheStatutoryApe]

Middle class is a broad definition, but I think it's generally agreed to approximate $30-100k/yr, YMMV. Now, I agree that not everyone can make $50-$75K/year and be an engineer or have a PhD, BUT I think it's well within reach for most people who fall within the statistical signficant median bell curve of intelligence(100+ IQ?) to finish an associates degree. With that, you can certainly land a job that would bring them out out of poverty. I think we can all agree on that point, right ?

And I think most middle aged adults are capable of completing the degree by the time they're 30, assuming they make the right choices. If more adults made those choices, the jobs will simply go to teenagers, the unemployed, retirees, etc, and young adults, who btw, have a higher unemployment rate than any other group in the US, at the moment.

How many people would you like to see with college degrees working at McDonalds or stocking shelves at a grocery store (for instance)? There is a much higher demand for labour with a minimum of a high school diploma than there is for labour with a college degree. If you make sure that most people have a college degree you will wind up finding that a college degree is no longer worth much and you will have a glut of workers who paid significant sums of their own money, family money, or government aid money to get a degree that is doing nothing for them.

I worked at a private college. There is nothing sadder than seeing someone who spent $40k+ a year showing up day after day for years to use the alumni resource center in hopes of finding a job other than working at a department store. It was a specialized school run by a corporation just trying to make money without much consideration for their students unfortunately. I'd hate to see that be the norm for any college though.