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>> Literally no one in America, save for a very few on the fringe, is talking about “eliminating income inequality.” I don't know about that; I've heard plenty

>> Literally no one in America, save for a very few on the fringe, is talking about “eliminating income inequality.” I don't know about that; I've heard plenty of people talk about eliminating income inequality as an end goal (but I live in the SF Bay Area, so maybe a reflection of demographics out here?) It's like saying no one but the fringe is going to vote for donald trump, and yet those poll numbers... >> What people are talking about is a progressive income tax to reduce inequality. Well, we have that. Taxes are historically low, so I'd be ok with raising them somewhat, but not too much. >> So by taxing the wealthy and spending it on services, we can better ensure that the level playing field you allude to continues to exist. This is really the crux of my argument: instead of increasing taxes first, we should hold the government more accountable over spending and look at programs and how they help or do not help the poor. Poverty is the metric that should be focused on, not inequality. If inequality is reduced as a side effect, all the better. But poverty is the problem. If government got more money from taxes, what makes you think they would use it to effectively reduce poverty?

cmiles74 11y ago
The 80% sounds over the top to myself as well, but in the article they were using it in reference to someone with an income of 1 billion dollars per year. To my mind, 80% on 1 billion isn't so crazy. It sounds like the far end of the scaled tax curve. As far as I can tell, there are only a handful of people (like maybe five) that make in excess of 1 billion a year. I work with government agencies and I am all for them being more accountable, I have no doubt that they could spend a lot less than they do. On the other hand, I am entirely unwilling to wait for them to become more efficient before deciding to severely tax the five people who make over 1 billion per year.
- joslin01 11y ago
  So if you taxed those 5 people, you would make 4 billion. We spend over 3 trillion a year. Do you really think the punishment fits the crime? Wiser management of federal resources would go a lot further than throwing more money down the hole.
  - cmiles74 11y ago
    If this tax regime was put in place, people would find other ways to shelter their money; I don't think the government would end up with a significant windfall. Maybe they'd invest in their company or start a new company and invest in that. I'm sure that with such a large income, they would have many places to put that money.
    - joslin01 11y ago
      I agree, which is more reason against it.
- askafriend 11y ago
  Come on you two, don't be so thick. He wasn't seriously suggesting we tax at 80%. He was using that as an extreme example to make a point.
- dave_sullivan 11y ago
  I have no doubt that they could spend a lot less than they do. On the other hand, I am entirely unwilling to wait for them to become more efficient before deciding to severely tax That sounds to me like, "We can't get our ship in order, so lets rob someone who can instead of fixing it and we'll fix it later (but we won't because note what we've done in the current example)." The problem for government is less "not enough money" and more "we don't know how to spend it to accomplish specific and measurable goals"
- ryandrake 11y ago
  80% is not over the top. The top marginal tax rate in the USA was over 60% for half of the last century, topping out at 94% in 1944. The tax rates imposed on the top incomes have only recently (Reagan era) come down to such ridiculously low levels as we have today.
mattgibson 11y ago
> Poverty is the metric that should be focused on, not inequality No. Inequality is the problem. Poverty has nowhere near the same damaging effect. This book is essential reading on the topic: http://www.amazon.com/Spirit-Level-Equality-Societies-Stronger/dp/1608193411/ref=sr_1_1?ie=UTF8&qid=1452269566&sr=8-1&keywords=spirit+level http://www.amazon.com/Spirit-Level-Equality-Societies-Strong... The authors use two test-beds: a comparison of countries around the world and a comparison of states within the US. With these, they show that with overall wealth held constant, it's the larger inequality that causes more social problems. For example, the UK and Japan have roughly equal GDP and similar average incomes, but Japan is less unequal. On almost any measure you might choose of how well a society is doing, Japan is better. Mental health, drug use, teen pregnancy, violence, divorce, abuse, the whole lot. The same goes across all of the states and countries they looked at. The sheer scale of the evidence is overwhelming. It's very rare in the social sciences for literally hundreds of studies to point to the same broad trend across so many different parts of the world. Their work is a revolution as it overturns the common assumption which you expressed that poverty is the problem.
- dave_sullivan 11y ago
  From an amazon review: This book presents the thesis that many ills of today's society (obesity, mental illness, rates of drug abuse, ...) can be attributed to large income inequality. The authors make this point using two-dimensional scatter plots, with income inequality on the x-axis, the prevalence of some form of social ill on the y-axis, and dots in the plot representing individual countries. These plots generally show a positive correlation between income inequality and various social ills. As a statistician, I would like to comment on the soundness such argumentation: unfortunately virtually all graphs are plagued be a confusion of correlation with causation. Reviewer then explains correlation and causation. I could claim "inequality is good" using the same methods. I'd argue inequality is immaterial but does tend to be correlated with poverty, which is what we should focus on. Not to be outright dismissive (I should read the book), but this is a problem in social sciences in general. I think software simulations would be a lot more useful at this point than scatterplots comparing two variables used by so many economists today. I think I've read about people starting to do that in various areas, not sure about how prevalent it is in economic modelling. AFAIK not very.
giaour 11y ago
80% did not appear to be a legitimate policy proposal but just a way to say that even if taxes were insanely high, billionaires would still be unfathomably rich.
- dave_sullivan 11y ago
  Sure, I got that. I edited my comment to not mention it so as to avoid distraction from my main argument.

cmiles74 11y ago

The 80% sounds over the top to myself as well, but in the article they were using it in reference to someone with an income of 1 billion dollars per year. To my mind, 80% on 1 billion isn't so crazy. It sounds like the far end of the scaled tax curve. As far as I can tell, there are only a handful of people (like maybe five) that make in excess of 1 billion a year. I work with government agencies and I am all for them being more accountable, I have no doubt that they could spend a lot less than they do. On the other hand, I am entirely unwilling to wait for them to become more efficient before deciding to severely tax the five people who make over 1 billion per year.

joslin01 11y ago
So if you taxed those 5 people, you would make 4 billion. We spend over 3 trillion a year. Do you really think the punishment fits the crime? Wiser management of federal resources would go a lot further than throwing more money down the hole.
- cmiles74 11y ago
  If this tax regime was put in place, people would find other ways to shelter their money; I don't think the government would end up with a significant windfall. Maybe they'd invest in their company or start a new company and invest in that. I'm sure that with such a large income, they would have many places to put that money.
  - joslin01 11y ago
    I agree, which is more reason against it.
askafriend 11y ago
Come on you two, don't be so thick. He wasn't seriously suggesting we tax at 80%. He was using that as an extreme example to make a point.
dave_sullivan 11y ago
I have no doubt that they could spend a lot less than they do. On the other hand, I am entirely unwilling to wait for them to become more efficient before deciding to severely tax That sounds to me like, "We can't get our ship in order, so lets rob someone who can instead of fixing it and we'll fix it later (but we won't because note what we've done in the current example)." The problem for government is less "not enough money" and more "we don't know how to spend it to accomplish specific and measurable goals"
ryandrake 11y ago
80% is not over the top. The top marginal tax rate in the USA was over 60% for half of the last century, topping out at 94% in 1944. The tax rates imposed on the top incomes have only recently (Reagan era) come down to such ridiculously low levels as we have today.

mattgibson 11y ago

> Poverty is the metric that should be focused on, not inequality No. Inequality is the problem. Poverty has nowhere near the same damaging effect. This book is essential reading on the topic: http://www.amazon.com/Spirit-Level-Equality-Societies-Stronger/dp/1608193411/ref=sr_1_1?ie=UTF8&qid=1452269566&sr=8-1&keywords=spirit+level http://www.amazon.com/Spirit-Level-Equality-Societies-Strong... The authors use two test-beds: a comparison of countries around the world and a comparison of states within the US. With these, they show that with overall wealth held constant, it's the larger inequality that causes more social problems. For example, the UK and Japan have roughly equal GDP and similar average incomes, but Japan is less unequal. On almost any measure you might choose of how well a society is doing, Japan is better. Mental health, drug use, teen pregnancy, violence, divorce, abuse, the whole lot. The same goes across all of the states and countries they looked at. The sheer scale of the evidence is overwhelming. It's very rare in the social sciences for literally hundreds of studies to point to the same broad trend across so many different parts of the world. Their work is a revolution as it overturns the common assumption which you expressed that poverty is the problem.

dave_sullivan 11y ago
From an amazon review: This book presents the thesis that many ills of today's society (obesity, mental illness, rates of drug abuse, ...) can be attributed to large income inequality. The authors make this point using two-dimensional scatter plots, with income inequality on the x-axis, the prevalence of some form of social ill on the y-axis, and dots in the plot representing individual countries. These plots generally show a positive correlation between income inequality and various social ills. As a statistician, I would like to comment on the soundness such argumentation: unfortunately virtually all graphs are plagued be a confusion of correlation with causation. Reviewer then explains correlation and causation. I could claim "inequality is good" using the same methods. I'd argue inequality is immaterial but does tend to be correlated with poverty, which is what we should focus on. Not to be outright dismissive (I should read the book), but this is a problem in social sciences in general. I think software simulations would be a lot more useful at this point than scatterplots comparing two variables used by so many economists today. I think I've read about people starting to do that in various areas, not sure about how prevalent it is in economic modelling. AFAIK not very.

giaour 11y ago

80% did not appear to be a legitimate policy proposal but just a way to say that even if taxes were insanely high, billionaires would still be unfathomably rich.

dave_sullivan 11y ago
Sure, I got that. I edited my comment to not mention it so as to avoid distraction from my main argument.