patrick.net

The title of the thread is "Income inequality questions"

And here we are confusing/conflating wealth inequality with income inequality. The two are almost completely unrelated.

People that have to work for their incomes, are not wealthy

I'm not even certain that income inequality is a "bad" thing. Different peoples laborings, have different worth's.

I'm not certain that wealth inequality is a "bad" thing either. Depending on how it comes to pass

control point says

$1 million is not wealthy

$1 mil can generate $50,000 in passive income at 5% dividend yield. That will put a family in the ballpark of median american household income. While it may not result in a life of luxury depending on location and if kids are in the household a retirement may be in the works. If I could generate $50,000 passively, I would seriously consider hanging it up and trading in my work for unlimited resource of time.

dublin hillz says

control point says

$1 million is not wealthy

$1 mil can generate $50,000 in passive income at 5% dividend yield. That will put a family in the ballpark of median american household income. While it may not result in a life of luxury depending on location and if kids are in the household a retirement may be in the works. If I could generate $50,000 passively, I would seriously consider hanging it up and trading in my work for unlimited resource of time.

Yeah - It's just that it's pretty hard to get that 5% yield these days unless you buy every fucking dip in the stock market ;) Let's stop the money printing and get reasonable interest rates going again. Also let's not forget that these passive "earners"/investors make room for others looking for a job in their previous field(s).

tatupu70 says

Who cares?? Other than being nostaglic, all that matters is real income and
productivity. Both of which have risen significantly since the 1940s. Fiat money
is a red herring that diverts people from the real issue. It's almost
meaningless in the big picture.

LOL, now you want to pretend distribution is not a problem so long as the whole pie is growing . . . aren't you sounding like what you accuse the trickle-down guys of? Fiat Money is the worst trickle-down scheme: give gobs of money to the banksters on Wall Street, and somehow some of the money would trickle down to the little guys on Main Street. In reality, that doesn't happen in terms of purchasing power. Unlike low taxes that promote higher productivity that grows the pie, whereas given a existing level of production, printing money and giving it to some cronies is a zero-sum / negative-sum game at the expense of the rest of the population.

dublin hillz says

control point says

$1 million is not wealthy

$1 mil can generate $50,000 in passive income at 5% dividend yield. That will put a family in the ballpark of median american household income. While it may not result in a life of luxury depending on location and if kids are in the household a retirement may be in the works. If I could generate $50,000 passively, I would seriously consider hanging it up and trading in my work for unlimited resource of time.

There is no safe and risk-free investment right now that can return 5%. So you'd still have to work on safe-guarding and investing that $1mil wisely. That's still work, probably more strenuous than many government jobs.

errc says

I'm not even certain that income inequality is a "bad" thing. Different
peoples laborings, have different worth's.

Exactly! If outcome is always the same, why would anyone be working at all? Sex and drugs are much more fun life style if there were no bad consequences.

I'm not certain that wealth inequality is a "bad" thing either. Depending on
how it comes to pass

Once again hitting the nail on the head! The lefties are trying to displace free market social mobility lubricated by money with heriditory previleges enforced through politics.

tatupu70 says

I take that back. I may have misunderstood you. Yes, I think there are people
that have wealth that didn't earn it. Not all people with wealth, but there are
certainly folks that didn't earn their fortunes.

No kidding! That's why a free market is necessary for the rest of the society to have a chance to chip away at those already wealthy through market competition.

Dan8267 says

Reality says

There is no such thing as "the current US implementation of capitalism." The government can only implement government control, whatever the name such control is.

U.S. does not equal "U.S. government". There most certainly is such a thing as the current U.S. implementation of capitalism. And that implementation has severe constraints that is hindering progress and real wealth creation.

So what is the "current US implementation of capitalism" if you are not referencing current legal framework? How is it different from that of yesterday and that of tomorrow? What makes you think your vision of "progress" is not "regress" in the eyes of another? and your "real wealth" is atavistic Ludditism in the eyes of another?

Reality says

LOL, now you want to pretend distribution is not a problem so long as the whole pie is growing .

That's not at all what I'm saying. I'm saying I don't care whether inflation is 0% or 100% as long as wages grow faster.

Reality says

Unlike low taxes that promote higher productivity that grows the pie

Bullshit. How do low taxes promote higher productivity?? They discourage investment.

Reality says

printing money and giving it to some cronies is a zero-sum / negative-sum game at the expense of the rest of the population.

And that's a nice strawman--nobody is advocating giving money to cronies.

Reality says

Exactly! If outcome is always the same, why would anyone be working at all? Sex and drugs are much more fun life style if there were no bad consequences.

And surprise, surprise. Another strawman. Nobody is advocating that everyone's salary be equal.

Reality says

No kidding! That's why a free market is necessary for the rest of the society to have a chance to chip away at those already wealthy through market competition.

If I have $100 billion dollars--how is competition going to "chip" away at that? Please share how that works.

tatupu70 says

Reality says

Unlike low taxes that promote higher productivity that grows the pie

Bullshit. How do low taxes promote higher productivity?? They discourage investment.

I call reverse bullshit on this one. Easily disproven mathematically: The number of investments converge to zero if taxes converge towards 100%. Vice versa you don't have that trend. Higher taxes may discourage realizations of gains and therefore lengthen the time of investments, offset by a decline of new investments. But that has nothing to do with "encouraging" investments. The best way to keep investments going while discouraging flipping/speculation is to have a lower tax rate for long-term investments, independent of what the actual numbers for short and long-term investment taxation are.

Dan8267 says

Reality says

Monopoly and Oligopoly are usually the result of government intervention in the market place.

Incorrect. Corporations will inevitably create monopolies and oligopolies through mergers unless prevented by government. Game Theory predicts this and history confirms this fact.

The "Game Theory" that you refer to explicitly postulates repeating game involving the same set of players in a non-changing market. The theory simply wouldn't hold at all if different player keep coming and going and new technology introduces new players while making old players obsolete. The mutal trust necessary to maintain an oligopolistic trust wouldn't be there (without government enforcement through price setting and licensing requirement).

Corporations don't like competition because competition lowers profits. Any system that maximizes profits, by definition, minimizes the efficiency of markets. There are conflicting goals in economics, therefore, no economic philosophy is ideal.

It's not just corporations that want to maximize profits; individuals too! A big part of maximizing profit is reducing expenses, which means reducing someone else' profit. The two-way freedom of choice is what maximizes efficiency.

Whereas in a government controlled economy, the bureaucrats also want to maximize their own personal profits . . . while the average Joe and Jane would have no alternative bureaucrats to shop. Each Bureaucrat is by definition a geographical monopoly.

mell says

I call reverse bullshit on this one.

I called bullshit on the claim that lower taxes promote productivity, but regardless--I will agree that as taxes approach 100%, investment will decline. I, obviously wasn't extending my thought to the extreme.

mell says

Higher taxes may discourage realizations of gains and therefore lengthen the
time of investments, offset by a decline of new investments. But that has
nothing to do with "encouraging" investments

I'd argue that the same logic that causes companies to lengthen the time of investments would also cause them to make new investments.

tatupu70 says

LOL, now you want to pretend distribution is not a problem so long as the
whole pie is growing .

That's not at all what I'm saying. I'm saying I don't care whether inflation
is 0% or 100% as long as wages grow faster

Whose wage? The Wall Street wages have been growing fast in the 4 decades of pure fiat era since 1971. 99% of the rest of the society has been witnessing real wages declining (except for short trend reversals in the mid 80's and late 90's).

tatupu70 says

Bullshit. How do low taxes promote higher productivity?? They discourage
investment.

People are more willing to work when taxes are lower and they get to keep more of the fruits of their labor. . . fairly simple concept outside the socialist mind warp. Why would low taxes discourage investment? On the contrary, high taxes is what makes people stop investing altogether and going John Galt!

tatupu70 says

I'd argue that the same logic that causes companies to lengthen the time of
investments would also cause them to make new investments.

Do you not realize "lengthen the time of invest" by delaying realization of gains is merely an accounting gimick trying to legally avoid tax while tax rate is high in anticipation of lower taxes in the future? Are Keynesians really that short-sighted, that they don't see beyond their own noses? BTW, even in this short term, lower taxes to let corporations and individuals realize gains now instead of making marginal investments is a sensible cure for "overcapcity." The realized gains then would be invested by a different set of businesses with a different approach in new lines of business as result of consumers spending those gains. That's how "overcapacity" in existing industries and high unemployment can get resolved in economic adjustment.

Reality says

People are more willing to work when taxes are lower and they get to keep more
of the fruits of their labor

Nice try. Productivity is output/hours worked. Working more time doesn't increase productivity.

tatupu70 says

printing money and giving it to some cronies is a zero-sum / negative-sum
game at the expense of the rest of the population.

And that's a nice strawman--nobody is advocating giving money to cronies.

Unless you postulate that government officials are all selfless gods that have no need for food, shelter, clothing, sexual desires or families and friends to take care of . . . letting any human being deciding where to forcibly direct someone else' wealth would inevitably lead to giving money to cronies. Power corrupts.

tatupu70 says

Reality says

People are more willing to work when taxes are lower and they get to keep more
of the fruits of their labor

Nice try. Productivity is output/hours worked. Working more time doesn't increase productivity.

Nice try at switching topic. I was talking about Economic productivity and societal productivity, not hourly worker productivity. Hourly worker productivity is not a meaningful statistic by itself when a $100/hr minimum wage law would instantly raise hourly worker productivity to above $100/hr on paper by not counting all those losing jobs paying less and having to turn to drug dealing, theft and prostitution that make far less. Hourly worker productivity is not a meaningful number when a significant chunk of the working age population is unemployed or paid under the table one way or another.

Reality says

letting any human being deciding where to forcibly direct someone else' wealth
would inevitably lead to giving money to cronies. Power corrupts

Luckily that's not what anyone is advocating either. The government obtains revenue through taxation which is spent according to the budget set forth by Congress and the President. Nobody is forcibly directing anyone's wealth.

tatupu70 says

Reality says

letting any human being deciding where to forcibly direct someone else' wealth
would inevitably lead to giving money to cronies. Power corrupts

Luckily that's not what anyone is advocating either. The government obtains revenue through taxation which is spent according to the budget set forth by Congress and the President. Nobody is forcibly directing anyone's wealth.

What do you think the Congress and the president do? They forcibly direct taxpayer's wealth. Do you pay taxes because you volunteer or are you forced into paying it due to threat of violence being committed against you?

Reality says

What do you think the Congress and the president do? They forcibly direct
taxpayer's wealth. Do you pay taxes because you volunteer or are you forced into
paying it due to threat of violence being committed against you?

I pay taxes because it's the law. It's the price of living and doing business in the United States. And enjoying the benefits thereof.

Reality says

What do you think the Congress and the president do?

They do the job that they are entrusted with. US citizens elect them to decide how best to govern the country. Part of which involves taxation and part of which involves spending decisions.

Reality says

Nice try at switching topic. I was talking about Economic productivity and
societal productivity, not hourly worker productivity

Economic productivity and societal productivity are extremely vague. Is your denominator just # of workers then? I suppose you could do it that way, but it's not typical.

Here's what the BLS measures as US productivity:

"Labor productivity, or output per hour, is calculated by dividing an index
of real output by an index of hours worked of all persons, including
employees, proprietors, and unpaid family workers."

Reality says

Hourly worker productivity is not a meaningful statistic by itself when a
$100/hr minimum wage law would instantly raise hourly worker productivity to
above $100/hr on paper by not counting all those losing jobs paying less and
having to turn to drug dealing, theft and prostitution that make far less.
Hourly worker productivity is not a meaningful number when a significant chunk
of the working age population is unemployed or paid under the table one way or
another.

So, if you can create a ridiculous hypothetical then it means a very widely reported and watched measure is meaningless? OK, got it..

tatupu70 says

I pay taxes because it's the law. It's the price of living and doing business
in the United States. And enjoying the benefits thereof.

"The price of living"? Do you work for some kind of slave indoctrination corp? Where in the "Right to Life, Liberty and Pursuit of Happiness" is a "Price of Living" written? Which feudal lord should have the right to collect it?

tatupu70 says

They do the job that they are entrusted with. US citizens elect them to
decide how best to govern the country. Part of which involves taxation and part
of which involves spending decisions.

They are distrusted by the overwhelming majority of the population in every single election! Merely half of the eligible voters vote, and few office holders get much more than half the votes. That's like, 70-80% of the population did not vote for them! every single one of them!

Reality says

"The price of living"?

Yep. The US provides many services to all of its citizens. I know you would like it if you could enjoy them for free, but, unfortunately that's not how it works.

Reality says

They are distrusted by the overwhelming majority of the population in every
single election! Merely half of the eligible voters vote, and few office holders
get much more than half the votes. That's like, 70-80% of the population did not
vote for them! every single one of them!

And your point being?

tatupu70 says

Economic productivity and societal productivity are extremely vague. Is your
denominator just # of workers then? I suppose you could do it that way, but it's
not typical.

No. Productivity in its most basic semantic meaning: output. No denominator necessary. All denominators implicitly discount population that is too discouraged to work or have to get paid under the table.

Here's what the BLS measures as US productivity:

"Labor productivity, or output per hour, is calculated by dividing an
index
of real output by an index of hours worked of all persons,
including
employees, proprietors, and unpaid family workers."

Bureau of Lies and Statistics is talking about "Labor Productivity" as a specific term defined by themselves, not simple productivity.

tatupu70 says

So, if you can create a ridiculous hypothetical then it means a very widely
reported and watched measure is meaningless? OK, got it..

I did not create any hypothetical. You cited a technical term "Labor Productivity" that has nothing to do with the societal productivity (i.e. output) that I was talking about. That makes your citation irrelevent and meaningless in this discussion. Thanks for trying to sidetrack the discussion

tatupu70 says

Reality says

They are distrusted by the overwhelming majority of the population in every
single election! Merely half of the eligible voters vote, and few office holders
get much more than half the votes. That's like, 70-80% of the population did not
vote for them! every single one of them!

And your point being?

The point is simply to refute your pretense that they are entrusted by the majority Americans to do anything. 70-80% do not trust them in every single election. The approval rating is in the 20-30% range.

tatupu70 says

Reality says

"The price of living"?

Yep. The US provides many services to all of its citizens. I know you would like it if you could enjoy them for free, but, unfortunately that's not how it works.

Spoken like a defender of feudal privileges. So how much do you enjoy the "service" of blowing up other countries and rebuilding them, while letting our own country rot?

For what it's worth, your "price of living" argument is 200+ years out of date. Ever heard of the Declaration of Independence? "Life, Liberty and Pursuit of Happiness" are individual human rights endowed by his/her Creator. Only those born into slavery are indoctrinated to believe the original sin theory of owing someone else "a price of living."

debyne says

For purposes of how taxes, laws and rights apply to them, is there any other way to think about it? Oh wait, let's form a government committee to assess who really earned their wealth and who didn't, and then we can apply different rights and taxes accordingly.

I'd say we already have the levers in place to allow a broad brush attempt at it. Adjust the tax rates for labor, capital gains, inheritance etc...

Reality says

No. Productivity in its most basic semantic meaning: output. No denominator
necessary. All denominators implicitly discount population that is too
discouraged to work or have to get paid under the table.

That is patently false. Productivity is output divided by something. Find me one citation that defines productivity as output.

Reality says

Bureau of Lies and Statistics is talking about "Labor Productivity" as a
specific term defined by themselves, not simple productivity

Well, of course. All measures have definitions. But, never is productivity simply output.

Reality says

tatupu70 says

Reality says

They are distrusted by the overwhelming majority of the population in every
single election! Merely half of the eligible voters vote, and few office holders
get much more than half the votes. That's like, 70-80% of the population did not
vote for them! every single one of them!

And your point being?

The point is simply to refute your pretense that they are entrusted by the majority Americans to do anything. 70-80% do not trust them in every single election. The approval rating is in the 20-30% range.

Some of the people who don't vote are completely politically disconnected. Also, they don't follow current events and are oblivious to various subjects. They may be experts at using yelp but will not be able whatsoever to explain concepts such as quantitative easing, tax policy, ACA, etc. Thus, it is not true to say that they don't vote because they are dissatisfied with politicians, they are just apathetic.

Reality says

Spoken like a defender of feudal privileges. So how much do you enjoy the
"service" of blowing up other countries and rebuilding them, while letting our
own country rot?

I don't. Unfortunately I don't get to make those decisions. The US is a Republic so our representatives make them.

Do you not believe in the Constitution??

tatupu70 says

That is patently false. Productivity is output divided by something. Find me one
citation that defines productivity as output.

Marriem-Webster defines the word as "the quality or state of being productive."

tatupu70 says

Reality
says

Bureau of Lies and Statistics is talking about "Labor Productivity" as
a
specific term defined by themselves, not simple productivity

Well, of course. All measures have definitions. But, never is productivity
simply output.

But you are dragging in a completely different term from what I was talking about. BLS "Labor Productivity" is utterly different from what I was talking about in "productivity." If you look at BLS "Labor Productivity" alone, there is no recession: Labor Productivity has been rising as more and more people get laid off! What does that say about the usefulness of that particular artfully coined metric?

I already told you why the BLS "Labor Productivity" metric is disconnected from how the real economy is doing.

Reality says

Marriem-Webster defines the word as "the quality or state of being
productive."

That you for proving my point.

Reality says

But you are dragging in a completely different term from what I was talking
about.

That's because you don't know what productivity is. You said low taxes increase productivity. Which is wrong.

dublin hillz says

Some of the people who don't vote are completely politically disconnected.
Also, they don't follow current events and are oblivious to various subjects.
They may be experts at using yelp but will not be able whatsoever to explain
concepts such as quantitative easing, tax policy, ACA, etc. Thus, it is not true
to say that they don't vote because they are dissatisfied with politicians, they
are just apathetic.

Did you not read the approval/disapproval ratings for the Congress and the President? and politicians in general? "Dissatisified" is under-statement.

Reality says

If you look at BLS "Labor Productivity" alone, there is no recession: Labor
Productivity has been rising as more and more people get laid off! What does
that say about the usefulness of that particular artfully coined metric?

It shows what really happens in the real world. Businesses employ only the least number of people that they need to in order to meet demand. They don't hire when taxes are decreased or when profits rise. They hire when they are forced because they can't meet demand.