Disparities in income distribution

Discussion in 'Economics' started by Rona1d, Dec 4, 2010.

  1. Rona1d


    With mid-term elections coming to an end, and the change from a democratic majority leader in the House to a Republican, there has been recent commotion about the huge disparity in income inequality between the US, and say Germany. The "Gini Inex" in the US has been steadily increasing since 1960, and is now substantially higher than Germany's.
    The most obvious cause of this increase is taxation. The United States is currently taxing the top 10% at a rate nowhere near what they're taxing the other 90%. However, how signifcant is poor education, and the increased demand for labor in new, more lucrative industries, on this income distribution disparity?

    I'd like to hear ET's thoughts on the matter, thanks
  2. vk60546


    Well I'm fairy new here but in my opinion, the only equality the government can provide is in making everyone poor. The government can't make a law and make everyone rich. And if it keeps robbing Paul to pay Peter, Paul will have little incentive to produce.
  3. Would people mind not robbing me anymore just to fucking pay this Paul guy.


  4. People...where's my check? It's my money and I want it now!


  5. gucci


    And this is actually a good thing. Paul will stop producing and Peter will start producing due to the fact that Paul is now out of the market. But what about Peters who want to produce but can not do so because Pauls dominate, saturate and manipulate the markets?
  6. Really good to see how limited your knowledg eof the world is. The most rich societies on this planet are of egaltarian form. Starts with the "nordic" countries (Norway, Sweden, Finnland, Denmark), goes on with countries like germany. For example the discussion about health insurance currently done in the US is sad- go in any of the named countries and try to abandon public health and you will have a initiative to reestablish death penalty JUST FOR YOU. Even countries like the UK and Poland have a global public health system.

    There is a lsight line to walk here- between making all people equal, and being a good society that takes cares of it's members, and interesting enough the people actually have to pay for this.
  7. Rona1d


    The United States taxes its citizens no matter where they live. It proves difficult for a U.S. citizen to escape to tax havens under these conditions, unlike any other country (e.g. Germany, Canada etc.)
  8. gucci


    The interesting thing is those "people" are paying for being part of an advanced society. They do not pay for something they can live without.

    The problem is the human ego will thwart all attempts of the "human?" rationalty to understand this once again. This is like thinking about being able to sell something in the market with no participants. We know how this ends.
  9. -----------------------------------------------------------------------------------

    Very good post!
  10. I would disagree on taxation being the main cause of increasing disparities. It's pretty obvious that the Fed by creating bubbles after bubbles played a huge role in this. That's the reason why as the saying goes, the rich get richer.

    Note that in Germany, and the Nordic countries, bubbles are less frequent and of lesser importance, for example Germany didn't have a real estate bubble.

    That said all tax systems should be revisited, marginal tax rates going up simply on the basis of how much you make are unfair.
    Entrepreneurs for example should pay a lower rate for a number of years, while other professions benefiting from very high income should be taxed at higher marginal top rates. That way you would still maintain an incentive to get ahead while redistributing income which our society should do since wealth is far from being a function of work and merit alone, it's most often acquired thanks to family and educational background, connections, already existing wealth, and plain luck even though most wealthy and succesful people will not recognize that, since it's more gratifying to think that you deserved it all and did it "all by yourself".

    So overhaul the tax system to take more from the monopolists , the banks, those who benefit from annuity-like income (health sector, utilities, etc.) and take less from the risk takers.

    Second end the Fed.
    #10     Dec 5, 2010