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Income inequality "solutions"

Discussion in 'Off Topic [BG]' started by two fingers, Jan 6, 2014.

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  1. two fingers

    two fingers Opinionated blowhard. But not mad about it. Gold Supporting Member

    Feb 7, 2005
    Eastern NC USA
    OK, maybe we can do this. Maybe not. Hopefully we can keep this civil and away from the lines not to be crossed.

    So here goes......

    No need to argue that income inequality exists. I get it. However, every time the conversation comes up, the "solution" seems to be higher taxes, fees, penalties, etc. for the rich. And those monies go to the government, NOT those at the other end of the income scale. The money is not redistributed. It is simply taken from the top. This taking of more money from the top would not result in more income for those at the other end. It almost seems to be more of a punishment than a solution. It solves no problems for those at the other end, rather it is simply designed to make people "feel" better (and to herd people into voting booths). However, I have never even heard anyone say that the money would go to anyone. So why do it?

    Minimum wage? OK, that's more of a "living wage" conversation. It won't close the gap at all (statistically anyway). So we could go back and forth as to whether or not it is a good idea, but, again, it won't close any income inequality gaps. In my view, the solution would have to be more than an income floor. For any real change in income inequality to come about, the "minimum wage" would have to be set at $50K+ annually, not $15 an hour. And that's not going to happen. I would like to keep this conversation in the realm of the realistic.

    My point? None of the ideas (or serious ideas that actually have a chance of passing here in the states) solve the problem. Simply taking more from the rich won't do it. It won't bring anyone up. Poor people won't have another dime as a result. Even if it does help prop up social programs, their income won't increase and their quality of life won't improve. Income redistribution on a large scale will never happen here. Period. Simply taking 40% of wealthy people's income and handing it to people on the other end will not happen. So please don't waste time with it. Taking a large portion of Ralph Lauren's income and giving it to the guy(s) who works at McDonald's and Wal-Martwill not happen here. It simply won't. (You're going to argue that it could, but it won't.... really..... it is never ever going to happen...... let it go.)

    So what is a solution to the problem? Can government force a solution? Has it ever worked anywhere? Seriously, are there any modern examples of countries that have been able to use regulations, taxes, etc. to force income equality and not crush entrepreneurship? In other words, has it ever been done in a way that lifted the bottom, allowed the economy to thrive, and fostered an environment of entrepreneurship and growth where some people were still able to become wealthy but everyone climbed a few places on the economic ladder? How do you not disincentivize the top?

    Like I said, put down the boxing gloves and take off the warpaint. We have successfully had some touchy subject conversations here in TBOT recently and I hope this one can be as well.

    Here's hoping!

    (Let me kick this off with a smiley doohickey to break the tension right out of the gate. :D)
  2. I could throw thoughts around all over the place, but I don't have a cohesive narrative.

    should someone be penalized because they figured out how to make a million dollars as long as it was done morally?

    who get's to decide what is moral?

    why are farmer's barely scraping by when they provide one of the things most essential to our existence?
  3. two fingers

    two fingers Opinionated blowhard. But not mad about it. Gold Supporting Member

    Feb 7, 2005
    Eastern NC USA
    I'm right there with you DwayneieAD. When I try to wrap my head around what to "do" about it, I come up with as many questions as answers.
  4. UncleFluffy


    Mar 8, 2009
    Head Tinkerer, The Flufflab
    Erm, just off the top of my head:

    Smaller class sizes in K-12, better access to tertiary education for those who can benefit themselves and society thereby.

    A saner (without going down the overly political road of trying to define that term) healthcare system.

    Adjusting the tax system to avoid the welfare trap.
  5. Usually people say that minimum wage should be much higher and we need to tax the living @$^#! out of the rich and eventually the thread gets closed.

    I think it goes deeper than an hourly wage. We all know someone who is broke simply because they make unwise financial decisions. We also may know someone who is well off that's a penny pincher.

    If I had to offer the simplest of solutions, it would be education and problem solving. People suck at these.
  6. TeeWX


    Apr 24, 2013
    I think minimum wage in Iowa is still $7.25, which is hilarious. Some of the people I've seen working don't even deserve that though if you ask me. Most people with an education get by pretty well I think, especially if your spouse has an education too.

    I have no idea on a clear cut solution, but I have my theories. I think part of the problem here is the Wal-Mart type of stores that you mentioned the low income people working at. The enormous big businesses are just bad, especially when they're forcing lower and lower prices. The lower prices aren't hurting them at all as the profit margins are basically the same. It's killing the industries that have little choice but to supply the chain stores. Maybe it's always been this way but every time I go into Wal-Mart or (insert another giant chain store here) all I see is absurdly cheap, absolutely horrible crap on every shelf; yet people but it up like it's candy. I don't think you can simply start paying U.S. workers more or start taxing the rich harder before you fix the source. I think the economy is taking a hit because of the way big businesses operate. Maybe this comparison won't hit home with everyone but I like to think of a Carvin guitar and something like an Epiphone. They're similarly priced, yet one is custom made to your specs in the U.S. and the other is bare bones optioned and made in China. I just don't think a large company can afford to pay it's employees legitimate wages, have competitive prices, and a high quality product all at the same time that'd be comparable to smaller businesses. I know the dream of every business is to have your product in the hands of everyone on the planet, but it's something that I think is really bad for the greater good. I have no clue how you'd go about fixing this, as it's something that starts in the mind, and you can't change the mind with legislation (not yet anyways! :O).
  7. I think an entitlement complex is part of the problem. We're all owed shelter, car, smart phone, 50" TV, cigarettes, etc. It's simply easier to blame McDonald's for exploiting their workers than to admit that someone stuck in min wage for life might lack skills.

    I worked a min wage job bagging groceries in high school and most of the workers were fellow teens. The job took two days to learn. Most of us were able to get promoted to better positions simply by showing up and demonstrating some fairly basic skills. You could basically be making $3-4 more per hour without epic struggles.

    I haven't been to McDonald's in years, but I recall not getting my order right a lot of the time and you might need a manager if you gave the cashier extra change to get a full $1 back.
  8. fisticuffs


    May 3, 2011
    Madison, WI
    Well many years ago the tax rate DID help make the profits trickle down to the employees. The rate was so high that business invested in their business and their employees to avoid it. Not sure how that would work today with so many off-shore tax havens and loopholes. We could tax capital gains the same as labor. I don't understand why that is not already the case. We could as consumers do a better job at this whole capitalism thing. It's difficult to avoid the lure of bargain basement prices but if more people chose quality and companies who did the right thing it would do a lot of the work for us. Instead we shop at Walmart for disposable slave labor plastic. No one is going to win in that situation except for the Waltons. Walmarts profit margins get brought up a lot as an example of how we can't do anything about it. To me Walmarts pathetic margins make me think it's not a very well run company. But undercutting everyone is the business plan so fair wages will never happen there.

    I'm glad someone on the other side actually sees this as a problem for once. Generally that's not the case. Everyone loses in the race to the bottom. Supply Side economics has a 30 year track record of failure. once we understand those things we can figure out how to fix it.
  9. I agree with all of these. I feel K-12 needs an overhaul on what is taught. Life skills should be taught. we should be teaching about mortgages, banking, loans, insurance, and a laundry list of other such things. I graduated from a nationally ranked high school and was taught none of this, others have previously said there schools did teach such things.

    saner healthcare.. nothing more needs said.

    not 100% familiar with what you mean by welfare trap. but I'm assuming you mean that it's hard to get out of welfare once you are on it. Running with that assumption I'll say I agree. I was previously on unemployment and felt reluctant to get a job because I found myself needing to work 50 hours a week to make what I was making sitting at home on my ass. add into that the fact that when I have a job now I need to pay for additional gas in my car, childcare, etc....

    when I lost my job about 5 years ago and first went on unemployment I applied for food stamps. you had to fill out a list of household bills. I filled out water, power, etc... got denied, appealed and they said to me "well why didn't you include cable tv, internet, and cell phone bill on your list of household necessities?" at that point I thought "this isn't for me, i'll figure this out on my own, and I did. it was hard for a while and there were a few nights i didn't eat so that my kids could but I couldn't play into that kind of system

    your last line is so true and it should make people sad. maybe to expand on my thoughts about life skills training above, maybe a push towards training in marketable skills, trade skills, etc is needed?

    should self sufficiency be a 4 year high school program? I think probably yes.
  10. two fingers

    two fingers Opinionated blowhard. But not mad about it. Gold Supporting Member

    Feb 7, 2005
    Eastern NC USA
    I'm not arguing with you. I am genuinely curious as to what you mean by this. To me, this is economics and doesn't have to swerve into politics. Numbers are numbers. And I would be interested in how a tax system (of any kind) could solve income inequality.
  11. I think it's unfortunate that schools need to teach such basic things. My parents taught me those things. Their parents taught them and so on. However, I guess we gotta start somewhere since the system seems to be perpetuating a "little".

    Most people tend to dislike my opinions about healthcare. Wanna know why it's so expensive? It's because people are so unhealthy. Hell, people refuse flu shots due to propaganda. (See article that Jenny McCarthy's son is not autistic.)

    Whilest we blame the rich, cash loan places are really exploiting people. Don't blame them.
  12. TeeWX


    Apr 24, 2013
    I absolutely agree with you. I've seen people who don't make half what I do have nicer electronics in their house than I do; yet they get free groceries with food stamps. People who make less do need to dial it back a notch.

    However I'm not trying to blame Wal-Mart or McDonalds. We both know how worthless a lot of those people are. I think it's the choice that everyone makes to support these places that is the problem. It really isn't hard to shop around just a little bit more and get better quality food and other misc products. We can get by in the music world with everything made in the U.S. Even my picks and strings!
  13. TeeWX


    Apr 24, 2013
    Anyone who's gone to college can second this. You go from sleeping around and never studying and getting all A's and B's to working harder than you've ever done in your life to get similar grades. You actually learn valuable things like critical thinking and problem solving instead of memorizing some facts for a test.
  14. two fingers

    two fingers Opinionated blowhard. But not mad about it. Gold Supporting Member

    Feb 7, 2005
    Eastern NC USA
    Same goes for "saner healthcare". I'm not saying we don't need it. I'm asking how tha solves income inequality for the majority of people. Sure, you can point out examples of people who have gone bankrupt paying medical bills. But for the masses, I think "saner healthcare" would matter more to their health than their income. And it would not close any major gaps in any way that I can think of (again for the masses, not just individual cases).
  15. fisticuffs


    May 3, 2011
    Madison, WI
    See my post.

    I don't think a tax system alone will do it but it could certainly help. There needs to be more incentive to pay people more. In the 50's that incentive was a 90% top tax rate, as well as a strong Union presence in labor. As Unions have declined so have wages. Don't care what you think about Unions but the balance of power between employee and employer has shifted and it has resulted in more equality.

    I think instead of talking minimum wage maybe we need a maximum wage. Make any more than say $5Mil in a year and you'd better find something/someone to spend it on. There's a trillion dollars sitting idol right now not working in our economy for anyone but a handful of people. Maybe something like mandatory profit sharing. A lot of employees have literally no incentive to do more. Give them a financial stake in their job and they will perform better.
  16. I remember being a broke student with a POS car and basic cell phone while "broke" patients were pulling up with the latest and greatest technology (when Blue Tooth was new) and in an Escalade. Meanwhile, I had to get into my car on the passenger side because the lock was broken.

    I may argue that middle management tends to be the most worthless and expensive, but they unfortunatley seem to make all the decisions. :p
  17. fdeck

    fdeck Supporting Member Commercial User

    Mar 20, 2004
    Madison WI
    HPF Technology LLC
    Your post seems so chock full of erroneous or unsupported assumptions that it reads as one great big loaded question, or is possibly more of a political statement than a question.
  18. Why can't be logistics instead of politics?
  19. NWB


    Apr 30, 2008
    Kirkland, WA
    As an observation, many of the European countries such as Germany and Sweden have much better income distribution than the US. They do have higher taxes and stronger social programs, although I think there's more to it than that.

    It might be worthwhile to examine the education systems of these more successful European nations.
  20. Jared Lash

    Jared Lash Born under punches Supporting Member

    Aug 21, 2006
    Northern California
    An interesting visual representation.

    To me arguments over raising or lowering tax rates or the minimum wage are good for political campaigns but are overly simplistic in terms of addressing a much more complexed and nuanced problem.

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