Two questions:
1: What would be the best scenario for wealth distribution in the US?
2: How is wealth actually distributed.

Scenario 1: Equal distribution


Scenario 2: Nobody below poverty line, and working hard can get you rich, large middle class.


Scenario 3: some people below poverty line, about 10-15% will struggle, wealthy and rich make about 100x than poor and 10x that of middle class, middle class is off worse than in scenario 2.


Scenario 4: Middle class barely distinguishable from poor, about 35% is struggling, rich are off worse than in scenario 3, top 1% owns 40% of all wealth, bottom 70% has 7%.

Question:
What would be ideal / What do you think is true?

Choices:
Scenario 2 ideal / Scenario 2 true
Scenario 2 ideal / Scenario 3 true
Scenario 2 ideal / Scenario 4 true
Scenario 3 ideal / Scenario 2 true
Scenario 3 ideal / Scenario 3 true
Scenario 3 ideal / Scenario 4 true
Scenario 4 ideal / Scenario 2 true
Scenario 4 ideal / Scenario 3 true
Scenario 4 ideal / Scenario 4 true
Scenario 1 ideal / Scenario 1 true
Scenario 1 ideal / Scenario 2 true
Scenario 1 ideal / Scenario 3 true
Scenario 1 ideal / Scenario 4 true

 

The video the charts are from is educational.

https://youtu.be/QPKKQnijnsM?si=k5Y6C-w4EczA16oV

As is the fact that the video is 11 years old, and the concentration at the top has increased.

If you redistributed the wealth equally and took all the money from the wealthy and gave it to the poor so that everyone had exactly the same number of poker chips, in 20 years, it would be exactly the same.

quote:

Originally posted by lavaca:
If you redistributed the wealth equally and took all the money from the wealthy and gave it to the poor so that everyone had exactly the same number of poker chips, in 20 years, it would be exactly the same.

Exactly the same as what? As what it's now? It took many decades to get to what it's now, but equal distribution is the worst imo.
I think, the ideal scenario would be something between 2 and 3, where you have a reasonable chance to get very wealthy if you work hard (the height of the right side of scenario 3), and a very high chance of living comfortably if you work hard (the steepness of scenario 3), and a small change of getting into financial trouble due to bad luck (low chance of medical bankruptcy), the left side of scenario 2.

A country where the top 1% owns 40% of the wealth, and take 25% of income and own half the stocks, bonds and investments, and the lower 80% owns 7% of wealth really isn't better than a country where the top 1% own owns 10%, and the lower 80% owns 50% or so.

In the past, the amount of wealth concentrated with just a few people has been a big driver of revolution/change, in many countries. The polarisation, and increasing extremists views (on all sides), and increasing dissatisfaction with just about anything, in my view, is, at least partly, driven by such a division. History has taught us that changes to such a division of wealth come sudden and dramatic, often with violence.

Wealth distribution would be better if the human vermin, lawyers, stopped helping the very rich in tax evasion!

quote:

Originally posted by BushPeter:

quote:

Originally posted by lavaca:
If you redistributed the wealth equally and took all the money from the wealthy and gave it to the poor so that everyone had exactly the same number of poker chips, in 20 years, it would be exactly the same.

Exactly the same as what? As what it's now? It took many decades to get to what it's now, but equal distribution is the worst imo.
I think, the ideal scenario would be something between 2 and 3, where you have a reasonable chance to get very wealthy if you work hard (the height of the right side of scenario 3), and a very high chance of living comfortably if you work hard (the steepness of scenario 3), and a small change of getting into financial trouble due to bad luck (low chance of medical bankruptcy), the left side of scenario 2.

A country where the top 1% owns 40% of the wealth, and take 25% of income and own half the stocks, bonds and investments, and the lower 80% owns 7% of wealth really isn't better than a country where the top 1% own owns 10%, and the lower 80% owns 50% or so.

In the past, the amount of wealth concentrated with just a few people has been a big driver of revolution/change, in many countries. The polarisation, and increasing extremists views (on all sides), and increasing dissatisfaction with just about anything, in my view, is, at least partly, driven by such a division. History has taught us that changes to such a division of wealth come sudden and dramatic, often with violence.

True, but look at Russia. Executed the 1%, or probably quite a bit more than that, now it’s back to exactly what it was, but the guy on top of the pile is now called the president rather than the Tsar.

Concentration of wealth at the top has been Republican policy since Reagan, as evidenced by their entire tax policy, their economic initiatives and a casual glance at who their donors are.

If you imposed a one-time 50% wealth tax on the top 1% it would almost pay off the National debt and would still leave them obscenely wealthy, but to fix the problem you have to un-fuck the tax structure. Yachts are tax deductible if your lawyer can semi-plausibly claim there is some business purpose involved but a teacher buying classroom supplies out-of-pocket cannot deduct them.

Just like Republicans want it.

Make me Emperor and I'll fix it with a floor and a ceiling: every adult Citizen, regardless of income, gets a check for $1,000 every month; nobody makes less. All income over $10 million is taxed at 50%, no deductions, all over $100 million at 75%, all over $1 billion at 99%.

The rich will still be vastly richer than the poor, the poor just won't be starving.

[QUOTE]Originally posted by Jefffive:
Concentration of wealth at the top has been Republican policy since Reagan, as evidenced by their entire tax policy, their economic initiatives and a casual glance at who their donors are.

If you imposed a one-time 50% wealth tax on the top 1% it would almost pay off the National debt and would still leave them obscenely wealthy, but to fix the problem you have to un-fuck the tax structure. Yachts are tax deductible if your lawyer can semi-plausibly claim there is some business purpose involved but a teacher buying classroom supplies out-of-pocket cannot deduct them.

Just like Republicans want it.

Make me Emperor and I'll fix it with a floor and a ceiling: every adult Citizen, regardless of income, gets a check for $1,000 every month; nobody makes less. All income over $10 million is taxed at 50%, no deductions, all over $100 million at 75%, all over $1 billion at 99%.

The rich will still be vastly richer than the poor, the poor just won't be starving.[/QUOTE

Yep, you are an under achiever, you are jealous of those that actually put it out there and did well......bitter now in your old age.....pathetic!

quote:

Originally posted by nute:

quote:

Originally posted by BushPeter:

quote:

Originally posted by lavaca:
If you redistributed the wealth equally and took all the money from the wealthy and gave it to the poor so that everyone had exactly the same number of poker chips, in 20 years, it would be exactly the same.

Exactly the same as what? As what it's now? It took many decades to get to what it's now, but equal distribution is the worst imo.
I think, the ideal scenario would be something between 2 and 3, where you have a reasonable chance to get very wealthy if you work hard (the height of the right side of scenario 3), and a very high chance of living comfortably if you work hard (the steepness of scenario 3), and a small change of getting into financial trouble due to bad luck (low chance of medical bankruptcy), the left side of scenario 2.

A country where the top 1% owns 40% of the wealth, and take 25% of income and own half the stocks, bonds and investments, and the lower 80% owns 7% of wealth really isn't better than a country where the top 1% own owns 10%, and the lower 80% owns 50% or so.

In the past, the amount of wealth concentrated with just a few people has been a big driver of revolution/change, in many countries. The polarisation, and increasing extremists views (on all sides), and increasing dissatisfaction with just about anything, in my view, is, at least partly, driven by such a division. History has taught us that changes to such a division of wealth come sudden and dramatic, often with violence.

True, but look at Russia. Executed the 1%, or probably quite a bit more than that, now it’s back to exactly what it was, but the guy on top of the pile is now called the president rather than the Tsar.

But between the last Tsar and the current president was hunderds of years, even between previous dictators there and the current president was a quite a long time.

In the past 100 odd years, what were the best decades in most countries?

quote:

Originally posted by BushPeter:

quote:

Originally posted by lavaca:
If you redistributed the wealth equally and took all the money from the wealthy and gave it to the poor so that everyone had exactly the same number of poker chips, in 20 years, it would be exactly the same.

Exactly the same as what? As what it's now? It took many decades to get to what it's now, but equal distribution is the worst imo.
I think, the ideal scenario would be something between 2 and 3, where you have a reasonable chance to get very wealthy if you work hard (the height of the right side of scenario 3), and a very high chance of living comfortably if you work hard (the steepness of scenario 3), and a small change of getting into financial trouble due to bad luck (low chance of medical bankruptcy), the left side of scenario 2.

A country where the top 1% owns 40% of the wealth, and take 25% of income and own half the stocks, bonds and investments, and the lower 80% owns 7% of wealth really isn't better than a country where the top 1% own owns 10%, and the lower 80% owns 50% or so.

In the past, the amount of wealth concentrated with just a few people has been a big driver of revolution/change, in many countries. The polarisation, and increasing extremists views (on all sides), and increasing dissatisfaction with just about anything, in my view, is, at least partly, driven by such a division. History has taught us that changes to such a division of wealth come sudden and dramatic, often with violence.

Lavaca is correct. The distribution is not accidental…it occurred by economic evolution.

That opinion is why labor can be mobilized against folks like you.

How much of the wealthy's money is just sitting in a bank?
What would happen to companies that the wealthy are invested in, if they suddenly have to divest to pay off this distribution number?
Way more to think about than Scrooge Mcduck diving in silos of money, given away.
There is always a downside to extreme change as suggested. I have yet to see anyone delve into what that would look like.

Make all the money you can.

I am just pointing out stating that a man who has accumulated wealth based on an evolutionary paradigm is a political, if not real fallacy.

Trump with his fraud and bankruptcies prove that.

I not sure how one can apply the biological concept of evolution to economics?

One thing is evident, Dr. Easter nor anyone’s wealth, whatever it may be, makes that person a better citizen or more a citizen.

Where in the data, has it comes up wealth or lack of, makes a good or bad person?

By way of background, I was a CPA before I went to law school and while I don't practice tax law, that's what I wrote my thesis on. Let's talk tax theory for a moment.

First of all, the purpose of taxes should be to raise revenue to fund the government (which should be as small as possible, but that ship has sailed). The US missed the boat a long, long time ago when it started to use the tax system to implement social policy.

Do you like productivity? It increases GNP, provides jobs, etc. So I assume everyone can agree that productivity is good. Yet, we have an income tax. A tax on productivity. That's counterintuitive.

Then, the income tax systems uses credits, deductions and other perks to influence social policy. Again, not the purpose of a tax system. For example, the government decides that it wants to encourage home ownership, so we have a mortgage deduction. Why? We have a deduction for charitable contributions. Why? It makes no sense from the standpoint of tax theory. We have an earned income credit where low income people can get a tax refund that could exceed any taxes they paid. Why is that in the tax code, it's simply another form of welfare? I could go on, but you get the point. We shouldn't have an income tax at all, and it certainly shouldn't be progressive, nor should it be used to influence social policy. We should encourage and incentivize everyone to make as much money as they can for the economy's sake. And this country provides great opportunities for people who are smart and willing to work hard. There are tons of examples. Let's encourage them to do so.

So how do you do that, and still raise money to run the government and make it fair?. Easy really. A consumption tax rather than an income tax. Why? Easier enforcement and it's a naturally progressive tax system that necessarily taxes the wealthy much higher than the rank and file or poor.

You could exempt some things from the tax, staples, such as flour, bread, eggs, milk, etc., but still tax T-bone steaks, alcohol, and luxury food items. Everyone would be taxed not on what you make, but what you spend. Totally fair. Unless you are Warren Buffett, rich people spend more than poor people so they pay the lion's share of the taxes.

Some would argue that this would discourage spending and would be bad on the economy, but that is not true. First, it is easy to discourage production by taxing it, but it is much harder to discourage purchasing by taxing it. Everyone has to purchase some things, so they would pay some tax. Folks who buy a car, for example, would be taxed based on the price of the car they buy. A fair, progressive tax.


If you want a Toyota C0rolla, your tax is a whole lot less than the guy who wants a Bentley. And the guy who feels the need for a yacht or a private jet isn't going to not buy it because of taxes, especially if he isn't taxed on income.

The beauty of this system as that rich folks have proven they can make money so encourage them to make more and more. They will necessarily hire people to help them make more and more and the folks they hire will make more. And they will all go out and spend that money -- and get taxed when the spend it.

What they don't spend, they will invest in new businesses with the goal of making more money and more people will make more money that they will spend and incur more consumption taxes.

If you simply take money from the "rich" and give to the "poor" what would happen? The vast majority of the "poor" would simply spend it and be left with nothing. And if you didn't have a consumption tax, the government would get nothing. Some people build and others don't. The former should be encouraged and by doing so, we'd collect more tax dollars.

quote:

Originally posted by ledvm:
Lavaca is correct. The distribution is not accidental…it occurred by economic evolution.

It is indeed inherent to capitalism, but there is a max to it, after which large and rapid changes take place.

See this image:



There seems to have been a peak just before WWI, and the share of income going to the top 1% decreased steadily from WWI and WWII, then remained pretty stable until the 70's. Interestingly, the pattern between communist and capitalist countries was fairly similar, and again, from the 70's, it started increasing, pretty much everywhere, in communist countries, in capitalist countries, only in more socialist countries like Sweden and France it remained more stable.
A large concentration of wealthy with few individuals in a society just isn't sustainable in the long run, it feed polarisation, and resistance against 'elites', at some point, that unhappiness will ignite a sudden and large shift.

quote:

Originally posted by Saeed:
Wealth distribution would be better if the human vermin, lawyers, stopped helping the very rich in tax evasion!

Little need for accountants if not for taxes.

I would view a Bell Curve variant as about right for distribution of income and assets.

Not likely...

quote:

Originally posted by lavaca:
If you want a Toyota C0rolla, your tax is a whole lot less than the guy who wants a Bentley. And the guy who feels the need for a yacht or a private jet isn't going to not buy it because of taxes, especially if he isn't taxed on income.
...
What they don't spend, they will invest in new businesses with the goal of making more money and more people will make more money that they will spend and incur more consumption taxes.

But if my business is an airline, and my investment is new planes, would there be tax on new planes I buy? Or would that be lower taxed, as it's a business investment? If either is the case, than I wouldn't buy a private yet, I set up a company which buys the jet, and then leases it out to another company, which rents it to me. And I'd claim my trips were business trips, at a lower tax.

Ideally that would not be the case, but don't forget, the people who create the tax laws, either have an incentive to leave holes in the law, or are heavily lobbied to do so.

I recently read another reasoning, that tax isn't to fund government, but to curb inflation. The government has no shortage of money, they can just print it, but if they print too much, it increases inflation. One way to curb inflation is to take money out of the system, and tax is a good way to do that.

When following the current debate in the UK it's the classic that labour (democrates) want to raise taxes and the tories (republican) to lower them. However, over 800 billion pounds in taxes is raised each year, and the tories want to lower this with plans which will reduce it by about 10 billion, while labour wants to increase it by even less than that. But it's clear that they're arguing about insignificant amounts on the grand scale, so nothing much will change.