What should be done to reduce income inequality?

I never understood how calling someone a neckbeard was an insult. Certain guys need to feel bad for having hair on their necks...that they can shave off? It doesn't make any sense.

I think this is a huge misconception regarding our tax system that people don't get.

It definitely is. It's staggering, actually, how many people don't understand this. The people I've encountered who do are definitely in the minority - like 1 out of 10.

Capitalism.. the rich will get richer. the poor stayed poor.

It's perspective. Compared to something closer to an ideal world it is messed. Compared to the history of the world it is a big improvement. Money in the form of savings/wealth is not the most important thing. What matters is actual living conditions, health, education, lifespan etc. which are all getting much better both in the developed and developing world.

You could take all the money of the top 400 people and give it to the bottom poor 50% and nothing substantial would change. It is like giving food aid to the starving; admirable yes, but once the food runs out you are back to the start. And all of the top 400 persons' money is actually trivial compared to worldwide measures of GDP.

Productivity, technical and scientific advancement, and the social aspects of living together are what improves us over time. You could argue that changes in redistribution policy would help with the latter, which I would agree with but I'd also point out that it is changing and improving already. No one gave a damn what happened 3 villages over the hill, valley, or sea a few hundred years ago let alone halfway around a flat earth.

What has allowed the modern fabulously rich to get rich is infinitely better than yesteryear's kings getting rich at others' expense. Modern wealth creation is not a zero sum game.

And if we were part of some world government your argument would hold water. We aren't. We are made up of separate nations. Make your judgments on those countries that are failing in their duty to provide their citizens a better life. Not the ones that aren't.

So what? So long as everyone has the same rights, it doesn't matter who is rich or who is poor.

That's the first time I'm hearing of this.

I strongly disagree with that sentiment. So you think nothing should be done to close the income inequality gap just because we all supposedly have the same rights?

No, I just don't think rabidly hating and punishing rich people is the way to go about closing the income inequality gap. Creating jobs and strengthening the economy is the way to do it. Hating people because they make more money than you is a childish viewpoint, one that will get you nowhere in life.

Oh don't worry, I'm still conservative. :P

You know we don't give feudalism enough credit. The industrial revolution depended on technology that was developed under feudal society. Couldn't have happened any other way.

The only people utilizing loopholes and tax shelters are the wealthy class, those that can afford to do such things. Thus, as is, they aren't even feeling the full brunt of the taxes they are meant to pay. They are allowed to skimp out on paying taxes while everyone else doesn't have the means to do the same. Why reward them by lowering their tax rate just because they have been avoiding paying all these years?

@StrifeDelivery: First off, what you said isn't true: http://www.cnbc.com/id/101264757

http://money.cnn.com/2013/03/12/news/economy/rich-taxes/

Second, a flat tax rate wouldn't be a reward for the rich. It would be simplifying the tax code for everyone else and reducing the amount the middle and lower class gets taxed. In fact, this would probably require the rich to pay slightly more, as many of the loopholes and tax shelters would be removed.

@JyePhye: http://www.forbes.com/2011/06/01/fair-tax-is-flat-tax.html

Natch :P

And as an independent, that's fine by me. I oppose rigid ideologies and prefer a pragmatic approach. While we (the electorate at large) may disagree on a certain policy, the merits of that individual policy are what's worth discussing in my mind - not whether some long debunked ideology is superior to some other long debunked ideology.

Um... your links didn't refute anything I said. Especially since your links actually made my point. Everyone knows the rich pay more, simply because they have more. Your links state that they are able to utilize several tax breaks and loopholes to reduce the amount they owe, which again, is what I said: "Thus, as is, they aren't even feeling the full brunt of the taxes they are meant to pay". Also, you might want to look at your link:

"But the rich are able to take advantage of tax breaks too. That's why Williams said there's a popular notion that the wealthy are somehow cheating the tax man. In fact, the Tax Policy Center found last year that there about 4,000 households with incomes over $1 million that were not paying anything at all."

And also from your link:

"When factoring in state and local taxes, the top 10% pay just under half the tab. And when calculating tax burden as a percent of income, the tax code is even less progressive. The top 10% paid an average of 30% of their income in local, state, and federal taxes in 2011, said McIntyre. That's not much different than the 25% percent paid by the middle class.

"The system is a little progressive, but not much," McIntyre said.

Still, the wealthy are paying more taxes on a federal level simply because they are making so much more money. The top 10% of taxpayers take home 45% of the nation's income, according to Citizens for Tax Justice. Moreover, they seem to be getting richer all the time."

So yeah, your links didn't refute anything I said. Again, a flat tax is a reward for the rich, there is no other way around this. Simplifying the tax code is a great start, dealing with loopholes and shelters are great. But dropping their taxes down to 10% is laughable. In fact, we need to reduce taxes for the lower and middle classes, decrease the tax rate for the top bracket, and then add an extra two brackets at the top.

I have never understood the reference myself. Maybe it has something to do with being unkempt and lazy? I've usually seen it in reference to the so-called "basement dwellers" and such... but then you have to wonder why he would consider me that, since I am employed, live on my own with my girlfriend and pay taxes like everyone else.

The other part of that comment he made, regarding "pseudo-intellectual" is funny, since I never claimed to be an intellectual or an academic, and was just offering a possible solution to a problem no one seems to have a solution to these days.

Get money out of politics.. Large corporations and their heads have cultivated a environment within the US (by flooding massive amounts of money into it) have created a unsustainable situation in the country all in the name of maximized profits.. This was largely the reason for the last crash years back, in which executives were making deals they knew would lead to a collapse but did it anyways because of the golden parachute clause and the massive amount of money it would lead to them personally shortly afterwards.. This is the problem with the two America's.. For the middle class and lower, if you **** up you lose your job, so it is in your best interest not to **** up.. While in the Wall street upper class, you purposefully **** up because of the massive pay day it leads to after (while ignoring the consequences after that) than conveniently "resign" afterwards with a golden parachute worth millions while the lower people have to pick up the tab. In fact the last crash uncovered people flat out breaking the LAW, in which many were not even prosecuted for to begin with.. Meanwhile our government is throwing the book at people with minor drug offenses..

Perhaps poor people deserve to be poor. Have you ever considered that. I did explain why I disagree with you and left the personal attacks out, all I got was called a prick. The other guy is getting what he deserves...cigars-university.com

Yes, but you misunderstand: Voltaire's quote regarding taxes was not in regard to taxation aimed towards redistributing wealth into the hands of the poor: it had to do with taxes being used to fill the coffers of the already wealthy aristocracy throughout Europe. ;)

Another BRHD alt? Aren't these against the rules?

And you probably got called a prick because you're saying poor people deserve to be poor. Don't be a dick next time.

Except that we have seen countries rise out of 3rd world status.

Mexico is a good example of this. Check out 1980 vs 2011

1: Poor people have a safety net so we need to held the middle class that gets screwed by both high taxes and no subsidies.

2: Decrease unnecessary environmental regulations that price the middle class out of utilities and things like new cars.

3. Eliminate social security tax so we can put our own money in a 401k. Also, social security tax is regressive, should either make it flat tax or progressive.

4. Reduce taxes by stopping spending money on unwanted wars.

5. Reduce taxes by making all forms of corporate subsidies illegal through passing an amendment to the constitution.

i think anyone who has more money than they can hold in their 2 hands ought to give the rest to me

@StrifeDelivery: It's a "reward" for the middle and lower class. 10% is less than 30%. Furthermore, while the rich pay higher taxes, it's because they have more money, not because they have a higher (or lower tax rate). Those households that had a million dollars of income and didn't pay anything would still have to pay 10%. Of course the rich are not feeling the "full brunt" of taxation. Again, they are rich. they hardly feel the brunt of anything. What the flat tax does is make it so those who feel the brunt of taxation (middle and lower class) pay LESS in taxes.

The rich seem to pay less in taxes because they have the ability to use their money for things other than surviving. They invest in the economy (get a tax break), they make donations (get a tax break), they move money around offshore accounts (no taxes). The flat tax effectively ends that. You pay 10% of your gross earnings, regardless of how the money was used. You're trying to say that they don't pay taxes at all, when in actuality, they do. They pay the bulk of the taxes because they make the bulk of the money. What they don't do is pay the same percentage as the middle and lower class, due to the various loopholes.

I have no idea what you're talking about as Voltaire is not quoted anywhere in your article, to which I was responding. Suffice to say that I will take Forbes over Daily Kros when it comes to economic policies and advice.

Pay cuts for the top 10% and a matching raise for the lower 90%. Better education opportunities for people of limited income working for a living but still trying to better their situation, and giving people an actual incentive to work since right now, for a lot of people, it's a better life living off assistance than actually working.

You seem to keep finding ways to miss the point or repeating information that has already been stated, or even, better yet, trying to say I said certain things, so let's go through this line by line then. It's not a reward for the middle and lower class, since the lower class hardly pays any tax (incredibly low percent rates) to begin with due to certain deductions at their disposal, or even having a negative tax liability. I mean, look at effective tax rates here:

So, as you can see, the lowest and second quintile are far below 10%, the rate which you are advocating for with your flat tax. Even the middle quintile is hovering around the 10 % mark. So really, here, the only people taking advantage of a flat tax are the fourth and highest quintiles, while the tax rate would increase for the lowest income individuals.

The rich pay higher taxes because they A) have more money to be taxed and B) have higher tax rates. Somehow you missed the point of what I meant by "full brunt of taxation". I did not mean brunt as in feeling the effect of taxes, but as was mentioned in that post, that they are able to find ways to significantly reduce their tax rates (or not pay at all) due to loopholes and tax shelters. No idea where you think that a flat tax would help low income people, it just doesn't exist. I'm not "trying to say they don't pay taxes at all", please read again. As I've said time and time again, they have the means to significantly reduce their tax rates due to various loopholes that exist; or find means to not pay by hiding their money in tax shelters. See how that works, it is an OR scenario: Significantly reduce tax rates by finding tons of loopholes OR find means to not pay by hiding money in tax shelters.

Everyone knows they pay the bulk of taxes because they make the bulk of money, no new info there. And we know they don't pay the same percentage as middle and lower class, due to the various loopholes, something which I've already talked about. We need to simplify the tax code and close down the tons of loopholes used.

.......He's quoted in your article. Right there. At the very top.

Did you even read the Forbes article you posted? :|

I don't know where it was (probably Sweden) but they proposed a law which would force businesses to pay their highest earning employees an amount proportional to the lowest earning. This seems to me like a decent idea, if the highest payed workers are going to get payed more, then to do so the lowest salary in that firm has to be raised, this will keep everybody mostly happy and the wage gap controlled. I know you said no talking about raising the minimum wage, but this isn't exactly as simple as that; it would have its immediate results and benefits.

Also, seeing the deplorable state of the quality of many american lives... why would anyone suggest less government intervention? By that do you mean privatising everything and not offering things like universal healthcare or education?

Looks like the answer is no.

Hahaha indeed

It does sound decent on paper, but I wonder if they would just skirt around that by paying their highest earning employees (CEO's for instance) with smaller wages and then giving higher bonuses, such as increased stock options.

@StrifeDelivery: Well things like those can be fixed... For example you could count stock as part of the wage of higher-earning employees simply by taking into account the present value of shares, and a cap on bonuses isn't as extreme as a wage limit so maybe that could work.

Yeah, I was just trying to think like a US CEO on how to skirt around those pesky laws. I mean, US CEO's make around 350 times that of their average worker, whereas, the next highest country, Switzerland, pays their CEO's only 148 times that of the average worker. So as you can see, that greed is pretty powerful.

Doesn't matter anyway since exercising options automatically triggers regular income tax on the spread, alternative minimum tax, or capital gains tax depending on the circumstance and type of options. You can't avoid paying tax and the worst case would be triggering a calculated tax amount at exercise and then having to hold for two years and watch the stock go down thereby paying tax on phantom income.

@SUD123456: Then don't get payed in shares, get paid in money, and that way it's like we never had the problem to begin with.

How about abolishing money completely so everyone has to work equally for the betterment of mankind rather than accruing pointless money.

Only the greedy and corrupt would say this is a bad idea.

@StrifeDelivery: You seem to not understand the current tax brackets, so let me explain.

The poor don't pay any taxes. These are people living at or below the established poverty line for their area. These are the people that qualify for government assistance.

The lower class are people that get by paycheck to paycheck, but don't qualify for government assistance. They pay taxes.

The middle class are people that have some savings and some assets, and don't qualify for government assistance. They pay taxes

The rich are ... well rich. They pay taxes, but have more money than they know what to do with. They invest. They diversify. They use their abundance of money to make more money. They pay taxes.

A flat tax system would not change anything for the poor. They will continue to not pay taxes and get government assistance. A flat tax system would reduce the tax burden on the lower and middle class, as their tax rate would drop from about 30-40% to 10-15%. That would leave them more money to spend on the economy or save for retirement/emergencies. The rich would also end up paying about 10-15%, but due to the closure of many loopholes, they would pay a little more in taxes than they currently do. This increase would not effect them. Thus, the full brunt of taxation would be reduced for the people who need it reduced the most.

You clearly don't understand sarcasm, nor why Forbes would use that quote. Voltaire was a socialist.

How can you not understand how your own tax system works, how do you even check if you paid enough or too much taxes lol

@deeliman: pay someone and use software that does it. I have no idea what I am doing I just let the software guide me and hope it's right.

I'd like to see a flat tax that eases some of the tax burden for the middle class. Maybe something around 15%-20% and also close a lot of the loopholes the very rich use to pay less effective rates than people making less than them.

Progressive taxation sounds like a sensible start to me. Proper financial regulations to limit tax evasion and undeserved/unwarranted tax breaks. Provision of average-quality public services and free universal healthcare so that lower and middle classes won't get their backs broken trying to pay for basic necessities. Oh and the abolition of money politics is a top priority.
I understand that not all of these "suggestions" directly affect income levels, but they help improve the quality of life for a large portion of society while relieving them financially to an extent. That ought to improve their financial security and standards of living which are really what we're seeking by tackling income inequality. Besides they conduce to a better system of distributive justice which will inevitably reduce income inequality.

I'm not an expert in economics. In fact my knowledge in the field is modest. But it doesn't take a genius to realize that income inequality is mostly a nontechnical problem to begin with. Instead its mostly a human mentality problem. Its not hard to realize that the vast majority of many societies are constantly threatened by abject poverty because of a handful of looters who's suffocating the economy and plundering the country. In most societies even kids know that much about their countries.

No I don't. Most rich people who pay taxes would not notice if they paid 5% more or less in taxes. In actuality, they don't even do their taxes. They pay people to do them. It would not affect their ability to buy what they want, nor invest how they want.

Because it's very complicated.

I think the reason a lot of people don't know about this is most people don't actually pay their taxes. Most people make hourly wages or salary and have their taxes taken automatically out of their paychecks. Then all they have to do at tax time is claim their deductions or whatever and either pay the difference or get their refund. Basically there's not a lot of effort since for the most part someone else has setup paying their taxes for them. Not a lot of people are actually calculating their total income, going through the brackets, etc...they simply take their tax forms (which come already filled out) down to H&R block with some receipts (for child care/mortgage/etc) and have the tax person fill in the blanks.