My Opinion

Inequality-equality or a fair chance at doing better?

Some pundits speculate that Old BS did so well in Iowa and NH because he emphasized inequality more than any other issue. If that is true, it’s quite scary in my view. Do American voters truly believe everyone should be equal and that government (mostly via higher taxes on some Americans) is the vehicle to accomplish that?  If so, it appears this Country is heading over the precipice.

That’s not because of the call for democratic socialism per se, but because of the change in attitude of too many (young) Americans about hard work, personal responsibility and all that goes with traveling the long road to success as far as you want to go. Getting to the top never was getting a job, staying in it and hoping an annual raise made you comfortable. While we have redefined “comfortable,” achieving success of the type we are encouraged to envy today has not changed.

If you are in the Sanders camp, exactly what do you expect his brand of government and taxation to do for you?  Do you believe only rich people will be taxed more? Do you see the definition of equality including more and more government programs that support your standard of living? Or, are you simply mad that some Americans have a lot more than you do?

Speak up!

We hear over and over about the growth in wealth of some Americans over the last decade. Most of that growth has come from investment assets and that growth was available to every American with an IRA or 401k plan. I know average Americans can’t afford to save and invest; that simply is not true except for the lowest income individuals most of whom are receiving public assistance in some way.

Clearly there is more to incomes and wealth than the stock market. The global nature of our economy, changing jobs, technology and more are factors as well. Ask your favorite candidate what they propose to do about the real factors.

Did you participate in the growing stock market since 2008? S&P 500 chart from Bloomberg

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Categories: My Opinion, Politics

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2 replies »

  1. I encourage you to read the 2/1/16 Forbes article: “… Almost Everything You’ve Been Told About Inequality Is Wrong” by John C. Goodman.

    He notes, in part:
    – “It is well known that inequality increases with age, with the greatest inequality existing among the elderly.”
    – A typical income distribution study compares the entire population – focused on those at the top and bottom rungs of the income ladder – which ignores the fact that it includes people starting out, at peak earnings, or retired.
    – Wealth distribution studies have greater challenges – they count private savings and pensions but exclude Social Security – which for a 60 year old couple at max FICA wage earnings has a present value of over $1MM in benefits.
    – He compares those in their 40’s. Those in the top quintile will garner 55% of the age group’s resources, while those in the bottom quintile will only get 4% – a 14 to 1 ratio. But, after government transfer programs, the difference drops to 7 to 1.
    – Among 70 year olds, redistribution is greater. The top 1% have an effective tax rate of about 27%. The bottom quintile have a negative tax rate of 700%!!!!. For every $1 of private income, they get $7 in government benefits.

    He concludes: “… Overall, our fiscal system is highly progressive. There is a price to be paid for this progressivity, however. The more redistribution that takes place, the smaller the rewards for working, saving and investing and the larger the rewards for not working, not saving and not investing. That has to be bad for economic growth.

    I affirm – more stinking progressive tax rates and wealth redistribution won’t solve the problem, only increase government spending and deficits (as we have seen the impact of high marginal rates (and low marginal rates) on tax receipts).

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  2. I don’t regularly watch O’Reilly, but I did last evening. His talking points memo criticized those who wanted “fair” reporting by the media. Then, at the very end of the memo, he claimed that he was being “fair”.

    “Fair” is not “equity” or “equivalently”. Fair treatment means treating me the way I believe I deserve to be treated. Equitable treatment means treating similarly-situated people the same (horizontal equity) and treating differently-situated people differently (vertical equity).

    So, it would be best if someone would educate Americans that being “fair” is not being “equitable”. Similarly, people need to know that fairness is not equivalence.

    It just ain’t fair out there (if you didn’t already know).

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