Wealth Inequality Hurting Economy (duh)

[birdog1960]

Since I can't ask Yellen, I'll have to settle for you:

 

What's the difference between wealth and income?

 

How does taxing $250k incomes at a 40% (or higher) rate create wealth equality?

go back to the equities. look at who owns the majority of them and how capital gains are taxed. then look at executive pay. then look at average wages and the minimum wage. plenty more to look at. yellen is right. and it's a big problem and threat. perhaps you should read the article summarizing her speech.

[keepthefaith]

go back to the equities. look at who owns the majority of them and how capital gains are taxed. then look at executive pay. then look at average wages and the minimum wage. plenty more to look at. yellen is right. and it's a big problem and threat. perhaps you should read the article summarizing her speech.

 

So what do you feel is the solution to this problem?

[birdog1960]

So what do you feel is the solution to this problem?

i think that artificially propping up the market with ultra low interest rates is certainly worsening the problem. i'd start there.

[TakeYouToTasker]

go back to the equities. look at who owns the majority of them and how capital gains are taxed. then look at executive pay. then look at average wages and the minimum wage. plenty more to look at. yellen is right. and it's a big problem and threat. perhaps you should read the article summarizing her speech.

I see...

 

It isn't so much that you want the poor or middle class to have more, it's that you want the wealthy to have less, so you've set about on a game of investment "whack-a-mole", hoping to discourage their investment in equity securities.

 

That's just grand.

 

You apparently don't understand why there are different rates of taxation for different types of earnings. I can summarize it for you in two words: "risk" and "incentivization".

 

First, let's talk about risk:

 

There is no risk involved with receiving an income. You contract with an employer in an agreement in which they agree to compensate you an agreed upon amount for services rendered. End of story.Investment, however, carries a great deal of risk. There is no guarentee of return, and there always remains the possibility of loss of principle.

 

This is a nice clean segue into incentivization: capital formation is absolutely essential to the growth of business, and investment is necessary to capital formation. Growth of business is vital to creating a thriving economy... but with investment being a risky proposition, how do we lure those necessary investment dollars?

 

We do so with favorable tax treatment of those dollars, as money always flows where it's treated best. The government actors you put so much faith in already know this. Ask your favorite local politician why he doesn't push to remove the tax free status of state and municipal bonds. He'll tell you that if that happened, people wouldn't invest in them, and the government needs those funds. The tax free status is for investor incentivization.

 

So, all you're really accomplishing when you whack that nasty equities mole, is driving investment dollars elsewhere, which hurts business, which hurts Main Street.

 

So you might say, "Well, then we'll tax whatever they move onto next."

 

That's swell and all, but the end game is that you've chased trillions of dollars out of the US economy, because the truely wealthy and the captains of industry, who you've named your enemy, aren't constrained by the domestic economy. They'll take their assets elsewhere. You're already seeing the impact of this with the literally trillions of corporate dollars sitting on the sidelines outside of America, because the cost of repatriating them is too high.

 

In the end, as usual, the only people you wind up hurting is the American middle class.

[birdog1960]

I see...

 

It isn't so much that you want the poor or middle class to have more, it's that you want the wealthy to have less, so you've set about on a game of investment "whack-a-mole", hoping to discourage their investment in equity securities.

 

That's just grand.

 

You apparently don't understand why there are different rates of taxation for different types of earnings. I can summarize it for you in two words: "risk" and "incentivization".

 

First, let's talk about risk:

 

There is no risk involved with receiving an income. You contract with an employer in an agreement in which they agree to compensate you an agreed upon amount for services rendered. End of story.Investment, however, carries a great deal of risk. There is no guarentee of return, and there always remains the possibility of loss of principle.

 

This is a nice clean segue into incentivization: capital formation is absolutely essential to the growth of business, and investment is necessary to capital formation. Growth of business is vital to creating a thriving economy... but with investment being a risky proposition, how do we lure those necessary investment dollars?

 

We do so with favorable tax treatment of those dollars, as money always flows where it's treated best. The government actors you put so much faith in already know this. Ask your favorite local politician why he doesn't push to remove the tax free status of state and municipal bonds. He'll tell you that if that happened, people wouldn't invest in them, and the government needs those funds. The tax free status is for investor incentivization.

 

So, all you're really accomplishing when you whack that nasty equities mole, is driving investment dollars elsewhere, which hurts business, which hurts Main Street.

 

So you might say, "Well, then we'll tax whatever they move onto next."

 

That's swell and all, but the end game is that you've chased trillions of dollars out of the US economy, because the truely wealthy and the captains of industry, who you've named your enemy, aren't constrained by the domestic economy. They'll take their assets elsewhere. You're already seeing the impact of this with the literally trillions of corporate dollars sitting on the sidelines outside of America, because the cost of repatriating them is too high.

 

In the end, as usual, the only people you wind up hurting is the American middle class.

there is a sweet spot where people still invest,, still remain in the country yet pay more (closer to their fair share if you like). we aren't anywhere near that sweet spot. we are in a massive, logrythmic spiral of wealth inequality rapidlky approaching 3rd world status in terms of the difference between haves and have nots. no one believes trhis to be healthyv including yellen and many other enlightened elites, many of whom are very wealthy. btu you see this market manipulation as tolerable all the while shouting liberterian slogans from the rooftops. why should anyone pay attention?

[TakeYouToTasker]

there is a sweet spot where people still invest,, still remain in the country yet pay more (closer to their fair share if you like).

There is no such thing. The investors you are seeking to hurt are very intune with the market. Their dollars will begin immediately to flow to area's of investment generating higher rates of return. They will not settle for depressed returns when alternative are available.

 

we aren't anywhere near that sweet spot.

Define it.

 

we are in a massive, logrythmic spiral of wealth inequality rapidlky approaching 3rd world status in terms of the difference between haves and have nots.

Baloney. These "have not's" as you define them, don't lack for anything. They have a roof over their heads, drive cars or have other affordable transportation options, have luxury entertainment, and have enough access to food that we actually have an obesity epidemic amongst our poor.

 

Capitalism has raised the standard of living so high, that being poor in America has gone from this:

 

http://www.digitalhi...tID=2&psid=3175

 

Life expectancy for white Americans was just 48 years and just 33 years for African Americans--about the same as a peasant in early 19th century India. Today, Americans' average life expectancy is 74 years for men and 79 for women. The gap in life expectancy between whites and non-whites has narrowed from 15 years to 7 years.

 

In 1900, if a mother had four children, there was a fifty-fifty chance that one would die before the age of 5. At the same time, half of all young people lost a parent before they reached the age of 21.

 

In 1900, the average family had an annual income of $3,000 (in today's dollars). The family had no indoor plumbing, no phone, and no car. About half of all American children lived in poverty. Most teens did not attend school; instead, they labored in factories or fields.

 

To this:

 

http://www.heritage....erty-in-america

 

The following are facts about persons defined as "poor" by the Census Bureau, taken from various government reports:

• Forty-three percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
  
• Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.
  
• Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
  
• The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
  
• Nearly three-quarters of poor households own a car; 31 percent own two or more cars.
  
• Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
  
• Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
  
• Eighty-nine percent own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher.
  

 

no one believes trhis to be healthyv including yellen and many other enlightened elites, many of whom are very wealthy.

 

It's not about total assets, it's about the standard of living, and our standard of living is absurdly high. When those we consider poor have as much as they do, it is not unhealthy, and any argument to the alternative is nothing more than jealousy.

 

You can't explain to be how it's unhealthy, because it isn't.

 

btu you see this market manipulation as tolerable all the while shouting liberterian slogans from the rooftops.

 

What market manipulation?

 

Interest rates?

 

I certainly don't find it tolerable for reasons I've stated dozens of times on these boards. I was opposed to it for exactly the reasons I've stated upthread.

 

why should anyone pay attention?

 

Enlightened self interest.

[Alaska Darin]

there is a sweet spot where people still invest,, still remain in the country yet pay more (closer to their fair share if you like). we aren't anywhere near that sweet spot. we are in a massive, logrythmic spiral of wealth inequality rapidlky approaching 3rd world status in terms of the difference between haves and have nots. no one believes trhis to be healthyv including yellen and many other enlightened elites, many of whom are very wealthy. btu you see this market manipulation as tolerable all the while shouting liberterian slogans from the rooftops. why should anyone pay attention?

Nice !@#$ing sloganeering. You might qualify as a "scientist" but you know virtually dick about economics or how markets work.

[B-Large]

It seems to me the portion of the American economy defined as finance, or financial services- the place where rich people grow their wealth at an accelerated rate while most Americans don't have a clue how to make money in that sector- is growing and the disparity is increasing- coincidence, or cause and effect? If that sector and its growing prominence is a culprit, who do the Government's QE programs help, really?

 

I honestly think it has a lot to do with just too many people. With a shortage of hands, there would be higher wages and competition over skills. As it stands today, there are tons of people with very few unique of in demand skills and an economy that does't need them anyway.

[Chef Jim]

It seems to me the portion of the American economy defined as finance, or financial services- the place where rich people grow their wealth at an accelerated rate while most Americans don't have a clue how to make money in that sector- is growing and the disparity is increasing- coincidence, or cause and effect? If that sector and its growing prominence is a culprit, who do the Government's QE programs help, really?

 

I honestly think it has a lot to do with just too many people. With a shortage of hands, there would be higher wages and competition over skills. As it stands today, there are tons of people with very few unique of in demand skills and an economy that does't need them anyway.

 

To your highlighted part all I have to say is Bull Crap!! And for those that don't have a clue there are plenty of places to go and get a clue.

[Tiberius]

i think that artificially propping up the market with ultra low interest rates is certainly worsening the problem. i'd start there.

It will trickle down to the masses eventually, won't it? That's the theory anyway

 

 

You apparently don't understand why there are different rates of taxation for different types of earnings. I can summarize it for you in two words: "risk" and "incentivization".

 

First, let's talk about risk:

 

There is no risk involved with receiving an income. You contract with an employer in an agreement in which they agree to compensate you an agreed upon amount for services rendered. End of story.Investment, however, carries a great deal of risk. There is no guarentee of return, and there always remains the possibility of loss of principle.

of corporate dollars sitting on the sidelines outside of America, because the cost of repatriating them is too

oh come on, capital gains is lower because those that pay capital gains have the big bucks to lobby the government to lower the rates.

[TakeYouToTasker]

Profound.

 

Tell me more, Water Boy.

[Doc]

It seems to me the portion of the American economy defined as finance, or financial services- the place where rich people grow their wealth at an accelerated rate while most Americans don't have a clue how to make money in that sector- is growing and the disparity is increasing- coincidence, or cause and effect? If that sector and its growing prominence is a culprit, who do the Government's QE programs help, really?

 

I honestly think it has a lot to do with just too many people. With a shortage of hands, there would be higher wages and competition over skills. As it stands today, there are tons of people with very few unique of in demand skills and an economy that does't need them anyway.

How about some of Barry's biggest campaign donors?

[Tiberius]

 

Profound.

 

Tell me more, Water Boy.

Funny, I throw reality onto your cute litte theory and get called names. Deep man, deep.

[Tiberius]

 

 

To your highlighted part all I have to say is Bull Crap!! And for those that don't have a clue there are plenty of places to go and get a clue.

What, from people that think they have a clue and don't?

[/dev/null]

To your highlighted part all I have to say is Bull Crap!! And for those that don't have a clue there are plenty of places to go and get a clue.

 

A clue? A raging clue?

 

 

[birdog1960]

It seems to me the portion of the American economy defined as finance, or financial services- the place where rich people grow their wealth at an accelerated rate while most Americans don't have a clue how to make money in that sector- is growing and the disparity is increasing- coincidence, or cause and effect? If that sector and its growing prominence is a culprit, who do the Government's QE programs help, really?

 

Firstly, people think they know how to make money in this sector. they just don't have the dollars to invest. and then they don't make money in the sector while a small minority does. it's a vicious cycle that accelerates the wealth inequality that would result from our system eventually anyway. Secondly, buy and hold has always been the mantra of the financial experts when schooling th e average joe on investing. except it doesn't work, at least hasn't lately. even with the artificially elevated market today. buy and hold of the s and p over the last 10 years would have resulted in less than a 1% return (i'll look for the reference later. it may have been the 10 year period ending last year). at any rate, buy and hold is rarely the strategy of the folks whose wealth is spiraling into the stratosphere. which again acce;erases the inevitable movement towards more wealth inequality.

 

and the QE programs have done the same. they have helped the avg joe very little while enriching big investors hugely. and many of them will know when to get out when the time comes. lets call it intuition.

[KD in CA]

Baloney. These "have not's" as you define them, don't lack for anything. They have a roof over their heads, drive cars or have other affordable transportation options, have luxury entertainment, and have enough access to food that we actually have an obesity epidemic amongst our poor.

 

Capitalism has raised the standard of living so high, that being poor in America has gone from this:

 

To this:

 

It's not about total assets, it's about the standard of living, and our standard of living is absurdly high. When those we consider poor have as much as they do, it is not unhealthy, and any argument to the alternative is nothing more than jealousy.

 

This is the whole ball of wax right here. Shame on any educated person who is dumb enough to believe the political blather about the 'disappearing middle class' and the bogus poverty stats in America. 80-85% of this country is in the 'middle class' and every one of them knows 'where their next meal is coming from'.

[Chef Jim]

What, from people that think they have a clue and don't?

 

Yes. And not only do they not have a clue those bastards charge outrageously high fees on top of it.

 

 

 

This is the whole ball of wax right here. Shame on any educated person who is dumb enough to believe the political blather about the 'disappearing middle class' and the bogus poverty stats in America. 80-85% of this country is in the 'middle class' and every one of them knows 'where their next meal is coming from'.

 

Their next meal is the least of their worries. They not only know where their next meal is coming from but their next iPhone, tablet, car, and flat screen TV. What they don't lnow is where their retirement income is going to come from.

[TakeYouToTasker]

Funny, I throw reality onto your cute litte theory and get called names. Deep man, deep.

No, you threw out some stupid. Act stupid, and you get treated like you're stupid.

[Alaska Darin]

No, you threw out some stupid. Act stupid, and you get treated like you're stupid.

He's not acting...

 

What, from people that think they have a clue and don't?

/irony