America's Wealth Gap -- No. 39 in the World
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Ben 2 World
(ben2world) - MLife

Locale: So Cal
America's Wealth Gap -- No. 39 in the World on 10/14/2011 11:35:00 MDT Print View

The CIA World Fact Book includes a ranking of countries by income distribution inequality -- using the GINI index (the lower the number, the smaller the gap between rich and poor). Sadly, the US ranks #39 in top inequality -- out of 136 countries!

Yes, we would expect countries like Finland and Germany to have a narrower "wealth gap" than us, but look at these countries that also have narrower wealth gaps than the US:

Iran
Cambodia
Nigeria
Nicaragua
Russia
China
India

We ought to be concerned! I suppose we can do one of two things:

1. Tax the rich to correct this gap but risk eroding the incentives to really work smart and get ahead... or

2. Leave the incentives but overhaul our education system so all can start from the same starting line.

I much prefer #2 -- with one caveat: we should increase our estate tax. I have no problems with a 'lifetime inequality' -- you made it, then you enjoy it. But a bulk of your accumulation should be plowed back to society when you expire. Why?

1. We don't want an entrenched class of rich dynasties.

2. We want to give each generation some incentive to "sink or swim".

Maybe we as a nation can channel our "anger" into something productive. Your thoughts?

Source: CIA

Edited by ben2world on 10/14/2011 11:44:26 MDT.

John S.
(jshann) - F
Re: America's Wealth Gap -- No. 39 in the World on 10/14/2011 11:40:02 MDT Print View

Chaff.

Edited by jshann on 10/14/2011 16:51:45 MDT.

Ben 2 World
(ben2world) - MLife

Locale: So Cal
Re: America's Wealth Gap -- No. 39 in the World on 10/14/2011 11:48:15 MDT Print View

"Wide gaps are created by overdone welfare programs that give the lazy no incentive to be productive."

That explains it? Then how do you account for the much narrower gaps found in Scandinavian countries, or Canada, etc. that seem to have much more comprehensive and generous social programs? You think there might be more than one factor at play here?

Thinking more about the gap... I think my sentiment is that a wide gap per se is not automatically "bad" -- within reason -- so long as each of us gets a truly fair shot at 'making it'.

Edited by ben2world on 10/14/2011 12:09:31 MDT.

j lan
(justaddfuel) - F

Locale: MN
Re: Re: America's Wealth Gap -- No. 39 in the World on 10/14/2011 15:20:37 MDT Print View

John, you should take a look at all the government has done for you in your life before you make those kind of statements.

Edited by justaddfuel on 10/14/2011 15:56:43 MDT.

Nick Gatel
(ngatel) - MLife

Locale: Southern California
Re: Re: Re: America's Wealth Gap -- No. 39 in the World on 10/14/2011 15:43:04 MDT Print View

As much as I hate welfare and social programs, they are not the single root cause of the problem. Many Americans feel there will be a job for them, they do not need to enhance their skills and knowledge; and that somehow their retirement financial needs will be met by SSN and Medicare programs. There are amany poorer people who are moral, ethical, and extremely hard workers. Unfortunately many have a false sense of security and have not worked smart enough to build surplus wealth for that "rainy day." Add their use of easy credit and too much debt, the gap widens. All the money that poorer people spend of debt interest could have been used to invest in savings or other vehicles. To me it is a problem of education and too much trust in the government.

Ben Crocker
(alexdrewreed) - M

Locale: Kentucky
Estate tax on 10/14/2011 15:47:58 MDT Print View

I'm with you Ben. I can see no justification for rolling back the estate tax. If there is ever anyone who it doesn't hurt to tax, its the dead guy who no longer needs the money. Its also hard to feel too bad for the trustafarian who might get a little smaller trust fund. Of course all of us want no taxes, but we have to tax somebody.
I'm with you on education too, but I don't think we can afford to do it unless we take taxes on the rich back to where they were pre-Bush. Right now, I pay a much higher tax rate than Warren Buffet. That still chaps me.

Nick Gatel
(ngatel) - MLife

Locale: Southern California
Re: Estate tax on 10/14/2011 15:56:33 MDT Print View

"I can see no justification for rolling back the estate tax. If there is ever anyone who it doesn't hurt to tax, its the dead guy who no longer needs the money."

If someone works hard to save their money with the intent to give it away, what moral justification is there to steal it?

Why do we have to tax anyone? Just charge each person for what they get from government.

Ben Crocker
(alexdrewreed) - M

Locale: Kentucky
Taxation on 10/14/2011 16:12:42 MDT Print View

If we work under the assumption that we don't have to tax anyone, then I would agree we need no estate tax. That's just a bizarre assumption for a starting point.

And I would love to see a system where people paid for what they got out of the government. By its nature, its impossible to value. And its not consistent with the role of government in a civilized society.

Ben 2 World
(ben2world) - MLife

Locale: So Cal
Re: Estate tax on 10/14/2011 17:53:49 MDT Print View

Nick:

Not saying there is only one right view, but my own bias:

I view "ownership" more in the light of custodianship. So long as individuals bind themselves together to enjoy the benefits of group living, there will have to be some balancing between individual rights versus the good of all. For me, I like giving a person the right to enjoy the fruits of his or her labor/wits -- for life -- to spend, invest, give away as he / she sees fit.

But it is also a reality that essentially no individual creates or succeeds entirely on his or her own. Surely the Rockefellers, Fords, Edisons and Steve Jobs of the world would concede as much? Why, even the most individualistic of efforts -- such as the authorship of great literary works -- are only granted a copyright of 70 years -- or one lifetime!

A compromise of sometimes competing principles aside, it is quite apparent that humans being humans, the passing down of family wealth can have a corrosive effect on the work ethics of the succeeding generations -- to their detriment as well as the detriment of the common good.

Finally, re. a wholesale change from general taxation to pure user-based fees -- that will work for projects with close "cost benefit" relationship -- like trail parking; but will not work for others such as defense or national transportation -- where benefit of the whole may far exceed the sum of individual benefits.

John S.
(jshann) - F
Re: Re: Estate tax on 10/14/2011 18:26:02 MDT Print View

As soon as we get rid of this liberal regime in 2012, we will be on the right track.

Travis Leanna
(T.L.) - MLife

Locale: Wisconsin
Re: Re: Estate tax on 10/14/2011 18:49:42 MDT Print View

Nick, you and I are an odd dichotomy. :)

There are things we agree upon, and things we don't. The odd part is that the things we agree or disagree on are usually things that people are usually VERY divided about: i.e., politics, finances, morality.


>If someone works hard to save their money with the intent to give it away, what moral justification is there to steal it?

I agree! Just because I die, the government gets a huge portion? WHY? Its a tax on dying. They tax everything now.

Jesse Glover
(hellbillylarry) - F

Locale: southern appalachians
Re: America's Wealth Gap -- No. 39 in the World on 10/14/2011 19:03:03 MDT Print View

The only thing that taxing the rich or increasing the death tax will do is cause your rich dynasties to go somewhere else.

This will narrow the wealth gap because there will be more poor people and less rich people.

America is not a socialist country. We have our problems it's true but higher taxes on the "rich" (200k a year in obama's definition) is not the answer. I think that we should stop spending so much on BS,

Nick Gatel
(ngatel) - MLife

Locale: Southern California
Re: Re: Estate tax on 10/14/2011 19:33:30 MDT Print View

Hi Ben,

My bias :)

Henry Ford is a great example. He did not invent the automobile. But he came up with a method to manufacture them inexpensively. Over several decades he created jobs for millions of people (are you listening Congress?). His vision shortened work days and raised the standard of living. He paid assembly line workers more money than his competitors, more money than union scale, provided his employees with a higher standard of living, provided his employees the means to purchase goods that were not available to them in the past; such as those made by Westinghouse, his good friend Thomas Edison, and many others. Ford also provided the mechanism for many other businesses to be created such as Ford suppliers, thousands of Ford Dealers, service stations, independent garages, after sales part makers and parts stores, insurance companies, etc., etc. Ford did this. Without Ford a lot of people would not have the opportunity to live a better life. And because it happened in America, he was able to pass his wealth and the company to generations of Fords. He also trained all his employees. Even today, Ford Motor Company spends millions and millions of dollars each year training and educating Ford employees. They provide tuition reimbursement to Ford employees who wish to continue their education, in addition to many other benefits. Henry Ford did this. Without him, millions would have been worse off. And he did it for only one reason... to make money.

Copyrights are man-made. They are immoral. They take property away from those who created them. The author should be able to do whatever they want with their property. It is theirs. Actually they can pass the rights on to others. The only time a copyrighted material should go into the public domain is if the owner dies intestate.

National defense should be paid equally by each American citizen. Each citizen gets the same benefit, assuming we do not use our military for something besides protecting our borders from foreign invaders. National transportation should be private, or if run by the government be funded only by those who use it.

;)

Nick Gatel
(ngatel) - MLife

Locale: Southern California
Re: Re: Re: Estate tax on 10/14/2011 19:36:29 MDT Print View

"As soon as we get rid of this liberal regime in 2012, we will be on the right track."

I don't think so. We need an educated populace that can think for themselves. We also need a philosophy that is aligned to the principles set forth in the Declaration of Independence. There is no political party that has the philosophy or principles.

Ben 2 World
(ben2world) - MLife

Locale: So Cal
Re: Estate tax on 10/14/2011 19:55:17 MDT Print View

"Copyrights are man-made. They are immoral."

Unfortunately, that's a distinctly minority view... But don't automatically take that as a slight. I too hold dear to some views that are distinctly in the minority. We can't all have our ways. :)

Edited by ben2world on 10/14/2011 19:56:59 MDT.

BER ---
(BER) - MLife

Locale: Wisconsin
wealth gap on 10/14/2011 19:57:24 MDT Print View

I really should not enter this conversation...


But,

I chose to study hard in school and get good grades.
I chose to work to put myself through college.
I chose to take out 160K of medical school debt(and have paid it off).
I chose to work 120 hours per week for 4 years for residency training making <$35K/yr.
I chose to work in a specialty where the government mandates that I see anyone who walks in the door regardless of of the complaint even though the sign above the door says "Emergency".
I chose my work setting knowing that fully 25% of patients in my community choose not pay anything for the service I provide and another 25% allow me and every other tax payer in the state to cover their costs.

I choose to pay all of my bills, plan for the future, set aside for life's adversity, and make a good home for my children. I choose to pay my taxes and have no issue with the idea of taxes as a way of paying for the expense of the services that the government supplies.

I live fairly modestly and do not believe I use more of these "government services" than the average person. Yet I get to pay more for those services??? I'm certainly not an economist, but the idea of a flat income tax(%) would seem more fair.

I agree with Ben that college or some other form of post high-school training should be accessible to any/all that choose to go.

I disagree that those who chose to become productive should have to provide for those able bodies that choose not to be. Those individuals that are truly disabled, I have no problems with. (But let's define disabled a bit better than we do now.)

And as far as the estate tax, why should my concern for my children and plans to provide for them be taken away when I die?

Edited by BER on 10/14/2011 20:38:18 MDT.

Nick Gatel
(ngatel) - MLife

Locale: Southern California
Re: Re: Estate tax on 10/14/2011 20:00:23 MDT Print View

We can't all have our ways. :)

No, but at least many of us live in countries where we can challenge and debate ideas. That is a good thing.

Ben 2 World
(ben2world) - MLife

Locale: So Cal
Re: wealth gap on 10/14/2011 20:01:07 MDT Print View

Brian:

You just might like Herman Cain and his 9--9-9 Plan!

BER ---
(BER) - MLife

Locale: Wisconsin
9-9-9 on 10/14/2011 20:07:22 MDT Print View

Ben,
Truthfully this is the first I have heard of the man.
While those numbers sound good to me, I'm not sure if they are realistic, or fair. Again, not an economist. But it seems like that 9% sales tax would be pretty heavy on some if it included essentials like food and clothing.

Edited by BER on 10/14/2011 20:19:04 MDT.

James Klein
(jnklein21) - M

Locale: Southeast
Re: wealth gap on 10/14/2011 21:03:27 MDT Print View

Brian,

I can certainly relate to most of your post. As someone from a proud but poorish family, I was able to work my way into a very stable lifestly w/ only a few years of very hard work (nothing epic though). I truly don't feel like luck got me to where I am or that I am unique in my skill set.

Its very hard to generalize this gap to a single problem or two but many of those I see/know that would populate the low side of this wealth gap seem to be there (IMHO) b/c of:
1) They feel like they are owed something for being in a tough place (ie the govt should take care of me)
2) Poor career planning (ie job x pays $y w/out factoring supply vs demand of said job, or the grand "well I have to do something I love").

I honestly could care less about some wealth gap metric -- show me one normalized for continuous effort and I may begin to feel a little worse for being on the posive side of this gap. Better yet show me a chart that %chance of being wealthy of divided by effort and we'd have something to talk about.

From my point of view, this is a country in which it is very hard not to survive in -- can we say that about most of the counrties "above" the USA?