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An interesting critique of the conservative view of poverty.

Arkady

President
Ever since Clinton left office (and before he came to office for a couple decades) poverty has been rising in America. The conservative tendency is to blame the poor, and by way of them, the government, for having created a dysfunctional culture among the poor. Essentially, the argument is that poor people are poor because they behave badly, and government support enables and even supports that bad behavior. But, among several problems with that argument, is the fact that the behavior of people has actually been improving, during this era of rising poverty:

http://noahpinionblog.blogspot.com/2015/03/americans-are-better-behaved-than-ever.html

This shouldn't come as a shock to anyone here, since we've posted about a lot of these trends. But, it runs so counter to the conservative narrative of moral decline that it bears repeating. Crime is actually way down, with murder rates being down to levels only seen in a half dozen years over the last century or more. When it comes to serious violent crime, we're living in an "Ozzie and Harriet" culture.

We have also hit an all-time record low for teen pregnancy. Dropout rates are also at an all-time low while college education continues to rise. And educational performance continues to rise, as measured by standardized tests, especially among minorities. Most forms of substance abuse have become less common, too, with a gigantic drop in smoking.

So, it's as if the poor and middle class are trying harder and harder to "play by the rules," and yet the game is increasingly stacked against them. Despite continually rising real GDP per capita (more wealth to go around), the cut taken by the rich just keeps growing, leaving more people to slip below the poverty line.
 

UPNYA2

Mayor
Ever since Clinton left office (and before he came to office for a couple decades) poverty has been rising in America. The conservative tendency is to blame the poor, and by way of them, the government, for having created a dysfunctional culture among the poor. Essentially, the argument is that poor people are poor because they behave badly, and government support enables and even supports that bad behavior. But, among several problems with that argument, is the fact that the behavior of people has actually been improving, during this era of rising poverty:

http://noahpinionblog.blogspot.com/2015/03/americans-are-better-behaved-than-ever.html

This shouldn't come as a shock to anyone here, since we've posted about a lot of these trends. But, it runs so counter to the conservative narrative of moral decline that it bears repeating. Crime is actually way down, with murder rates being down to levels only seen in a half dozen years over the last century or more. When it comes to serious violent crime, we're living in an "Ozzie and Harriet" culture.

We have also hit an all-time record low for teen pregnancy. Dropout rates are also at an all-time low while college education continues to rise. And educational performance continues to rise, as measured by standardized tests, especially among minorities. Most forms of substance abuse have become less common, too, with a gigantic drop in smoking.

So, it's as if the poor and middle class are trying harder and harder to "play by the rules," and yet the game is increasingly stacked against them. Despite continually rising real GDP per capita (more wealth to go around), the cut taken by the rich just keeps growing, leaving more people to slip below the poverty line.

That is an interesting observation.

So being you, as a, shall we agree, "non-conservative", somehow "know" that, "The conservative tendency is to blame the poor, and by way of them, the government, for having created a dysfunctional culture among the poor. Essentially, the argument is that poor people are poor because they behave badly, and government support enables and even supports that bad behavior.", would it be fair to assume that you also "know" what the liberal tendency to blame is as well?

If so would you care to share that also?

If not shall we have a "non-liberal" tell us what it is that liberals tend to blame for this?

Being poor people are indeed not behaving badly, being crime, substance abuse, smoking, teen pregnancy and dropout rates are all lower than ever, being educational performance continues to rise and government support does not enable or support any of those bad behaviors, what is the liberals tend to blame for this, "era of rising poverty"?
 

Arkady

President
would it be fair to assume that you also "know" what the liberal tendency to blame is as well?
Yes. I think liberals generally blame a "trickle up" economic system, where wealth tends to accumulate in the hands of fewer and fewer people over time, absent the kinds of major events that periodically disrupt that tendency. Thomas Piketty's brilliant book "Capital in the Twenty-First Century" deals with this extensively:

http://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century

Nobel Prize Winning economists Paul Krugman and Joseph Stiglitz have also written about those dynamics pretty extensively, as has former Labor Secretary Robert Reich. Where they tend to disagree with Piketty is about how realistic it is to think the government can disrupt that trickle-up process with policy changes like progressive taxation and social spending -- can we counter-balance the trickle-up tendency enough to create and maintain a decent distribution of wealth through everyday political policies, or does it really take crises like major wars and depressions to shuffle the deck?
 

connieb

Senator
Ever since Clinton left office (and before he came to office for a couple decades) poverty has been rising in America. The conservative tendency is to blame the poor, and by way of them, the government, for having created a dysfunctional culture among the poor. Essentially, the argument is that poor people are poor because they behave badly, and government support enables and even supports that bad behavior. But, among several problems with that argument, is the fact that the behavior of people has actually been improving, during this era of rising poverty:

http://noahpinionblog.blogspot.com/2015/03/americans-are-better-behaved-than-ever.html

This shouldn't come as a shock to anyone here, since we've posted about a lot of these trends. But, it runs so counter to the conservative narrative of moral decline that it bears repeating. Crime is actually way down, with murder rates being down to levels only seen in a half dozen years over the last century or more. When it comes to serious violent crime, we're living in an "Ozzie and Harriet" culture.

We have also hit an all-time record low for teen pregnancy. Dropout rates are also at an all-time low while college education continues to rise. And educational performance continues to rise, as measured by standardized tests, especially among minorities. Most forms of substance abuse have become less common, too, with a gigantic drop in smoking.

So, it's as if the poor and middle class are trying harder and harder to "play by the rules," and yet the game is increasingly stacked against them. Despite continually rising real GDP per capita (more wealth to go around), the cut taken by the rich just keeps growing, leaving more people to slip below the poverty line.

There is no evidence to suggest they are trying harder and harder to "play by the rules" there is only evidence that the bar has been lowered to accomodate more people. you know, that leveling the playing field you all like to do so much of.

Yes, we have fewer drop outs and more college admissions. But, what we have instead are laws, like in MD requiring HS attendance up till 18. We have 60% of first year college students - taking remedial classes. http://www.highereducation.org/reports/college_readiness/gap.shtml

We didn't make any improvement. We passed people through with a false sense of accomplishment. Our school systems are falling behind other countries and our students are less prepared when they enter college. Only in Lefty - move the yard stick land, does this equate to an "improvement".

Simply because teen pregnancy is down, doesn't mean that there isn't an increase in teens, especially young teens engagin in sexual intercourse. It only means they don't manage to get pregnant.
activty. http://www.advocatesforyouth.org/publications/publications-a-z/467-pregnancy-and-childbearing-among-younger-teens
Pregnancy is not the only risk factor with youth sexual activity. It is linked to a whole host of other problems from personality disorders to general inability to maintain fixed relationships. http://psychcentral.com/news/2012/10/18/timing-of-first-sex-has-far-reaching-relationship-effects/46256.html

We also know that the number of children being born out of wedlock has been increasing.
http://www.brookings.edu/research/papers/1996/08/childrenfamilies-akerlof
And, that being raised in a single parent household his the biggest risk factor for children growing up in poverty. https://www.census.gov/prod/3/97pubs/cb-9701.pdf

So, no, sorry, but I don't see where more people are playing by the rules. The rules are pretty clear and pretty simple. Work hard in school and get married and stay married to have a family. Doing those things, you will most likely avoid living in poverty. Working hard in school doesn't mean you managed to graduate or get aged out. It means actually doing enough work and learning enough that by the time you get to College you aren't taking remedial classes. And, we only know how many kids that go to college that effects.. how many are walking around with inferior HS educations who didn't try to go to college?

So, there is less violent crime? As we have discussed this could simply be because its less than reported, or that in general paying more people a subsistance level of subsidy has curbed their desire to get into crime... or perhaps we have simply managed to lock enough of them up we are safe from their mayhem. Regardless - it has no bearing on the two biggest factors that prevent poverty. Children being raised in a two parent household, and the education level of the parents. The TRUE education level. Not the 8th grade level students who finally leave HS after 12th grade.

Those are things that an individual has complete control over. And, yes, therefore, people who are only at a remedial level when they leave HS and who have children out of wedlock, have no one to blame but themselves when they are impoverished.

connie
 
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Arkady

President
So what's you're solution to this alleged problem?
I'm curious why you'd call it an alleged problem. I thought it was fairly universally acknowledged that poverty is a problem. But, I suppose, there are a handful of people who think that wealth makes going to heaven essentially impossible, so I guess from that perspective maybe poverty is a good thing. I don't subscribe to that outlook, though. I believe poverty is a negative and we should fight it.

Anyway, I've read some interesting back-and-forth between Piketty and Joseph Stiglitz, the Nobel Prize Winning economist who has done much of his work on income inequality. Stiglitz focuses on the role of land and monopolistic power. Piketty focusing his solutions on taxing capital. Stiglitz on higher minimum wages,enhancing unions, and trust-busting, but he also allows for redistributive tax policy.

My own views are still forming on this, but I like focusing on taxes. For starters, we shouldn't be privileging unearned income, by having lower effective tax rates on interest, dividends, inheritance, and capital gains than on money people actually earn through their own productive labor. Wipe out that distinction.

Then make the income tax code more progressive at the top end, like what we had in the mid-1960s, rather than the current system where you top dollar gets taxed the same whether your household earns half a million dollars in a year or half a billion dollars. Our current system is ridiculous -- why, if someone who earns $500,000 pays far more on his top dollar than someone who earns $50,000, should someone who earns $5 million or $50 million, or $500 million pay the exact same on his top dollar as if he'd earned $500,000? Why abandon the principle of progressing taxation once you get to that point in the ladder?

With the extra revenues from those more progressive taxes, I'd focus a bit on income support for the poor, and more than a bit on quality-of-life and environmental improvements. But, I'd also focus on education.... and not by way of throwing money at local districts, which is ridiculously wasteful, but instead by coming up with a more efficient national system of public education, right up through the college level. Make it so everyone, no matter how poor his birth circumstances, has a good shot of arriving at the start of his career with a really solid education under his belt. I wouldn't dictate the end result of the race, but I'd want to make sure it was a fair race with everyone starting off in a fairly similar position.
 
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Arkady

President
And, more importantly, why did it get so much worse under Obama?
As you'll recall, the poverty rate was shooting up rapidly in 2008, 2009, and 2010, as a result of the financial meltdown. But it has been falling since then. In 2013, it was six-tenths of a point lower than in 2010, and all reasonable expectations are that it fell still further in 2014 (given the big rise in employment in 2014). I doubt we're yet back to where we were pre-financial-meltdown, much less where we were before GW Bush began his reign of error, but at least we're moving in the right direction.
 

Arkady

President
There is no evidence to suggest they are trying harder and harder to "play by the rules" there is only evidence that the bar has been lowered to accomodate more people. you know, that leveling the playing field you all like to do so much of.
Take another look at the stats, if you don't believe me. Murder rates are down dramatically. That isn't because we lowered the bar to say more killings aren't murder. Teen pregnancy rates are down. That isn't because we lowered the bar in defining what is a pregnancy or what is a teen. Smoking rates are down, but that's not because we lowered the bar about what is a cigarette. It's because behaviors actually improved.

As for the drop-out rate, it's a right-wing myth that it has only come down because we've lowered our standards. We have long-term results from the NAEP tests to confirm that's not the case. Among every ethnic group, performance on the tests has risen -- with the biggest rises being among blacks and hispanics:


And that isn't due to some gaming of that particular test. The results are echoed across a wide array of cognitive and academic achievement tests over that same period, from IQ tests to Wonderlic scores of NFL draftees.

Take a look at that chart, above, and think about what it means, in light of falling drop-out rates. The only people who take the NAEP test are those who are in school. So, the larger your dropout rate, the greater the share of your worst students aren't even factoring into the test results. That makes it quite difficult to raise NAEP scores over time, with dropout rates falling, since every year you're testing a relatively less elite sub-set of all 17-year-olds (e.g., you may be testing the top 75% of 17-year-olds, rather than just the top 65%). Yet, even with the disadvantage of factoring all those extra people who would have been dropouts in a different era, we STILL have rising NAEP scores!

We didn't make any improvement.
I understand why, as a conservative, that assertion would have an emotional appeal for you. Conservatives are comforted by the notion that things used to be better, and are made uncomfortable with the progressive idea that things generally get better over time. But the stats are what they are. When it comes to crime, substance use, test scores, dropout rates, teen pregnancy rates, etc., people are doing better today than in earlier decades.

Simply because teen pregnancy is down, doesn't mean that there isn't an increase in teens, especially young teens engagin in sexual intercourse. It only means they don't manage to get pregnant.
If teens are having more sex yet still having fewer pregnancies (and contracting diseases less often), that's doubly good, and suggests they're being much more careful about prophylactic use.

Pregnancy is not the only risk factor with youth sexual activity. It is linked to a whole host of other problems from personality disorders to general inability to maintain fixed relationships.
We can measure the ability to maintain fixed relationships more directly, and it shows improvement, too:



So, there is less violent crime? As we have discussed this could simply be because its less than reported, or that in general paying more people a subsistance level of subsidy has curbed their desire to get into crime... or perhaps we have simply managed to lock enough of them up we are safe from their mayhem.
If we were talking only about lesser violent crimes, we could speculate about under-reporting. But dead bodies are hard to hide, so when you have a MASSIVE reduction in murder rates, it's very unlikely it's because under-reporting has increased. The explanation about locking them up is unlikely, too, since the incarceration rate spiked massively in the Reagan/Bush years, leading up to the highest violent-crime rate in our nations history, whereas the incarceration rate has been falling pretty dramatically in recent years, even as the violent crime rate has plunged:


As for the idea that providing a subsistence income curbs the desire to get into crime, if true that would be a huge point in favor of increasing those subsidies and seeing if it keeps making crime drop.
 
Ark - the link at the bottom says it all - and it contradicts you.

the "1%" pay twice as much (as a share of taxes) as they did in 1980. They now pay 20% of all taxes in america. The top 10% of earners now pay about 70% of all taxes. the share of taxes paid by the rich has been escalating dramatically, despite what your hilarious "blogger" thinks. We've never had a more "progressive" tax system in the history of the nation.

http://www.heritage.org/federalbudget/top10-percent-income-earners

additionally, US corporate taxes are "the highest in the developed world" (see link below) approximately double that of england. Only Japan even comes close - but not THAT close . . .

http://www.heritage.org/federalbudget/corporate-tax-rate
 

connieb

Senator
Take another look at the stats, if you don't believe me. Murder rates are down dramatically. That isn't because we lowered the bar to say more killings aren't murder. Teen pregnancy rates are down. That isn't because we lowered the bar in defining what is a pregnancy or what is a teen. Smoking rates are down, but that's not because we lowered the bar about what is a cigarette. It's because behaviors actually improved.

As for the drop-out rate, it's a right-wing myth that it has only come down because we've lowered our standards. We have long-term results from the NAEP tests to confirm that's not the case. Among every ethnic group, performance on the tests has risen -- with the biggest rises being among blacks and hispanics:


And that isn't due to some gaming of that particular test. The results are echoed across a wide array of cognitive and academic achievement tests over that same period, from IQ tests to Wonderlic scores of NFL draftees.

Take a look at that chart, above, and think about what it means, in light of falling drop-out rates. The only people who take the NAEP test are those who are in school. So, the larger your dropout rate, the greater the share of your worst students aren't even factoring into the test results. That makes it quite difficult to raise NAEP scores over time, with dropout rates falling, since every year you're testing a relatively less elite sub-set of all 17-year-olds (e.g., you may be testing the top 75% of 17-year-olds, rather than just the top 65%). Yet, even with the disadvantage of factoring all those extra people who would have been dropouts in a different era, we STILL have rising NAEP scores!



I understand why, as a conservative, that assertion would have an emotional appeal for you. Conservatives are comforted by the notion that things used to be better, and are made uncomfortable with the progressive idea that things generally get better over time. But the stats are what they are. When it comes to crime, substance use, test scores, dropout rates, teen pregnancy rates, etc., people are doing better today than in earlier decades.



If teens are having more sex yet still having fewer pregnancies (and contracting diseases less often), that's doubly good, and suggests they're being much more careful about prophylactic use.



We can measure the ability to maintain fixed relationships more directly, and it shows improvement, too:





If we were talking only about lesser violent crimes, we could speculate about under-reporting. But dead bodies are hard to hide, so when you have a MASSIVE reduction in murder rates, it's very unlikely it's because under-reporting has increased. The explanation about locking them up is unlikely, too, since the incarceration rate spiked massively in the Reagan/Bush years, leading up to the highest violent-crime rate in our nations history, whereas the incarceration rate has been falling pretty dramatically in recent years, even as the violent crime rate has plunged:


As for the idea that providing a subsistence income curbs the desire to get into crime, if true that would be a huge point in favor of increasing those subsidies and seeing if it keeps making crime drop.
Teen pregnancy is down - because we have access to contraceptives. NOT because we don't have teens having sex. the having sex is the behavior. The pregnancy is a possible result. And, we have falling drop out rates. SO WHAT - there is other evidence to prove that they may not drop out - but they aren't learning a hell of a lot either. So the NAEP tests have gone up. Which just proves we are perfecting teaching to the test and not teaching what people actually know.. you know - to not have to take remedial classes in College.

The divorce rate is meaningless - if people don't bother to get married in the first place. That doesn't mean more people are in long term fixed relationships. That just means those that bother to get married STAY married. The fact that out of wedlock births have increased dramatically, and that a large percentage of children live in single parent households - proves that there is a dearth of stable family relationships for children.

And, sure if subsitence curbs crime that may be a success. I woudl want to see a much more thorough analyssis before I throw any more money at it as well as a cost benefit analsys. If we won't see any better result s- no sense in wasting more money on it.

I am certainly not waxing poetic about times gone by. But, as I said before, the secret to success is not so secret. Work hard in school and keep your damn pants on. Two things, that are within anyone's power to control. Nothing in all your graphs refutes any of that.

connie
 

Arkady

President
Ark - the link at the bottom says it all - and it contradicts you.

the "1%" pay twice as much (as a share of taxes) as they did in 1980
You aren't thinking clearly. The relevant question isn't what percentage of total federal income taxes they pay, but rather what their effective rate of taxation is. The former number is largely just a function of how much their wealth increases.

To illustrate the concept in the simplest way possible, consider a society consisting of only two people: a rich person and a poor person. In Scenario A, the rich person earns $100,000 and the poor one earns $20,000. In Scenario B, the rich person earns $1 million, and the poor one earns $15,000. In Scenario A, let's say the rich person pays 50% effective tax rate and the poor one pays 10%, whereas in Scenario B the rich and poor both pay 20% effective rates. In Scenario A, the rich person pays 96.2% of taxes, whereas in Scenario B he pays 98.5%. Despite the second scenario involving a flat tax, where the first one involved a highly progressive tax, the controlling factor was just how rich the rich guy in Scenario B was.

We've never had a more "progressive" tax system in the history of the nation.
Hopefully you've now spotted your absurd basic misunderstanding of math, and can avoid similar errors in the future.

additionally, US corporate taxes are "the highest in the developed world"
Incorrect. The Heritage Foundation is used to their readers being complete imbeciles, so they probably figure they'll get away with such patently ridiculous propaganda. But anyone with even a remote familiarity with the facts will realize they're just quoting nominal tax rates, rather than effective tax rates. Thanks to loopholes, write-offs, etc., US effective corporate tax rates are actually below the trade-weighted OECD average. By all means, I'd support lowering our nominal rates and closing loopholes. But we should do more loophole-closing than rate-lowering, or we'll have our effective corporate tax rates fall even shorter of the trade-weighted OECD average.



As you'll see, we're at 27.1%, effective, compared to the GDP-weighted average from the ex-US OECD of 27.7%. In effective terms, American corporations pay lower taxes than is usual in the rest of the OECD. The only way to ignore that is to report on nominal, instead of effective taxes, or to use unweighted averages (which allows tiny, tax-haven countries to factor into the average as much as vastly larger economies, resulting in a deceptively low average).
 
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PhilFish

Administrator
Staff member
You aren't thinking clearly. The relevant question isn't what percentage of total federal income taxes they pay, but rather what their effective rate of taxation is. The former number is largely just a function of how much their wealth increases.

To illustrate the concept in the simplest way possible, consider a society consisting of only two people: a rich person and a poor person. In Scenario A, the rich person earns $100,000 and the poor one earns $20,000. In Scenario B, the rich person earns $1 million, and the poor one earns $15,000. In Scenario A, let's say the rich person pays 50% effective tax rate and the poor one pays 10%, whereas in Scenario B the rich and poor both pay 20% effective rates. In Scenario A, the rich person pays 96.2% of taxes, whereas in Scenario B he pays 98.5%. Despite the second scenario involving a flat tax, where the first one involved a highly progressive tax, the controlling factor was just how rich the rich guy in Scenario B was.



Hopefully you've now spotted your absurd basic misunderstanding of math, and can avoid similar errors in the future.



Incorrect. The Heritage Foundation is used to their readers being complete imbeciles, to they probably figure they'll get away with such patently ridiculous propaganda. But anyone with even a remote familiarity with the facts will realize they're just quoting nominal tax rates, rather than effective tax rates. Thanks to loopholes, write-offs, etc., US effective corporate tax rates are actually below the trade-weighted OECD average. By all means, I'd support lowering our nominal rates and closing loopholes. But we should do more loophole-closing than rate-lowering, or we'll have our effective corporate tax rates fall even shorter of the trade-weighted OECD average.



As you'll see, we're at 27.1%, effective, compared to the GDP-weighted average from the ex-US OECD of 27.7%. In effective terms, American corporations pay lower taxes than is usual in the rest of the OECD. The only way to ignore that is to report on nominal, instead of effective taxes, or to use unweighted averages (which allows tiny, tax-haven countries to factor into the average as much as vastly larger economies, resulting in a deceptively low average).

in the end analysis isnt the gist that rather than paying the lions share (today) it is desired to have the wealthiest pay pretty much the entirety...

?
 

Arkady

President
in the end analysis isnt the gist that rather than paying the lions share (today) it is desired to have the wealthiest pay pretty much the entirety...

?
If the policy changes were done properly, the share of income taxes paid by the rich might actually decline, simply by shifting the amount of income around. This is harder to illustrate than the microcosm example I gave, but perhaps you can picture it.

Picture a two-person society, as discussed above, where one person starts with $20,000 of income and the other with $100,000 and each pays 20% tax. Only now, picture that each person invests half the after-tax money he earns after the first $15,000 (which he needs to cover basic living expenses), and the investment earns 5% per year. For simplicity, ignore any other changes to income, aside from that investment income. In year one, the rich guy will pay 83.3% of taxes. In year twenty, he'll pay 87.1% of all taxes, because his income will have risen more than the poor guy's (thanks to having a higher share of his total income as disposable income to invest). The farther out you extend the data series, the higher his share of the tax burden becomes. Extend it far enough forward (to suggest the function of a society that devolves into an aristocracy of inherited money), and you wind up with the rich one paying essentially all taxes.... because he has essentially all the money.

Now, imagine the exact same set-up, only now the rich guy pays 62% of his income as taxes and the poor guy pays 5%. In year one, the rich guy will pay 98.4% of taxes. But in year 20, he'll still pay the same 98.4%. And the same in 100 or 200 years.

How is that possible? Well, basically, the progressive tax will have allowed the poor person's income to advance at the same rate as the rich person's. At the end of 20 years, the poor person will be earning 12.6% more than he started at and the rich person will be earning the exact same 12.6% more than he started with, keeping incomes proportional, and therefore tax burdens proportional, over time. In essence, the progressive tax system will have countered the "trickle up" tendency that comes from being able to make money from money.

Obviously, that's super over-simplified, but the point was simply to suggest the way that a progressive tax system needn't be aimed at having the rich pay an ever-greater portion of taxes, but instead could be aimed at creating a more stable distribution of income throughout the society, which would actually create a stable distribution of tax burden.
 

RickWA

Snagglesooth
If the policy changes were done properly, the share of income taxes paid by the rich might actually decline, simply by shifting the amount of income around. This is harder to illustrate than the microcosm example I gave, but perhaps you can picture it.

Picture a two-person society, as discussed above, where one person starts with $20,000 of income and the other with $100,000 and each pays 20% tax. Only now, picture that each person invests half the after-tax money he earns after the first $15,000 (which he needs to cover basic living expenses), and the investment earns 5% per year. For simplicity, ignore any other changes to income, aside from that investment income. In year one, the rich guy will pay 83.3% of taxes. In year twenty, he'll pay 87.1% of all taxes, because his income will have risen more than the poor guy's (thanks to having a higher share of his total income as disposable income to invest). The farther out you extend the data series, the higher his share of the tax burden becomes. Extend it far enough forward (to suggest the function of a society that devolves into an aristocracy of inherited money), and you wind up with the rich one paying essentially all taxes.... because he has essentially all the money.

Now, imagine the exact same set-up, only now the rich guy pays 62% of his income as taxes and the poor guy pays 5%. In year one, the rich guy will pay 98.4% of taxes. But in year 20, he'll still pay the same 98.4%. And the same in 100 or 200 years.

How is that possible? Well, basically, the progressive tax will have allowed the poor person's income to advance at the same rate as the rich person's. At the end of 20 years, the poor person will be earning 12.6% more than he started at and the rich person will be earning the exact same 12.6% more than he started with, keeping incomes proportional, and therefore tax burdens proportional, over time. In essence, the progressive tax system will have countered the "trickle up" tendency that comes from being able to make money from money.

Obviously, that's super over-simplified, but the point was simply to suggest the way that a progressive tax system needn't be aimed at having the rich pay an ever-greater portion of taxes, but instead could be aimed at creating a more stable distribution of income throughout the society, which would actually create a stable distribution of tax burden.
This post of yours, in particular, needs to be moved to the "Religion" forum. Talk about faith-based...
 

UPNYA2

Mayor
If the policy changes were done properly, the share of income taxes paid by the rich might actually decline, simply by shifting the amount of income around. This is harder to illustrate than the microcosm example I gave, but perhaps you can picture it.

Picture a two-person society, as discussed above, where one person starts with $20,000 of income and the other with $100,000 and each pays 20% tax. Only now, picture that each person invests half the after-tax money he earns after the first $15,000 (which he needs to cover basic living expenses), and the investment earns 5% per year. For simplicity, ignore any other changes to income, aside from that investment income. In year one, the rich guy will pay 83.3% of taxes. In year twenty, he'll pay 87.1% of all taxes, because his income will have risen more than the poor guy's (thanks to having a higher share of his total income as disposable income to invest). The farther out you extend the data series, the higher his share of the tax burden becomes. Extend it far enough forward (to suggest the function of a society that devolves into an aristocracy of inherited money), and you wind up with the rich one paying essentially all taxes.... because he has essentially all the money.

Now, imagine the exact same set-up, only now the rich guy pays 62% of his income as taxes and the poor guy pays 5%. In year one, the rich guy will pay 98.4% of taxes. But in year 20, he'll still pay the same 98.4%. And the same in 100 or 200 years.

How is that possible? Well, basically, the progressive tax will have allowed the poor person's income to advance at the same rate as the rich person's. At the end of 20 years, the poor person will be earning 12.6% more than he started at and the rich person will be earning the exact same 12.6% more than he started with, keeping incomes proportional, and therefore tax burdens proportional, over time. In essence, the progressive tax system will have countered the "trickle up" tendency that comes from being able to make money from money.

Obviously, that's super over-simplified, but the point was simply to suggest the way that a progressive tax system needn't be aimed at having the rich pay an ever-greater portion of taxes, but instead could be aimed at creating a more stable distribution of income throughout the society, which would actually create a stable distribution of tax burden.
Sooooooooooooooo.................

Exactly what is it that you have read or heard about that has you convinced that one of the duties of the US government is, or even should be, "keeping incomes proportional", anyway?

Exactly what is it that you have read or heard about that has you convinced that one of the duties of the US government is, or even should be, "creating a more stable distribution of income throughout the society"?


Now I understand how people with these, "everyone needs to be more alike", "some need to "share" more of what they have because "some" don't have as much", attitudes do so hate to be mentioned with the word socialism, but how IS this different from that whole, "to each according to his needs, from each according to his ability" attitude both seem to share?
 

RickWA

Snagglesooth
Sooooooooooooooo.................

Exactly what is it that you have read or heard about that has you convinced that one of the duties of the US government is, or even should be, "keeping incomes proportional", anyway?

Exactly what is it that you have read or heard about that has you convinced that one of the duties of the US government is, or even should be, "creating a more stable distribution of income throughout the society"?
Most likely...Das Kapital - or a modern Krugmanian derivative thereof.
 

JuliefromOhio

President
Supporting Member
This post of yours, in particular, needs to be moved to the "Religion" forum. Talk about faith-based...
since you know religious stuff, how about the prosperity gospel preached in conservative, fundamentalist Christian churches suggesting that God rewards the good people, with the implication that the poor are poor because they're not good enough?
 
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