We’ve Been Measuring Inequality Wrong

[jem]

Luckily the authors wrote this as if they knew what people like you were going to write.
So they try their best to disabuse your ability to distort what they found.
They gave you are road sign... "Facing Fiscal Facts..."

Read this...
Underlined and bolded by me for those not use to reading true economic concepts or reality.


"Facing fiscal facts
Facts and figures are hard things. They upset prior views and demand attention.

The facts revealed in our study should change views. Inequality, properly measured, is extremely high, but is far lower than generally believed. The reason is that our fiscal system, properly measured, is highly progressive. And, via our high marginal taxes, we are providing significant incentives to Americans to work less and earn less than they might otherwise."
=====

By the way bringing in millions of immigrants to drive wages down and then forcing a lift in minimum wage is just about the most destructive thing you can do to american workers and their futures. You condemn more and more them to poverty and the welfare plantation.

its leftist economic terrorism.

Well, somehow I got half a post off. As I was attempting to explain, I am in agreement with this paper. But I would point out that we can make the most progress toward correcting the present flaws by raising wages at the bottom end so that wages once again compete with benefits and taxes. This study quantifies what economists have long realized, viz, the wealthy spend a much lower portion of their income than the middle class even after counting benefits as income. This is why Demand side stimulus is so much more effective than supply side stimulus. What is clear is that we must raise wages at the low end if we want to create a work incentive. As the article correctly points out, at the low wage end by the time you subtract payroll taxes and add in benefits there is little incentive to work.

 

[piezoe]

Luckily the authors wrote this as if they knew what people like you were going to write.
So they try their best to disabuse your ability to distort what they found.
They gave you are road sign... "Facing Fiscal Facts..."

Read this...
Underlined and bolded by me for those not use to reading true economic concepts or reality.


"Facing fiscal facts
Facts and figures are hard things. They upset prior views and demand attention.

The facts revealed in our study should change views. Inequality, properly measured, is extremely high, but is far lower than generally believed. The reason is that our fiscal system, properly measured, is highly progressive. And, via our high marginal taxes, we are providing significant incentives to Americans to work less and earn less than they might otherwise."
=====

By the way bringing in millions of immigrants to drive wages down and then forcing a lift in minimum wage is just about the most destructive thing you can do to american workers and their futures. You condemn more and more them to poverty and the welfare plantation.

its leftist economic terrorism.

I have posted elsewhere on the disincentives to work. I don't want to repeat what I wrote, but I my provide a link later if you care to read it. I will very briefly hit the main point. The disincentives can be addressed by reducing taxes, reducing benefits, increasing wages, or some combination of these actions. However, none of these things that could be done is without repercussions elsewhere in the economy. I have argued that there is incontrovertible evidence that wages are to low rather than benefits being too high. Taxes are to low based on spending. If you want to lower taxes you must find the fiscal leaks that can be plugged without serious damage . A second requirement is that any leaks identified must produce significant savings rather than trivial ones. This greatly limits options. Entitlements are off budget and therefore have to be handled as an independent issue separate and apart from the general budget. Entitlements affect payroll taxes which are a big part of the work disencentive.

When one considers all the ramifications and constraints it is quite clear that by far the best way to increase incentives to work is to raise wages!

 

[Scataphagos]

The reason is that our fiscal system, properly measured, is highly progressive. And, via our high marginal taxes, we are providing significant incentives to Americans to work less and earn less than they might otherwise."

Classic example.... Last weekend, wifey, a pediatric surgeon... spent 34 hours at the hospital while on call. Just the weekend!

This weekend, we prepared our income taxes for 2015. She basically said, "FUCK IT... I'm not going to bust my ass and have the government take >50% from my effort".

Now working on the plan to (1) not take call, (2) cut back hours to minimum to maintain health insurance coverage through the hospital. Yeah, it will cost us some money. But will be replaced with less stressful work and more free time. Yet the Progressive solution to every problem always includes "more taxes".

Our progressive tax policy punishes many and discourages them from producing and achieving what they are capable of. She spent 12 years in advanced education and training (post high school) to learn the skills she employs today. Yet thanks to government greed via punitive taxation, she's deciding to not work to her full potential. Personally, can't blame her.

Heck, I abandoned my investment advisory business 15 years ago because I was tired of getting hosed on Social Security Taxes. (I'm not one of those who "contributed $100, but received $500,000 in benefits". I'm on the other end. Even quitting when I did, I calculated I'd need to live to be 113 to break even... not including the buying power loss through currency debasement and inflation, of course. And if I'd kept contributing to SS, it would have only gotten worse.)

FWIW...

 

[piezoe]

You my have noticed that there is a surprisingly large fraction of the US adult population that are attracted to a very simple solution to an assortment of very complex problems. Their solution is to reduce the size of government, but of course no details are ever forthcoming. Just reduce the size of government. That's it! It is perhaps not coincidental that many of those whose thinking runs along this line are also giving to various conspiracy theories and beliefs that run counter to facts. These folks, though they are adults, essentially think as a child might. They must be taken by the hand and reassured that the boogeyman is not going to jump out from under the bed.

 

[Scataphagos]

The entire argument about "income equality" is BS. Just a flaming point for politicos to garner votes.

The MAJOR reasons for "income equality" are because there are MAJOR differences in "ability" and "effort". It's easy to sit back and say "woe is me... somebody got more that me, so that' ain't fair" (of course the only reason you've ever even consider that is because some power-hungry politico told you to... and you were dumb enough to go along with the notion) and here you might not have even bothered to graduate from HS.

My "very wise in the ways of the world" grandfather told me when I was a teen... "The world doesn't owe you a living. Make something of yourself". True today as ever.

Politicos, scumbags hungry for votes, want you to think "income inequality" is a bad thing... when in fact it's a very good thing.

 

[jem]

1. Its as if you think the govt has a right to steal our wages as they create more inequality... while pretending they are fixing inequality.

Taxes are too low based on spending?
Hah.

You need to reread this article, the article I we discussed last week and the Romer article you did read.

Spending is too high based on taxes being too high. If you want more govt income... lower taxes.

2. sure post your link I will read it.

3. Artificially rising wages by gov't will eliminate many jobs. not the outcome you would truly want... I trust.

4. So if you wish to raise wages... cease bringing in a million legal immigrants a year and having 20 million illegal immigrants. Wages will rise.

Your teams crony loving policies destroy wages with mass immigration.
25% of america is currently legal immigrants and anchor babies.
What do you think that does to wages?

You are smart but you all need to think in systems... not leftist govt loving platitudes.

I have posted elsewhere on the disincentives to work. I don't want to repeat what I wrote, but I my provide a link later if you care to read it. I will very briefly hit the main point. The disincentives can be addressed by reducing taxes, reducing benefits, increasing wages, or some combination of these actions. However, none of these things that could be done is without repercussions elsewhere in the economy. I have argued that there is incontrovertible evidence that wages are to low rather than benefits being too high. Taxes are to low based on spending. If you want to lower taxes you must find the fiscal leaks that can be plugged without serious damage . A second requirement is that any leaks identified must produce significant savings rather than trivial ones. This greatly limits options. Entitlements are off budget and therefore have to be handled as an independent issue separate and apart from the general budget. Entitlements affect payroll taxes which are a big part of the work disencentive.

When one considers all the ramifications and constraints it is quite clear that by far the best way to increase incentives to work is to raise wages!

 

[jem]

Many people and many businesses leave California every year for the same reasons.

The top 1% of Californian's pay 50% of CA income tax revenue. And California drives more and more of them and their businesses out every year. We see it in the news almost monthly.

I also note. Only a third of Californians pay income tax.

California's plan to fix this problem was to increase state taxes ot 13.3 percent. A plan designed to is to drive more top tax payers out. And so far that plan is working.

Classic example.... Last weekend, wifey, a pediatric surgeon... spent 34 hours at the hospital while on call. Just the weekend!

This weekend, we prepared our income taxes for 2015. She basically said, "FUCK IT... I'm not going to bust my ass and have the government take >50% from my effort".

Now working on the plan to (1) not take call, (2) cut back hours to minimum to maintain health insurance coverage through the hospital. Yeah, it will cost us some money. But will be replaced with less stressful work and more free time. Yet the Progressive solution to every problem always includes "more taxes".

Our progressive tax policy punishes many and discourages them from producing and achieving what they are capable of. She spent 12 years in advanced education and training (post high school) to learn the skills she employs today. Yet thanks to government greed via punitive taxation, she's deciding to not work to her full potential. Personally, can't blame her.

Heck, I abandoned my investment advisory business 15 years ago because I was tired of getting hosed on Social Security Taxes. (I'm not one of those who "contributed $100, but received $500,000 in benefits". I'm on the other end. Even quitting when I did, I calculated I'd need to live to be 113 to break even... not including the buying power loss through currency debasement and inflation, of course. And if I'd kept contributing to SS, it would have only gotten worse.)

FWIW...

 

[ETcallhome]

I won't know how rich or poor I am until I compare to you.

 

[jem]

Rich for me, would be not having to work. I was once rich... but then I got married lost 600 g in the housing market and had 4 kids. Life is good... but I am not rich at the moment.

 

[futurecurrents]

You my have noticed that there is a surprisingly large fraction of the US adult population that are attracted to a very simple solution to an assortment of very complex problems. Their solution is to reduce the size of government, but of course no details are ever forthcoming. Just reduce the size of government. That's it! It is perhaps not coincidental that many of those whose thinking runs along this line are also giving to various conspiracy theories and beliefs that run counter to facts. These folks, though they are adults, essentially think as a child might. They must be taken by the hand and reassured that the boogeyman is not going to jump out from under the bed.

Yes, and some reject the science of global warming because the most effective way of combating it involves government. Runs counter to some "Libertarian" ideals. Maybe you know someone like this.