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Old 04-04-2011, 07:56 PM   #21
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Originally Posted by engprodigy View Post
I think if a very large portion of the population were living in terrible conditions than the wealth distribution would matter. . . .
I don't see a very large portion of the population suffering while the top 5% plot and scheme to impoverish them.
Which is more important:
- The objective level of comfort experienced by the poor, or their perception of their condition as compared to the wealthy?
- The actual reasons that the poor are poor, or their perception of the reasons?

There are a growing number of newly unemployed authoritarian rulers who would take exception to your observation that wide distribution of cell phones and internet-linked computers will reduce the likelihood of unrest.

I'm not sure that wealth distribution is a key factor in civil harmony. It's likely more important that people believe they have a real chance to improve their situation ("I can get ahead in this world if I make good decisions and work") and a perception that they've got something to lose if things get ugly.
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Old 04-04-2011, 08:18 PM   #22
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I'm not sure that wealth distribution is a key factor in civil harmony. It's likely more important that people believe they have a real chance to improve their situation ("I can get ahead in this world if I make good decisions and work") and a perception that they've got something to lose if things get ugly.
True perception plays a part.

And I believe there are plenty of people trying to create the perception that we need to "stick it too the wealthy" so that everyone has a better life...

I don't think that is the reality of what the majority feel or think about the current situation in our country.
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Old 04-04-2011, 08:18 PM   #23
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It's likely more important that people believe they have a real chance to improve their situation ("I can get ahead in this world if I make good decisions and work") and a perception that they've got something to lose if things get ugly.
And I would add that there is the perception the system is not rigged against them in their quest to improve their situations. A fact that lately, many may be questioning...
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Old 04-04-2011, 08:20 PM   #24
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Well I think there is more to it than that. I see no problem with the wealth distribution in our country because I don't think that is the true measure that can be used to discern the potential for revolution.

85% of our population has cell phones.
78% of our population has internet access.
85% of our population has access to an automobile.

I think if a very large portion of the population were living in terrible conditions than the wealth distribution would matter. When even the lower end of the spectrum enjoys the same types of lifestyle than I don't think just because a few million are really well off matters at all.

I lead a much cheaper lifestyle than people that probably have half the income...

I don't see a very large portion of the population suffering while the top 5% plot and scheme to impoverish them.

I have to agree completely. This is not and will not become some banana republic with 99% of its citizens impoverished without even the basic necessities of life. Those are the conditions that breed revolution and riots. I don't ever see that happen here.
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Old 04-04-2011, 09:44 PM   #25
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And I would add that there is the perception the system is not rigged against them in their quest to improve their situations. A fact that lately, many may be questioning...
I agree with you,also LARS. I worry this generation that is just starting their adulthood in general won't have it as good as my generation (I'm in my 40's). I hope I'm wrong. I remember in the early 80's kids could work at the local brick plant and make $10 an hour for summer work. Most kids can't get that pay now. Of course the brick factories are long gone, but that's another issue. I certainly, right or wrong, don't blame it on the rich people though. Globalization plays a big role in this, though. I was surprised to read the other day, that manufacturing in the US still produces 40% more in DOLLAR VALUE still than China does. A lot of people would be surprised by that I imagine, I was.
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Old 04-05-2011, 08:53 AM   #26
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Interesting...that....our government and politicians...can make decisions for decades...that lead to what they now call wealth inequality(tongue in cheek)....and I might add...that was highly predictable.....and when things become somewhat "unsustainable"....they target someone else (the top1%,5%). That is part of my take away from this article. The data and the article are being generated....for a reason. I'd be curious...to see population growth numbers, what that growth was attributable to, where that growth ended up in the percentages and whether or not it increased or decreased true percentages in a chart for the same time periods. There are more reasons....than just "stock market investment"...for the inequality of wealth in our nation and I don't think this article tells the whole story. To tell the whole story might have made the article too cumbersome. Who knows? But to draw conclusions from just part of the story....well...is ...typical...of the rhetoric we've been hearing for a while now.

What was interesting to me in this article is that 50% of American households do not own 1 stock. It's probably the same 50% that don't pay any tax. I'm not sure if a household doesn't pay tax...they should even be included in the percentages of wealth generation...except to point out...the large percentage of people the tax paying people are carrying. Perhaps that was the point.

There are other things I could say...but don't think the forum rules allow for it.
Suffice it to say...I'm starting to believe on a purely functional level....we have 2 political systems in the U.S.
(and I'm not talk about Democrats and Republicans )
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Old 04-05-2011, 09:26 AM   #27
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Feeling poor? This site will make you feel better. It compares your annual income with the rest of the world's. Even someone with a $10k income is still in the top 13%:

Global Rich List

Someone on welfare in the U.S. is still better off than the majority of the world's population.
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Old 04-05-2011, 09:32 AM   #28
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Which is more important:
- The objective level of comfort experienced by the poor, or their perception of their condition as compared to the wealthy?
- The actual reasons that the poor are poor, or their perception of the reasons?

There are a growing number of newly unemployed authoritarian rulers who would take exception to your observation that wide distribution of cell phones and internet-linked computers will reduce the likelihood of unrest.

I'm not sure that wealth distribution is a key factor in civil harmony. It's likely more important that people believe they have a real chance to improve their situation ("I can get ahead in this world if I make good decisions and work") and a perception that they've got something to lose if things get ugly.
Yes. Perceptions count.

In the US, we've historically been okay with wide disparities in wealth because people believed we had a "fair" society. If you worked hard and followed the rules you could achieve an okay standard of living that included the likelihood that your children would do even better. If you worked really hard and got a little lucky, you could be one of those at the top.

(I've quoted an 1831 essay from John Adams that shows this attitude has been around for a long time.)

Now we have lots of people who feel they are worse off then their parents, even though they worked hard and followed the rules. I don't think we're anywhere close to armed revolution. But, I don't think we've seen the worst of the economic results yet. I think our contentious and disfunctional politics are somewhat driven by this feeling that following the rules doesn't get you where you want to go.
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Old 04-05-2011, 12:08 PM   #29
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Entitlements have done a lot to screw with perception.

I'd be shocked to discover a large % of people that have played by the rules and worked hard that have been screwed by the system and are living in near poverty...
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Old 04-05-2011, 12:24 PM   #30
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I don't know guys...I just don't know. I'd say the top 50% of taxpayers paying for everyone ...is what is unsustainable. The ones with the money will have to probably give more....BUT...everyone is going to have to take less.... in entitlements...including...the bottom 50%...to make anything work. It isn't going to work to just throw money at it. The problem doesn't go away or isn't solved that way.
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Old 04-05-2011, 12:31 PM   #31
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I wish people would stop omitting the word "income" from the phrase "50% that don't pay any income tax".

Between FICA, sales tax, property taxes, sin taxes, user fees, etc, the bottom half of this country does pay a significant amount of tax. FICA makes up 36% or so of Federal tax revenue, so it isn't an insignificant portion of the total tax base.

Note also that it isn't uniformly the bottom 50% that doesn't pay income taxes. People who have worked the deduction game particularly well can make $80k+ and end up paying no income taxes in some years.


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What was interesting to me in this article is that 50% of American households do not own 1 stock. It's probably the same 50% that don't pay any tax. I'm not sure if a household doesn't pay tax...they should even be included in the percentages of wealth generation...except to point out...the large percentage of people the tax paying people are carrying. Perhaps that was the point.
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Old 04-05-2011, 12:33 PM   #32
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All the "poor middle class stuff" in the media of late is pretty ridiculous if you actually look at the numbers:

The middle 20% average 60k in income.

As a group they receive 13% of all income and pay 9% of all taxes.

It truly is an absurd practice to compare the top 1% to the middle 20%, or the middle 50%, or even the top 25%...

Why would you compare outliers to those within 1 std deviation?

I really want to know how the middle class is getting squeezed...
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Old 04-05-2011, 12:37 PM   #33
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Between FICA, sales tax, property taxes, sin taxes, user fees, etc, the bottom half of this country does pay a significant amount of tax. FICA makes up 36% or so of Federal tax revenue, so it isn't an insignificant portion of the total tax base.
Considering all of the taxes you just mentioned are paid by the top 50% as well (in larger quantities) I would be surprised how significant the tax contributions are from those paying 0 income tax...
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Old 04-05-2011, 12:49 PM   #34
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This is key. I don't think people mind when someone becomes vastly wealthy because of real inovation that improves things. I don't begrudge Steve Jobs most of his wealth (outside of his backdating options money).

I do take issue with the fortunes that people at the top seem to be able to generate from failure. Bob Nardelli walked away from Home Depot with hundreds of millions of dollars. I could have run the company into the ground as well as him. A large portion of the financial industry has gotten rich playing "heads I will, tails you lose".

I think that people want a sense of fairness from the system. I make half what my Dad makes because he works at least twice as hard. I don't begrudge him that money. I would not trade places with him to get it.

I begrudge the Bob Nardellis of this world their money though. They aren't producing wealth, just siphoning it off.

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And I would add that there is the perception the system is not rigged against them in their quest to improve their situations. A fact that lately, many may be questioning...
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Old 04-05-2011, 01:08 PM   #35
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I wish people would stop omitting the word "income" from the phrase "50% that don't pay any income tax".

Between FICA, sales tax, property taxes, sin taxes, user fees, etc, the bottom half of this country does pay a significant amount of tax. FICA makes up 36% or so of Federal tax revenue, so it isn't an insignificant portion of the total tax base.
It would be interesting to see some numbers to put a range on "significant". We can also argue that since low wage earners get a much better 'return' on their FICA, that isn't too bad.



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Note also that it isn't uniformly the bottom 50% that doesn't pay income taxes. People who have worked the deduction game particularly well can make $80k+ and end up paying no income taxes in some years.
I've experienced that. Yet, I still paid property tax, sin tax, sales tax, DW paid FICA.... But that has been one year (near zero) out of 30+ years.

-ERD50
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Old 04-05-2011, 01:10 PM   #36
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I'm not sure that wealth distribution is a key factor in civil harmony. It's likely more important that people believe they have a real chance to improve their situation ("I can get ahead in this world if I make good decisions and work") and a perception that they've got something to lose if things get ugly.
I am really concerned about the younger generation (my kids included) growing up in an America today that provides less opportunity than the one most of us grew up in. Unless we can improve the jobs outlook, I suspect there will be a rise in civil disharmony.

One other analogy which is interesting to look at in terms of wealth disparity is the income of average workers vs CEOs over the years. When I went into the workforce (1970s), I would guess there was maybe a 25X difference, but today its probably 250X or more. Also, back then if you as a CEO laid off your workforce that was viewed as failure, now they get bonuses and high fives for doing that. While this is purported to be a matter of survival in the global marketplace, it would seem that greed to some extent played a role in diminishing opportunity for the masses?
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Old 04-05-2011, 01:24 PM   #37
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I wish people would stop omitting the word "income" from the phrase "50% that don't pay any income tax".

Between FICA, sales tax, property taxes, sin taxes, user fees, etc, the bottom half of this country does pay a significant amount of tax. FICA makes up 36% or so of Federal tax revenue, so it isn't an insignificant portion of the total tax base.

Note also that it isn't uniformly the bottom 50% that doesn't pay income taxes. People who have worked the deduction game particularly well can make $80k+ and end up paying no income taxes in some years.
Well......I can't slice and dice every little word. I think most knew what I meant within the context of what I was writing. Yes...I meant "INCOME TAX". That's the only tax where some pay and others do not...that I can think of ...off the top of my head.
I don't know many that can play the deduction game you mention that make $80,000 and pay zero income tax. Even my daughter ...working full time this year and showing about $43,000 in income paid $7,300 in taxes (no itemization). With W2's and 1099's you can not hide your income. Meaning ..it's fairly straight forward.
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Old 04-05-2011, 01:35 PM   #38
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I am really concerned about the younger generation (my kids included) growing up in an America today that provides less opportunity than the one most of us grew up in. Unless we can improve the jobs outlook, I suspect there will be a rise in civil disharmony.

One other analogy which is interesting to look at in terms of wealth disparity is the income of average workers vs CEOs over the years. When I went into the workforce (1970s), I would guess there was maybe a 25X difference, but today its probably 250X or more. Also, back then if you as a CEO laid off your workforce that was viewed as failure, now they get bonuses and high fives for doing that. While this is purported to be a matter of survival in the global marketplace, it would seem that greed to some extent played a role in diminishing opportunity for the masses?
People aren't any greedier today than in the past. What we're seeing is the market at work. In the 50s and 60s labor was in short supply in the US as our industry expanded after the war to feed worldwide demand. Businesses didn't pay workers a lot because they were kind or benevolent, they paid them a lot because they had to in order to get solid workers in a tight market. Today our workers are competing against workers from around the world who get paid very little per hour. Our workers, even those with minimal skills, still get paid a lot compared to the rest of the world, but this will go down unless we re-cultivate some important relative advantages (lower tax rates, better "treatment" of capital, education that equips people to think critically and function in the work force, etc). Regarding the rise of CEO pay, we've got structural problems that serve to distance those who own public companies (stockholders) from those who run them (CEOs), and this is part of the reason for higher CEO pay. Lower worker pay and higher CEO pay are due to entirely separate dynamics, and to pile them together and determine they are related and evidence of a change in human motivations (greed) is probably not accurate.
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Old 04-05-2011, 01:56 PM   #39
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Someone on welfare in the U.S. is still better off than the majority of the world's population.
Unless adjusted for cost of living, the income comparison is only modestly interesting at best.

Put another way, I'd much rather have $10,000 and live in say Vietnam, than have the same $10,000 and live in the US. No question.
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Old 04-05-2011, 02:01 PM   #40
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It would be interesting to see some numbers to put a range on "significant". We can also argue that since low wage earners get a much better 'return' on their FICA, that isn't too bad.
-ERD50
http://www.itepnet.org/whopays3.pdf

I stumbled across this and it might have the answer you are seeking. I was actually surprised at how Washington (my home state) ranked in terms of the poor -- we are the worst place to be if you are poor! Interesting .pdf nonetheless. Have fun!
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