The Top Fifth

[BigRedBuster]

 

I think entitled is the perfect word to use for people who get benefits based solely on their circumstance. Not sure what else to call it when they do nothing in return for receiving it. It is simply handed over because of their situation.

I like this quote because, while it's intended to describe the poor on welfare, it exactly states why I have issues with inherited wealth.

 

 

You have a problem with inherited wealth?

 

What would you propose de done about it in the example I posted in post #31?

[Danny Bateman]

Here are some numbers involving income inequality and help given to "disadvantaged":

 

In 1967 (oldest data available here), the mean household income for the second fifth of the US population (20th to 40th percentile) was $27,513 (adjusted to 2015 dollars). The mean income for the fourth fifth (60th to 80th) was $61,461. Thus the fourth made 223.3% as much as the second (adjusted for inflation). In 2015 (newest data available), the mean for the second was $32,631 while the mean for the fourth was $92,031 - 282.0% as much. So there was an increase of income inequality by about 60% or about 1.2% per year. The reason I bring up the per year number is because a lot of that is simply a function of math. If you start with two different numbers and increase both by the same percentage, the difference gets bigger. So, since the numbers are already adjusted for inflation, the increased difference would be the same as both parties getting a 1.2% wage increase above inflation for all those years. So would that be treating both fairly if they both got the same raise? Or do you have to give the lower earner a bigger raise to keep from exaggerating the income inequality?

 

Now, as far as helping the disadvantaged, let's look at US expenditures Medicare and Income Security (other than Social Security) over the same time period. I'm sure that's not a perfect set to look at but those were two major categories that would seem to be mostly a redistribution from the top half to the bottom half. In 1967, those categories totaled $13,009M dollars which, using the same inflation factor as above, would adjust to $80,739M in 2015 dollars. In 2015, those same categories totaled $1,055,045 in spending. That is an inflation-adjusted 1,306.7% increase or 27.2% per year.

 

So the increase in those programs to help the disadvantaged increased 21 TIMES AS MUCH as the income inequality increased. Now that would be somewhat skewed by the population increase which is 61.5% but even then, it the spending increase would be an 803.6% increase in per capita spending over that time frame.

 

So the questions should be:

Is looking at income inequality really telling the whole story?

Has increasing the redistribution by that amount got us closer to the goal?

Is simply looking to increase the redistribution going about it the right way?

 

OK, this is a fair point. If you think that social welfare programs aren't good allocations of money, that's a defensible position. Particularly when you can back up your position with numbers.

 

But you've effectively argued that you're not sure economic inequality is an effective indicator of social welfare in the United States, and you've tacitly agreed with the Ryan budget cuts as a way of at least maintaining stasis in Medicaid spending rather than inflating it.

 

So my question is what is your proposed alternative for helping those displaced by those cuts? Unless the extent of your argument is "I agree with Paul Ryan's budget plan," you should be prepared to answer this question.

 

Personally, I don't think Paul Ryan has thought enough about that question, or he just doesn't care. He's got this "rising tide lifts all boats" approach wherein improving the economy will help everyone economically and people simply need to use personal responsibility and their mythical bootstraps to lift themselves up out of a hole so they can grasp the ladder and begin climbing. The problems with that "rising tide" idea have been evident since Reagan. The wealth doesn't actually trickle down. Kansas just failed spectacularly using this exact methodology. This is ignoring the numerous harmful concessions that have to be made to juice the economy in the way Ryan wants to, including completely ignoring climate change (which will significantly lower our planet's lifespan and will result in less access to things like clean water or clean air) and the risks widespread financial sector deregulation poses. It's a very short-sighted approach, in my estimation. What happens if he deconstructs the meat of our social welfare programs, as people like Mick Mulvaney and the Freedom Caucus would lead him to do, and another deregulation-induced financial crash occurs?

 

This is all separate from healthcare, whereby a woefully underfunded high-risk pool called for by the GOP will hardly be enough to make a dent in those who have costly medical conditions and our uninsured number will roughly double over 10 years due to the drawdown on Medicaid.

 

So, again, my question is... what is a better way?

[zoogs]

Why is that a fair point? It presents income disparity data between lower quintiles only, misrepresenting the disparity that is the topic at hand. It then suggests redistribution has increased when the CBO website states the opposite is the case. Which is unsurprising, given the administrations. This was by and large not a particularly progressive time, to put it lightly. The entire premise seems fatally flawed.

[knapplc]

Tax rates on the wealthy are not exorbitant. Isn't that what "redistribution of wealth" is actually complaining against? The wealthy think their taxes are too high?

[Danny Bateman]

I'm happy that Mavric was at least able to form an argument, rather than the drive-by potshots or GIF parades that occur when certain other posters try to respond to an argument they don't like.

 

I suppose his argument could be used to compare the upper middle class to the lower middle class, though calling a salary of $27K-$32K is barely scraping the bottom of "lower middle class" if you consider it that at all.

 

It seems odd to me, now that you mention it, to compare Medicaid and other low-income welfare programs to income inequality changes between the two populations he listed.

 

For one, you're talking income gains mainly by the top quintile, correct? And Medicaid + other programs help the bottom quintile the most, do they not?

[BigRedBuster]

So, Dude....

 

How do we handle situations where there are systems in place for people to rise above their place in life where they are born but just don't?

 

Right now, if you are a kid growing up in Nebraska in a poor household, you can pretty much get a free college education based on need. I know a girl who grew up in a single family home where the father is one of the hardest working people I know but his job just doesn't pay much. He told me that when his daughter graduated from HS, she had in place enough assistance to get through college completely free. I know another kid who is the oldest of about 5 kids with a mom that is a total piece of crap. All 5 kids are from different fathers and I'm not sure she even knows who some of the fathers are. This kid is amazing in that he basically has raised his younger siblings (and they are going to suffer by him not being there). BUT....he is headed to UNK to get a college education and I have every reason to believe this kid is going to do great things compared to where he came from....unless his mother somehow screws his life up even more.

 

Meanwhile, I know a girl who graduated probably in the top 10% of her class. She's bright, well spoken and also came from a family with not much money. She decided she hates school and didn't want anything to do with college so she went and found guy with the same attitude. She now is a waitress at a cafe with a baby at home and the husband works a low paying job. I know a kid who rebelled against his parents and wouldn't take any advice from them and just graduated and is already shacking up with his girlfriend and both think they are so much smarter than anyone going to college while he works at a local garage changing oil. He could have easily gone to milford and at least gotten a mechanics degree to make more money.....but...he's too smart for that. She doesn't have a job.

 

For all these kids, there were systems in place for them to rise above their family's lot in life. Some chose to go down the road that (chances are) will give them a better life financially even though they came from very poor familes. Meanwhile, others have chosen not to take advantage of the systems in place.

 

These scenarios play out in every city and small town in America and all of it gets lumped into the statistics that we are all talking about.

So.....fine....if people don't want to continue their education and want to start working....that's their choice. But.....then why are we making major policy decisions in Washington without taking into consideration people just sometimes don't give a crap and choose to live their lives in other ways?

[zoogs]

Tax rates on the wealthy are not exorbitant. Isn't that what "redistribution of wealth" is actually complaining against? The wealthy think their taxes are too high?

Yes, I think so. Tax rates in general aren't exorbitant. Sometimes proposed taxes and forms of tax relief are put to good use, and sometimes not.

 

BRB, in what way are we doing that and what is the counter proposal? Sometimes people don't take advantage, therefore limit the resources provided?

[BigRedBuster]

 

BRB, in what way are we doing that and what is the counter proposal? Sometimes people don't take advantage, therefore limit the resources provided?

 

 

There has to be some way to quantify or evaluate instead of just looking at wealth inequality. All the examples I have stated are going to end up (probably) in a pretty wide wealth inequality between these people throughout their lives. Is that because of some horrible Republican in Washington wanting to keep these people poor? No.

 

In each of these situations, these kids are in a situation where they can make the choice to take advantage of government programs to improve their future economic standing. Some chose to take advantage of it and some not. It's PURELY their choice to do that....after all, we live in a free society.

 

But, if people so choose to NOT take advantage of what is there, what responsibility does society have to keep pumping money into more and more programs to try to help them....and, to the extreme.....what right does society have to flat out take money away from the group that took advantage of the programs in place and give it to the ones that chose not to just because there is an income inequality?

 

As for counter proposals.....I believe the government should continue to provide programs like educational assistance for people who need it. BUT....if they so choose not to use it.....what responsibility do these rich people have to keep pumping more and more of their money into more and more programs and to redistribute their wealth to them?

[BigRedBuster]

How does society somehow inform or educate kids/people on programs available to them and how they can improve their lives with what is already in place and the importance to use those programs and use them wisely?

[zoogs]

I’m not sure which programs exactly we’re talking about. In the general, you can lead horses to water, but you can’t make all of them drink. Some of them won’t. Some will. It’s worth it to have the water there.

 

The people who took advantage of the programs in place were themselves parts of groups of people that included others who didn’t. If that had been used as justification to curb those programs, these people wouldn’t have been able to take advantage.

 

I don’t think the situation is that dire. Our national conversation is about whether to roll back basic safety net coverage. The existing safety net, I could agree is both poorly designed and insufficient. To use the earlier analogy, we could be thinking of better ways to lead those horses to water, for example.

[RedDenver]

 

 

I think entitled is the perfect word to use for people who get benefits based solely on their circumstance. Not sure what else to call it when they do nothing in return for receiving it. It is simply handed over because of their situation.

I like this quote because, while it's intended to describe the poor on welfare, it exactly states why I have issues with inherited wealth.

 

You have a problem with inherited wealth?

 

What would you propose de done about it in the example I posted in post #31?

 

Read what I quoted and you'd see my issues with inherited wealth.

 

As for post #31, yes, we should break the chain of inherited wealth, whether that's a rancher or a banker should make no difference. Why should someone get millions or billions of dollars having done nothing to earn it?

 

As for my solution, it would be to allow small (relatively speaking) transfers of wealth but just prevent the gigantic transfers of wealth, which is similar to the estate tax today. I'd select a limit case - say $10 million/person - that a person could pass on to anyone they wanted (not just their kids), and then tax the rest at 90%. In this case, your ranchers could pass up to $20 million (for a couple) worth of the ranch without taxes. I'd even go so far as to agree to a higher limit like $50 million/person if the associated tax was also higher like 99%.

 

Another idea would be to completely change the tax system to tax accumulated wealth instead of income (which is the rate of wealth increase/decrease). Then there's no need for an estate tax as the total inheritance is being taxed regardless of who owns it. I like this idea since it tends to encourage people to spend their money, which drives the economy. But it's probably impractical since someone like your ranchers may have their land value increase and then pay a lot more than their income stream in taxes, which likely leads to them having to sell parts of their ranch.

[BigRedBuster]

 

 

 

I think entitled is the perfect word to use for people who get benefits based solely on their circumstance. Not sure what else to call it when they do nothing in return for receiving it. It is simply handed over because of their situation.

I like this quote because, while it's intended to describe the poor on welfare, it exactly states why I have issues with inherited wealth.

 

You have a problem with inherited wealth?

 

What would you propose de done about it in the example I posted in post #31?

 

Read what I quoted and you'd see my issues with inherited wealth.

 

As for post #31, yes, we should break the chain of inherited wealth, whether that's a rancher or a banker should make no difference. Why should someone get millions or billions of dollars having done nothing to earn it?

 

As for my solution, it would be to allow small (relatively speaking) transfers of wealth but just prevent the gigantic transfers of wealth, which is similar to the estate tax today. I'd select a limit case - say $10 million/person - that a person could pass on to anyone they wanted (not just their kids), and then tax the rest at 90%. In this case, your ranchers could pass up to $20 million (for a couple) worth of the ranch without taxes. I'd even go so far as to agree to a higher limit like $50 million/person if the associated tax was also higher like 99%.

 

Another idea would be to completely change the tax system to tax accumulated wealth instead of income (which is the rate of wealth increase/decrease). Then there's no need for an estate tax as the total inheritance is being taxed regardless of who owns it. I like this idea since it tends to encourage people to spend their money, which drives the economy. But it's probably impractical since someone like your ranchers may have their land value increase and then pay a lot more than their income stream in taxes, which likely leads to them having to sell parts of their ranch.

 

I am so friggen against this it's amazing.

 

You have a family who has a ranch. These kids have ALSO worked on this ranch since they probably could walk. Let's say they are now in their 50s and the parents die which creates an inheritance issue. These people who are now in their 50s should be forced to lose their ranch that they have also worked their entire lives to build and maintain? All this just because their parents passed away?

 

What kind of loony toon logic is that?

[knapplc]

So, someone builds a ranch and it becomes valuable.

 

Who has a more solid claim to the value of that ranch when the person dies? Their family or the State?

[Moiraine]

Major policy decisions should not be made based on anecdotes.

[zoogs]

So, someone builds a ranch and it becomes valuable.

 

Who has a more solid claim to the value of that ranch when the person dies? Their family or the State?

Whomever the person chooses. I'm in disagreement with RedDenver on this point, it seems.