U.S. income inequality worst since 1928

[viper37]

Nations with a higher tax rate seem to have less income inequality. How are we so sure there's not a casual connection?
depends on how it's calculated too.  Different countries use different statistics.

As an example, in the US, poverty rate is calculated with a relative measure (how far you are from median income).  In Quebec, it's calculated from a market basket measure.  This gives you 2 really different measure called "poverty rate".

With income inequality, you get the same problem unless you use a universal measure.  You could also have a theoritical society where income inequality is very low but median income is 10k$/year.  Is it better than a society with a median income of 80k$ and huge income disparity?  Large countries like the US and Canada will have huge income disparity from one place to another.  How good are you with 80 000$/year in Manhattan?  How do you fare in rural Alabama? 

Stats in themselves won't tell you much, you really got to see if they use similar measure and you got to dig deeper to take definitive conclusions on what is wrong or not.

[viper37]

Imho, what's important, is how many generations it takes to go from the bottom to the upper echelons.

The problem with this measure of social mobility is it doesn't account for the distance between echelons in different countries.  I think a fairer measure of mobility is absolute change: what are the chances (or how long does it take) to move from your parents making 25K to you making 50K (or whatever).

it gets skewed by purchase power then.

[Razgovory]

Nations with a higher tax rate seem to have less income inequality. How are we so sure there's not a casual connection?

Generally the way it works is that if there if you want to argue that a correlation really indicates a causal connection, you offer some sort of evidence.

"Do we have any evidence that it's not?" does not constitute such evidence.

But I'm lazy.

Also, a little on the slow side.  And hell, if we are being honest about everything not exactly handsome either.

[lustindarkness]

But I'm lazy.

Damn lazy Ricans.

[Admiral Yi]

it gets skewed by purchase power then.

Adjust for purchasing power then.

[viper37]

it gets skewed by purchase power then.

Adjust for purchasing power then.

then it's about the same as what I was talking about the first time... We've discussed these stats before, here, I think.  A long time ago, early in Bush 2nd mandate, I think.

[Admiral Yi]

then it's about the same as what I was talking about the first time... We've discussed these stats before, here, I think.  A long time ago, early in Bush 2nd mandate, I think.

No it isn't.  The US has a cheap cost of living, but a huge span between the lowest and highest incomes.

[Siege]

Income inequality can only be resolved by raising the poor, not lowering the rich.
You raise the poor with more job and education opportunities.
Job and education opportunities are a product of lower taxes and higher attraction to investments.

The more rich people, the more people to tax.
The lower the taxes, the more economic activity.
The more economic activity the more rich people.

Why can't people understand such a simple concept as supply-side economics?

[Siege]

then it's about the same as what I was talking about the first time... We've discussed these stats before, here, I think.  A long time ago, early in Bush 2nd mandate, I think.

No it isn't.  The US has a cheap cost of living, but a huge span between the lowest and highest incomes.

I see no problem with having a huge span between the lowest and higher incomes as long as the lowest still higher than the average in the rest of the world.
Raise the poor, don't lower the rich.

[DontSayBanana]

Income inequality can only be resolved by raising the poor, not lowering the rich.
You raise the poor with more job and education opportunities.
Job and education opportunities are a product of lower taxes and higher attraction to investments.

The more rich people, the more people to tax.
The lower the taxes, the more economic activity.
The more economic activity the more rich people.

Why can't people understand such a simple concept as supply-side economics?

It's not that people don't understand it, it's that it's a great theory, but it's not the way the world works.

Business owners don't create jobs when they get tax breaks, they pocket more money because they feel they're entitled to more profits.  Taxpayers are still in such bad financial shape that savings from tax breaks are likely to just go toward digging out of the hole on bills and debt obligations.  Also, "the more economic activity the more rich people" is just flat-out wrong.  What we've seen is that the rich get richer and the poor don't really go up or down.

[Valmy]

Income inequality can only be resolved by raising the poor, not lowering the rich.
You raise the poor with more job and education opportunities.
Job and education opportunities are a product of lower taxes and higher attraction to investments.

The more rich people, the more people to tax.
The lower the taxes, the more economic activity.
The more economic activity the more rich people.

Why can't people understand such a simple concept as supply-side economics?

People understand it.  That is why they do supply side policies all the time.  But, as I said before, economic activity is about more than just taxes.  Political people seem to forget that.  There are countries in the world that do not need to tax yet they are not leading the world in economic activity because there are other factors involved.

[Valmy]

I see no problem with having a huge span between the lowest and higher incomes as long as the lowest still higher than the average in the rest of the world.
Raise the poor, don't lower the rich.

The rich have exactly 0% chance of being lowered in this country, at least by government policies.  It is the middle class that gets blasted on a regular basis.  Why are you so paranoid about the rich?  They are doing great.

[katmai]

But I'm lazy.

Damn lazy Ricans.

Redundant much?

[Jacob]

Income inequality can only be resolved by raising the poor, not lowering the rich.
You raise the poor with more job and education opportunities.

Agreed.

Job and education opportunities are a product of lower taxes and higher attraction to investments.

Not convinced at all.

The more rich people, the more people to tax.
The lower the taxes, the more economic activity.
The more economic activity the more rich people.

The rule of law and sensible regulatory schemes are way more important than low taxes to encourage economic activity.

[Razgovory]

Income inequality can only be resolved by raising the poor, not lowering the rich.
You raise the poor with more job and education opportunities.
Job and education opportunities are a product of lower taxes and higher attraction to investments.

The more rich people, the more people to tax.
The lower the taxes, the more economic activity.
The more economic activity the more rich people.

Why can't people understand such a simple concept as supply-side economics?

So does that mean if you lower taxes to zero you will have infinite economic activity?