Tulio writes: I’m not in favor of communism or redistributing income. I believe in wage growth for the lower and middle classes. I believe in higher taxes on the wealthy and on capital gains. I believe in more regulation of the market, support for unions, single-payer healthcare.
One by one.
I’m not in favor of communism or redistributing income.
I think the commenter is unclear on the concept here.
I believe in wage growth for the lower and middle classes. I believe in higher taxes on the wealthy and on capital gains. I believe in more regulation of the market, support for unions, single-payer healthcare.
I am curious about the commenter’s understanding of economics, although the vast majority of Americans are probably not even at his level.
I hope the commenter realizes that every single one of those things boils down to redistribution of income. I would also point out that every single person in the US who is opposed to redistributing income is also highly supportive of our present inequality.
The problem is inequality.
What is the solution to the problem of inequality?
The solution to inequality, always and everywhere, is redistribution of income. If you don’t redistribute income, you don’t get rid of the inequality. It really is that simple.
I believe in wage growth for the lower and middle classes.
Ok, this is going to cause some serious redistribution of income right there. Why do you think the business class, the rich and the Right always want to keep wages as low as possible, especially at the bottom end? Because money doesn’t grow on trees, that’s why.
Picture the economy like a pile of money surrounded by a hundred people. Everyone rushes in and grabs whatever they can. Now that they are standing around with the money in their hands, we just decided we are going to raise the wages at the lower end. That means those with the lowest and medium amounts of money from that pile are going to get more money. Where are we going to get the money to raise their wages? There is only one place to get that money and that is from the wealthy class that grabbed a lot more money out of that pile. Follow?
If it was possible to raise wages at the lower and middle ends without hurting the incomes of business and the rich, do you think the rich and business would fight it so hard?
I believe in higher taxes on the wealthy and on capital gains.
Ok, this is a complete contradiction. This is the very definition of redistribution of income right there. Raising taxes on the rich and capital gains is the same thing as redistributing income. This is how one redistributes income. One raises taxes on the rich and investors if you want to redistribute income downwards.
I believe in more regulation of the market
This tends to cut into the incomes of the business class, lowering their very high incomes. If you reduce the incomes of the rich business class, that tends to boil down to some sort of income redistribution or at least a reduction in inequality. A lot of this regulation is pro-investor, pro- homeowner and pro-consumer, so often there are real income gains at these levels as a direct effect of regulation on business.
support for unions
This is probably one of the most popular and time-tested ways of redistributing income. Unions are nothing more than income redistribution machines. Why do you think the rich and business hate unions so much? Do you think they hate unions for no reason? If unions didn’t cause the rich and business to lose one penny, do you think they would hate them so much?
As a good general rule, this is typically done by raising taxes on workers, consumers, business or investors or simply income earners in general. In the US, the only way to do this is to raise taxes, and most proposals seem to involve raising taxes on the rich and investors.
Even when you have an across the board tax increase, there is a huge income redistribution effect from single payer because most people are now paying almost nothing for their health care, whereas before they were often paying huge portions of their incomes. So there is a real growth in disposable income especially at the lower and middle ends.
And an across the board tax increase is probably a wash at the lower and middle ends because they probably obtain more health care than they pay out in taxes. In other words, maybe they pay $1,000/yr increased taxes for single payer, but the average person probably uses $5,000/yr in health care resources. So they are getting $5,000 worth of health care for $1,000. It is a screaming deal.
At the higher end though, some rich people may be paying $20-30,00/yr more in taxes for single payer, whereas they may only be using $5,000/yr in health care, or they may actually be using $0 in health care, since they bought private insurance and use that instead of the national system.
The poorer you are, the better of a deal you get for your tax money. Many Americans at the lower end pay no taxes at all yet are able to reap quite a good amount of money’s worth in government services for $0.
The rich usually do not get their money’s worth for their taxes. That’s why they hate them so much. If you make $300,000/yr you may pay $90,000/yr in taxes. Most people with that income are not going to use anywhere near $90,000 in government services. They’re getting ripped off. Now you can see why the rich are so furious about taxation.