Tilted Forum Project Discussion Community - View Single Post - The gap between the rich and the poor: how do we reduce it?

Wyvers · 04-23-2011, 11:57 PM

From what I've read it's inflation that really increases the gap between the rich and the poor. It's comes down to who is able to increase their income as needed based on what is required to sustain their living standards.

Business owners, as the prices to maintain profits and keep their current lifestyle goes up they raise prices to compensate for it. If you own a sandwich shop and cheese prices go up, naturally you'll charge more for your sandwich. You've passed down the price increase to your customer. As a regular person who works say a nine to five, when the prices of everyday essentials rise your paycheck stays relatively static. We can't exactly go to our managers and demand a raise because the cost of gas has gone up. Your boss however can look at his suppliers who are charging more for raw goods required to sustain his business and say well since i'm being charged more I need to charge my consumers more.

A few decades ago a decent job landed you living very comfortably in the middle class. Looking as time progressed we're watching the middle class disappear because of their lack of leverage against rising prices. What the poor and middle class have in common is the inability to leverage against rising prices. While the rich stay rich or increase their gains primarily because of their ability to ignore fluctuations in rising prices. If prices of everything stayed relatively stable it keeps the gap from widening.

With a reformed tax system it still doesn't help compensate those who really need it as everything around them increases in price while their main source of income can't keep up. Being taxed less will help them but not in the long run. People will feel it's not fair, some have worked hard for their money and others will say spread the wealth. If you're making 100k a year get taxed at 50% you're sitting on 50k. Another will make 30k and is in a 0% bracket taking home 30k a year working at said sandwich shop. Let's say the first guy owns the modest sandwich shop and gas prices are sitting at $7/gallon so shipping costs of his inventory skyrockets and he has to charge double for his sandwiches and then some. That following year he's brought in more money say 200k still taxed at 50% he brings home 100k. He's doubled his income and is able to keep up with gas prices. Our neighbor who made 30k at the sandwich shop is unlikely going to see a 30k raise from his boss because of rising living costs. Say he gets a bump to 40k and still sits in the 0% bracket. If gas has doubled and likely so will many other essentials, he's going to have to make extreme sacrifices to stay afloat.

A different tax system would keep the rich at bay but looking in the long run it doesn't help the poor as much as we would like. Just my point of view. There's a lot you can read about the value of our dollar but I won't go into that here.

04-23-2011, 11:57 PM	#6 (permalink)
Wyvers Upright Location: SL, CA	From what I've read it's inflation that really increases the gap between the rich and the poor. It's comes down to who is able to increase their income as needed based on what is required to sustain their living standards. Business owners, as the prices to maintain profits and keep their current lifestyle goes up they raise prices to compensate for it. If you own a sandwich shop and cheese prices go up, naturally you'll charge more for your sandwich. You've passed down the price increase to your customer. As a regular person who works say a nine to five, when the prices of everyday essentials rise your paycheck stays relatively static. We can't exactly go to our managers and demand a raise because the cost of gas has gone up. Your boss however can look at his suppliers who are charging more for raw goods required to sustain his business and say well since i'm being charged more I need to charge my consumers more. A few decades ago a decent job landed you living very comfortably in the middle class. Looking as time progressed we're watching the middle class disappear because of their lack of leverage against rising prices. What the poor and middle class have in common is the inability to leverage against rising prices. While the rich stay rich or increase their gains primarily because of their ability to ignore fluctuations in rising prices. If prices of everything stayed relatively stable it keeps the gap from widening. With a reformed tax system it still doesn't help compensate those who really need it as everything around them increases in price while their main source of income can't keep up. Being taxed less will help them but not in the long run. People will feel it's not fair, some have worked hard for their money and others will say spread the wealth. If you're making 100k a year get taxed at 50% you're sitting on 50k. Another will make 30k and is in a 0% bracket taking home 30k a year working at said sandwich shop. Let's say the first guy owns the modest sandwich shop and gas prices are sitting at $7/gallon so shipping costs of his inventory skyrockets and he has to charge double for his sandwiches and then some. That following year he's brought in more money say 200k still taxed at 50% he brings home 100k. He's doubled his income and is able to keep up with gas prices. Our neighbor who made 30k at the sandwich shop is unlikely going to see a 30k raise from his boss because of rising living costs. Say he gets a bump to 40k and still sits in the 0% bracket. If gas has doubled and likely so will many other essentials, he's going to have to make extreme sacrifices to stay afloat. A different tax system would keep the rich at bay but looking in the long run it doesn't help the poor as much as we would like. Just my point of view. There's a lot you can read about the value of our dollar but I won't go into that here.