The gap between the rich and the poor: how do we reduce it?
 

It is argued that the larger the gap between the haves and the have-nots, the less stable society may become.

What is the best way to reduce this gap?


I believe that a reasonably managed progressive tax system is probably the most effective way to keep the gap from widening. It's probably also the best way to enable society to reduce it. This is probably because it helps fund programs that help the poor with some of the other issues, such as social welfare and subsidies for the poorest of the poor, while keeping taxes low for those who don't make very much.

I think each item in the poll plays a role, but progressive taxation ensures that wealth doesn't flow up the financial hierarchy at a potentially damaging rate.

Discuss your choice, and the implications of other factors.

What kind of gap are you talking about specifically? I'm not in favor of most welfare programs or subsidies, they seems to be linked to a lot of crime, fraud and waste in the US. I'm torn on even having a minimum wage in the first place.

I voted for a progressive tax system. Specifically, one without loopholes so that rich folks can pay a fancy accountant to help them avoid paying taxes.

I think that wealth tends to foster more wealth, so that over time, more and more money will become concentrated among fewer people. This isn't necessarily a bad thing if properly checked. It isn't being properly checked right now, probably because the masses are too caught up in petty squabbling to recognize who's really in charge.

I don't buy the idea that increasing taxes on wealth folk somehow discourages them from trying to earn more money either. I don't know anyone who'd turn down making more money because they don't want to pay more taxes. I'd rather pay 25% on $100,000 than pay 0% on $30,000.

I couldn't help noticing that among your listed choices, there was no option for "all of the above."

Which is a shame, because that's essentially my answer. Elements of all the above choices should be used to aid in closing the gap between rich and poor, and helping eliminate poverty, hunger, homelessness, and insufficient education. No one thing or one isolated idea is going to cure these problems: many different things are needed, to different degrees, and in different ways.

But just to have something to vote, I put down "progressive tax system," because I think a good place to start is by lowering taxes on the poor, raising taxes on the rich, closing loopholes in corporate taxes, and eliminating the treatment of corporations as individuals with rights under the law. Far too much money is being lost by greedy corporations and some super-rich individuals hiding their money offshore, and putting it through a maze of paperwork to essentially legally launder it away from taxation. And far too much effort is being spent trying to make this country work by taxing the shit out of people making $25K, $35K, $45K and $55K a year, and even folks making $60-250K are taking it in the nads way too much.

It's just basic sense: you don't get much cheese out of a guy with two cows; you get serious cheese out of a guy with thousands of cows. Or as Willie Sutton pointed out about the banks he robbed: "That's where the money is."

Why this one?

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.

Consider this: It's time for elections followed immediately by a legislative session in the local homeowners association. It's you as an individual and your $50k/yr income lobbying against your "neighbor" who makes over 3 billion dollars a month and every time "he" does something illegal can endlessly pass the blame around because out of the thousands of people living in his hundreds of houses no one individual can be blamed.

The metaphor kind of breaks down at that point but you get the idea. Basically corporations, when treated as individuals, have all of the rights but absolutely none of the responsibilities and are virtually unstoppable legally. Criminal penalties are rare and almost unheard of, and the single largest corporate fine in history is still less than 1.5bn, at most it's a month or two's profit out of an entire year. They can dump effectively unlimited amounts of money on politicians, dodge responsibility for whatever they want, and can literally afford to break the law.

The inherent flaw in your poll is that it's asking for simple solutions to complex problems.

How do you discourage/reduce the wealth gap? You do it by creating a regulatory and legislative environment that is hostile to an increasing wealth gap. This includes a proper minimum wage and prtotections in place for labourers. It includes a progressive tax system and using those taxes to fund social welfare programs. It includes (gasp) socialist institutions, such as public healthcare and education. It includes a hundred other things I can't think of off the top of my head.

The problem in the US is the first bit -- creating an environment that's hostile to a wealth gap is interpreted as an environment that's hostile to the wealthy -- which, to an extent, is true. This seems to be a sin in the land of the free.

OMG, a world of yes. Making corporations "individuals" with the same right to lobby the Congress as real people has resulted in nothing but legalized corruption, as members of Congress become ever more ensnared by the political priorities of their "donors"-- who of course are not interested in bettering people's lives or aiding the poor and the helpless or finding ways to make more peace in the world, but are instead merely interested in their profit margins, their corporate hegemony, the lining of the pocketbooks of their senior elite.

Recognition of corporations as people under the law equals the legalization of corruption, the legalization of reckless greed, and the pre-undercutting of any future laws to curb corporate greed and recklessness, or even to more strictly regulate the marketplace.

The American Gini Coefficient's (measure of wealth disparity) actually one of the highest in the world, above China and other countries.

I'm upset that GE can afford a 900 person tax department and pay almost zilch in taxes (both through keeping profits offshore and intense lobbying). I'm upset that every time I look through the Tax code I see exceptions for farmers and land developers.

Our laws should foster desirable goals, but should not lean so far towards special interests that Billion dollar multi-national corporations can make off with no taxes.

I'm only dropping in at this point to point out that the poll asks about the most effective way, not the one and only solution. All points can be considered, but what's most effective? How do the other factors play a role? How are they connected?

Don't think in terms of be-all and end-all, as that's oversimplifying it. What's the most effective and why?

Speaking of oversimplifying it, taking money out of the equation as a social lubricant would make individual differences both smaller & more glaringly obvious. I couldn't bring myself to vote for "I have a better idea", because I have none how this will be accomplished, so I settled for "Charity", thinking "good communism."

http://i.min.us/ile4Bs.jpg

:)

the best way to reduce the gap is to redefine "rich" and "poor." technically, i would be considered a "have not." i don't have much, because i choose to not have much, and if i can't afford it, i don't have it. i don't feel any need to acquire more things or raise my "social status." people can look at me and think i'm just a poor schmuck working in a bike shop, but while they are working and dealing with stress to make their $200,000 a year so they can take a vacation two weeks a year and still work while on vacation, i'm drinking with friends, going to parties, and riding bicycles.

the options you present, charity, social welfare, subsidies for the poor...they aren't viable to me. forced charity only incurs enmity towards those you are forced to help. people with lots of money, those considered "successful," amassed lots of money either through hard work or sheer luck, but either way, progressive tax is punishing those who are successful. i am for a flat tax. we are all the same, we should be taxed all the same. why should those with lots of money have to pay more just because they have more money? they earned it, why should they share if they don't want to.

a higher minimum wage would be great, but it can hurt the small business owner. i'm not for that either.

so i go back to redefining "poor," re-educating people, teaching youth that to be "rich" you have to work hard, and it takes time to amass wealth, like, many many years. if you don't have a 99 foot plasma tv and a humvee and a boat you aren't poor, and you don't need those things, you get them because you want them, and if you want them, work and save and then you have earned them. we also have to teach people that those who work in "shitty jobs" are just as important, if not more so, than those with white collar jobs.

if the cabbages don't get picked, you don't eat cabbage. yet we relegate those jobs to illegal immigrants because those jobs are "beneath" us. that is backwards.

oh, and the poor in america are doing quite well compared to the poor in other countries (in general, there are always exceptions). it's all relative. i live alone in an apartment that would fit two families in other countries.

you want the gap to be reduced? give the poor incentive to work harder and make more money, or be content with what they have. bring people up, instead of forcing people to come down.

I think it is a mistake to think that everyone is entitled to keep something just because they've "earned" it. I know that sentence may read real bad, however, when you consider the wide variance associated with the amount of compensation given for a hard day's work, it makes more sense. In other words, just because a person earned something doesn't mean they deserve it. Now, I don't think the government should be in the business of deciding which occupations actually deserve their level of compensation. However, it does make sense to me to expect those who have disproportionately benefited from doing business in the United States to pay a disproportionate amount of their earnings in taxes.

Of course, if you ask the people who get paid millions of dollars to mess around with the money of large corporations, the people who make their money by skimming the cream off of the top of large frothy bowls of other people's money, they'll probably tell you different.