Income Inequality

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You shouldn't.
I love baseball. But the players and the entertainment industry as a whole are so overpaid.

What about the doctor who saves lives?

The paramedic working a 24 hour shift?

The police officer who stopped a robbery in progress?

The firefighter rushing into a burning building to save a person they have never met?

The soldier who is willing to sacrifice everything?

The scientist who just made an important scientific breakthrough?

Our damn teachers and professors?!?!?
 
I love baseball. But the players and the entertainment industry as a whole are so overpaid.

What about the doctor who saves lives?

The paramedic working a 24 hour shift?

The police officer who stopped a robbery in progress?

The firefighter rushing into a burning building to save a person they have never met?

The soldier who is willing to sacrifice everything?

The scientist who just made an important scientific breakthrough?

Our damn teachers and professors?!?!?
How many Teachers are there, now compare that to professional elite baseball players and feel silly.

Entertainment has a Market, so long as people are willing to pay to be entertained the entertainers will be making money.

Heck not that long ago most sports where not even professional, people had to work jobs just to support their sport career and often they would have to miss games just to work, that is insane when you consider the amount of money that goes to the people that run the events, with the actual entertainers earning nothing.
 
I love baseball. But the players and the entertainment industry as a whole are so overpaid.

What about the doctor who saves lives?

The paramedic working a 24 hour shift?

The police officer who stopped a robbery in progress?

The firefighter rushing into a burning building to save a person they have never met?

The soldier who is willing to sacrifice everything?

The scientist who just made an important scientific breakthrough?

Our damn teachers and professors?!?!?

People with genuine talent can make as much as they want. I am more annoyed by talentless people like the kardashians or youtubers like Logan Paul or that cash me outside kid who in my opinion receive way too much money for just being controversial and no real unique talent. Not really a right message for future generation.
 
I love baseball. But the players and the entertainment industry as a whole are so overpaid.

What about the doctor who saves lives?

The paramedic working a 24 hour shift?

The police officer who stopped a robbery in progress?

The firefighter rushing into a burning building to save a person they have never met?

The soldier who is willing to sacrifice everything?

The scientist who just made an important scientific breakthrough?

Our damn teachers and professors?!?!?

A firefighter, doctor, and paramedic can save one life at a time (which these days, the life is entitled to the saving, and paramedic is not entitled to pay for that saving). The police can stop one robbery at a time, and how much is that robbery worth? $1000? $10,000? Scientists occasionally win big, but often they sacrifice the opportunity to win big in exchange for reducing the possibility of failure, and instead work for a company where they get paid well and in exchange the company wins big when one of their scientists has a breakthrough.

How valuable is a teacher? I can teach every high school subject, and I'm qualified to teach a number of college subjects. You might say that a kindergarten teacher can have an immeasurable invaluable impact on a child, but if that same impact is offered by someone who is willing to work for $1000 less per year, then it's worth $1000 less per year.

But if you can entertain millions. To the tune of even $1.... that's a lot of value.
 
How valuable is a teacher? I can teach every high school subject, and I'm qualified to teach a number of college subjects. You might say that a kindergarten teacher can have an immeasurable invaluable impact on a child, but if that same impact is offered by someone who is willing to work for $1000 less per year, then it's worth $1000 less per year.
True. However, your example also illustrates one of the weaknesses of free market capitalism.
 
True. However, your example also illustrates one of the weaknesses of free market capitalism.

It's not so much a weakness or strength of one system of government or another, but a description of reality. You can try to distort it with government, but the underlying reality will crop up.
 
So who still believes in trickle down economics?

I really wish you would stop posting Robert Reich video's. I don't care what he has done in the past, he has devolved into the liberal version of ole Rushy.

As for trickle down economics, I firmly believe it exists to some extent as I am a beneficiary myself. People with too much money decide they need more room so they either add on to their existing house or build a new one. That puts people like me to work since someone needs to build what they want (sometimes multiple times since rich people can never make up their minds).

Now for the taxes, it's no surprise the cuts haven't made much of a difference since the tax code is such a cluster to begin with. They need to a complete re-do of the entire tax code, but that won't happen as that would be "common" sense (and would put quite a few accountants out of work).
 
I really wish you would stop posting Robert Reich video's. I don't care what he has done in the past, he has devolved into the liberal version of ole Rushy.

As for trickle down economics, I firmly believe it exists to some extent as I am a beneficiary myself. People with too much money decide they need more room so they either add on to their existing house or build a new one. That puts people like me to work since someone needs to build what they want (sometimes multiple times since rich people can never make up their minds).

Now for the taxes, it's no surprise the cuts haven't made much of a difference since the tax code is such a cluster to begin with. They need to a complete re-do of the entire tax code, but that won't happen as that would be "common" sense (and would put quite a few accountants out of work).

Isnt it only the second one I posted? To be fair, he does base his opinions on facts. Ofcourse it exists in good companies often run by families, who care about their workers, but dont expect it from the majority companies who answer to shareholders.
 
I want to talk for a second about passive income. I considered posting this in the tax discrimination thread, but income inequality seems like a better fit. I've still not seen anyone explain to me why income inequality is a problem in and of itself, the problem always ends up being something else (crony capitalism caused by government overreach). But I do want to talk about the income inequality that is created by wealth inequality for a moment.

Money is highly non-linear. It takes an insanely long amount of time to accumulate your first million dollars compared to your second. And the third comes faster still. The reason is because money itself can produce value. You can lend it to someone who is the enabled, via the resources, to create far more wealth. As a result, the lending is valuable in and of itself. The is one of the fundamental ways economies grow. The same is true if the money buys a resource which itself is in demand. For example, if oil is in demand but is expensive to get to, it can be worthwhile to spend money extracting it and sell it for profit. Money can build a house which is in demand to be rented. There are many ways that money does its own literal production. It can be left alone to do almost no producing, but often it is invested in something that yields a profit. In fact, as you accumulate money, it becomes something of a focus to leverage it and generate passive income (ie: your money makes money without your labor).

Wealth inequality therefore leads to income inequality. Because the wealthy can leverage their assets to generate income, and it's not particularly hard for money to produce more than many people can. Consider this, do you produce more than $1M produces? At a reasonable rate of return, say 6%, $1M produces $60,000 per year. If you make less than that, a million dollars can out-earn you. Just about all of us have some level at which money can out-earn us. $10M at that same rate can earn $600,000 per year. Who among us can directly generate that level of production? Maybe a handful of gtplaneteers. I'm not one of them.

Passive income is fundamentally different from active income in at least one respect. You didn't directly labor to produce it (by definition). Your property essentially performed the labor to produce it, and of course it is your property, and so you own the fruits of the labor of your property. But it is fundamentally a step removed from your labor. It is your property's property, owned by you because of the transitive properties of property rather than the inherent properties of labor. If your money makes money, your labor did not directly generate that wealth, it indirectly generated it. The link is still there, but there is an extra step.

I think it makes sense to recognize this fundamental difference when it comes to taxation. If you labor to produce $3M. And then you stop laboring and live off of the first million at $60k per year and reinvest the rest, in 10 years you have almost $5M. At that point, you could live off of the first $3M at $180k per year and reinvest the rest to the tune of net worth of $7M in another 10 years. Rinse, repeat. After 20 years, you have generated a net wealth of ~$7M, but what did you actually do yourself? Less than half. Your property has generated the majority of your wealth passively.

The tax rate for this type of income is not as directly, viscerally, harmful.

If we're not going to move to a sales tax model, which would be my preference, we could at least move toward a flat tax model for direct income with a separate, higher flat tax model for passive income. At some point for personal wealth, it becomes nearly pointless to try to labor to produce wealth. You simply cannot out earn your money, at least for many people. This results in people shutting down labor, which is not necessarily a good thing. Better to keep the tax rate low for labor and high for passive income. Balance wealth a little more toward labor and a little less toward investment. The result should be more labor by more people, and greater upward mobility and overall production. Investment will likely not slow down significantly either. Sure, the riskiest investments might not be worthwhile anymore, but solid investments are worthwhile even at a lower effective rate. We've seen that a lot over the last decade.
 
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This notion of passive labour makes no sense to me, as someone who sees finance in the same way I imagine a dyslexic person sees a book. I don't mean personal day-to-day budgeting - if I earn x, then I have to make sure my expenses are less than x - that I can understand. But if you're renting out a property, or investing in stocks (or cryptocurrencies), all that research into where to buy, where to invest, where and when to place and move your money, keeping abreast of all that goes on in the finance world, and maintaining the relationships a successful investor needs to do that - that's labour.
 
Roo
This notion of passive labour makes no sense to me, as someone who sees finance in the same way I imagine a dyslexic person sees a book. I don't mean personal day-to-day budgeting - if I earn x, then I have to make sure my expenses are less than x - that I can understand. But if you're renting out a property, or investing in stocks (or cryptocurrencies), all that research into where to buy, where to invest, where and when to place and move your money, keeping abreast of all that goes on in the finance world, and maintaining the relationships a successful investor needs to do that - that's labour.

It could be, but it's not directly providing the service. It's still indirect. Kinda like you can labor to research how to perform a surgical operation, but the actual performing of it is what gets paid.
 
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