Thursday, November 01, 2007

What if we had the 1979 distribution of income today?

Today's Wall Street Journal has a great line from former Treasury Secretary Lawrence Summers. I'll quote the Journal's Capital column on page A2.

If the distribution of income in the U.S. today were the same as it was in 1979, and the U.S. had enjoyed the same growth, the bottom 80 percent would have about $670 billion more, or about $8000 per family a year. The top 1 percent would have about $670 billion less, or about $500,000 a family.

Wow.

The obvious remedy to this problem of a poor distribution of wealth is to increase taxes on the top 1 percent of families by about $500,000 (don't worry, they won't miss it and they can afford it) and cut taxes on the bottom 8 percent by $8,000 per year.

4 comments:

Doc Steech said...

The distribution of wealth in the country is relatively equivalent to the distribution of talent, energy and entrepreneurial spirit in the country.

To take the wealth from those that generated it through their talent, energy, etc. and transfer it to the least productive in our society is morally wrong and harmful to our economy.

Carl Nyberg said...

doc, tell me what you do that's so productive.

Are you in a profession heavily regulated by gov't?

Perhaps, you do some kind of work where you benefit from wealth and power being concentrated?

Doc Steech said...

Carl, my comment was one of morality, and you want to make it personal.

Why on earth would you assume that I am so terribly productive, anyway? (I'm not terribly productive, but that's irrelevent).

My point is valid from a morality standpoint, and what you are trying to do, Carl, is obfuscate my comment and discredit my point of view by lumping me in with the 'evil' capitalists in this country who defraud the hard working proletariats, or at least according to Karl Marx in his famous work "Das Kapital."

Carl, Communism doesn't play well in most of the U.S. these days, and never really did. If you want to suggest that my point is invalid because I support wage earners keeping the fruits of their labor, then you have been reading way too much of Karl Marx's and Mao Tse Tung's work.

Get a job, Carl (oops, there I go with YOUR tactic, I am assuming you are unproductive currently, my apologies).

Then when the government wants to take a whole fist full of your hard earned dollars and redistribute it to less productive folks in our society, what the author on this site suggests is that "you won't miss it."

markg8 said...

You're not kidding anyone Doc. Just because someone believes anything-goes, laissez faire capitalism rigged by the rich for the rich with the help of their beneficiaries in the Republican party is wrong doesn't make them an adherent of Marx or Mao. Especially these days when Mao's descendants are adopting the worst features of communism and capitalism with the full complicity of fatcats the world over to drive down wages.

Hedge Fund managers don't do a better job of managing money but they only pay 15% taxes on their paychecks because they get to categorize their millions in compensation as capital gains instead of income. CEOs in all kinds of industries get huge compensation packages from their fellow backscratchers on corporate boards whether they are "productive" or not. That's not good for the employees, shareholders or consumers. Those are just a couple of examples.

There's nothing wrong with market capitalism that a healthy dose of regulation and oversight won't cure. Say about 30 years to correct the 27 we've been subjected to since Reagan was elected. It'll take that long to undo the ghastly conservative experiment that began with the Reagan Revolution. Never put people in charge of government who hate government. They tried to prove that government doesn't work and all they've proved is that they can't be trusted to run it.