Skip to comments.Income Inequality
Posted on 01/15/2014 1:38:00 PM PST by Kaslin
Democrats plan to demagogue income inequality and the wealth gap for political gain in this year's elections. Most of what's said about income inequality is stupid or, at best, ill-informed. Much to their disgrace, economists focusing on measures of income inequality bring little light to the issue. Let's look at it.
Income is a result of something. As such, results alone cannot establish whether there is fairness or justice. Take a simple example to make the point. Suppose Tom, Dick and Harry play a weekly game of poker. The result is: Tom wins 75 percent of the time. Dick and Harry, respectively, win 15 percent and 10 percent of the time. Knowing only the game's result permits us to say absolutely nothing as to whether there has been poker fairness or justice. Tom's disproportionate winnings are consistent with his being either an astute player or a clever cheater.
To determine whether there has been poker justice, the game's process must be examined. Process questions we might ask are: Were Hoyle's rules obeyed; were the cards unmarked; were the cards dealt from the top of the deck; and did the players play voluntarily? If these questions yield affirmative answers, there was poker fairness and justice, regardless of the game's result, even with Tom's winning 75 percent of the time.
Similarly, income is a result of something. In a free society, for the most part, income is a result of one's capacity to serve his fellow man and the value his fellow man places on that service. Say I mow your lawn and you pay me $50. That $50 might be seen as a certificate of performance. Why? It serves as evidence that I served my fellow man and enables me to make a claim on what he produces when I visit the grocer. Google founders Sergey Brin and Larry Page are multibillionaires. Just as in the case of my serving my fellow man by mowing his lawn, they served their fellow man. The difference is they served many more of their fellow men and did so far more effectively than I and hence have received many more "certificates of performance," which enables them to make greater claims on what their fellow man produces, such as big houses, cars and jets.
Brin and Page and people like them created wealth by producing services that improve the lives of millions upon millions of people all around the globe. Should people who have improved our lives be held up to ridicule and scorn because they have higher income than most of us? Should Congress confiscate part of their wealth in the name of fairness and income redistribution?
Except in many instances when government rigs the game with crony capitalism, income is mostly a result of one's productivity and the value that people place on that productivity. Far more important than income inequality is productivity inequality. That suggests that if there's anything to be done about income inequality, we should focus on how to give people greater capacity to serve their fellow man, namely raise their productivity.
To accomplish that goal, let's look at a few things that we shouldn't do. Becoming a taxicab owner-operator lies within the grasp of many, but in New York City, one must be able to get a license (medallion), which costs $700,000. There are hundreds of examples of government restrictions that reduce opportunity. What about the grossly fraudulent education received by so many minority youngsters? And then we handicap them further with laws that mandate that businesses pay them wages that exceed their productivity, which denies them on-the-job training.
Think back to my poker example. If one is concerned about the game's result, which is more just, taking some of Tom's winnings and redistributing them to Dick and Harry or teaching Dick and Harry how to play better? If left to politicians, they'd prefer redistribution. That way, they could get their hands on some of Tom's winnings. That's far more rewarding to them than raising Dick's and Harry's productivity.
The guy who convinces you that your income is unfair, and to whom you give the power to fix it, becomes king.
You have 10 bucks. Your buddy has a hundred. With your help I extract 10 bucks from your buddy. So now you have 20 to his 80 and I own both of you. You need me to get more from your buddy and he needs me to keep you from mugging him.
I am now your king.
War on women.
Fund a libertarian to split the non-Dem vote.
It’s all obvious but can we defeat it?
“INCOME INEQUALITY” is not in the US TAX CODE IRS,
but “EARNED INCOME” is
“Oct 24, 2013 - EITC, the Earned Income Tax Credit, sometimes called EIC is a tax credit to help you keep more of WHAT YOU EARNED.”
Sorry you SOB Bum Obummer, you can`t have it both ways.
Success or failure or mediocrity are all in between the ears.
He thinks he can, because he thinks he is an emperor and therefor an absolute Ruler, like Nero, or Napoleon Bonaparte were
Who decides what is fair and what is too much inequality? Why do they get to be the ones who decide? And how do they know it? Why not let the free market decide? That will be the most optimal, most efficient, and most beneficial way to produce and distribute.
But how in the world did those “certificates of performance” get changed into the thousands of “certificates of utter non-performance”...
That’s the governments job. It’s magic. Government regulation defying natural laws.
I hope to see conservatives take the bull by the horns on this issue.
I will frustrate liberals to say this, but I am in favor of income inequality. In that, I think it’s fair and right and proper that surgeons earn more than hired help at fast food restaurants. I think it’s fair and proper that skilled building tradesmen such as electricians, get paid more than “gofer” workers at construction sites.
It’s fair and proper that lawyers earn more than someone who does janitorial or housekeeping work.
I welcome this debate that the liberals apparently want to have. I would have to say that I’m in favor of inequality, whereas the liberals want to push this meme that inequality is bad. Why is it bad? Let’s have the debate.
“That will be the most optimal, most efficient, and most beneficial way to produce and distribute.”
We are talking about the government here aren’t we?
How much more ‘income inequality’ can you get than JOBLESSNESS AND SUSTAINED HIGH UNEMPLOYMENT under Obama?
Friend of mine works at Verizon and all they do is complain about the CEO’s salary. Biggest knock on him. They say he can’t do their job troubleshooting circuits. I wonder if they can even comprehend what the CEO actually does?
Income inequality is bad. The congressjerks make more than me. Plus they get perks that I don’t get. Plus they get free healthcare, plus free parking.
Let’s be fair. They should make what I make. They should get the same priviliges as me (none).
Then we’d have income equality.
One good thing about income equality would be simpler tax filing. Everybody makes the same money, everybody pays the same taxes.
Financial elites must laugh and laugh at this, until they cry they laugh so hard.
Of course, of the total number of people actually earning mimimum wage, only a minute fraction of them ever actually attend any “demonstration”.
Because most people realize that are low wage earners definitely desire to earn more than the “minimum”. For most people, minimum wage jobs are temporary and transitional, only part of the household earning picture.
The usual organizers round up their troops and put the “demonstrations” on, while the rest of the world goes on working.
The elites’ news media, of course, uses it as fodder to feed their liberal viewers on the 6 o’clock snews.
Hoyle is Washington's free trade and tax rules where an American corporation [aka person] can ship employees jobs outside the country and cause an unemployment recession resulting in 1% raking in more of the pot than the 99%. Brightness and capability are a plus for the capable but this is a stretch.
If left to politicians, they’d prefer redistribution.
Free Bubble up
These idiots think they can bring about prosperity by spending printed money and picking winners and losers. Classic example is their green energy aptitude and waste versus what should be an economically winning energy plan.
Picking winners and losers is not up to them, the free market system will take care of it. Takers don’t need to be in business helped with tax money and competing with the ‘you did build that businesses’ with a first pig at the trough advantage of being classified as disadvantaged to start with.
Well, you get the drift. sigh
The “us” and “them” attitude. I have a friend that is a retired truck driver, union guy, hopelessly Democrat. He needs to supplement his income with a part time job, “anything” he says. I own a motorcycle repair shop and offered for him to come in for a few hours a week to clean the lifts and the floor. He thought about it and declined because he was afraid it would pose too high of a risk to our friendship being my employee, and proceeded to tell me how labor and management can never get along. And he still doesn’t understand why management pulled down bigger checks when the drivers did all the work.
You are spot on TP! We all have equal opportunity, it’s what we apply to it.
I could never stand a job where I was offered an hourly wage or a salary. It was very limiting. Until I started my own business, I insisted on commission. When I couldn’t get commission, I started my own business.
Only have to work 1/2 days too: 12+ hours a day that is.