Tax changes / proposals - discussion

Its not exactly significant. But if you say the 5% is average joe blue collar types I think that paints an unrealistic and inaccurate picture.

The 5% is just as much fat cat business owners with a monocle and top hat as it is a married couple of blue collor workers.

Yes theres some rare literal blue collar workers in the top 5%. I’d submit that they’re probably rarer in the >250k income levels than pro athletes or actors.

No, the top 5% is really not blue collar nor middle class.

I don’t understand. I was asked who the top 5% are “winning the growing income divide.” I provided a factual answer describing most of the households that comprise the top 5%. What exactly is the issue or the disagreement?

Yes

But income inequality always exists and is natural. THats not a problem.

We’re talking about increases in income inequality which is related to the stagnation of wages for lower earners.
They’re related since income inequality is increasing because the highest earners are seeing growth while the bottom half isn’t. If everyone saw the same wage increases over the past 3 decades then income inequality wouldn’t have gone up.

New York city or San Francisco or Silicon valley ?

People living in the highest income areas need to recognize thats not normal.

No. Most of the top 5% is not blue collar workers or pediatricians.

Thats my argument with your answer.

If it’s not significant, then why did you take an issue with my post in which I described the vast majority of those in the top 5%?

[quote]But if you say the 5% is average joe blue collar types I think that paints an unrealistic and inaccurate picture.

The 5% is just as much fat cat business owners with a monocle and top hat as it is a married couple of blue collor workers.[/quote]
When those “fat cat business owners with a monocle and a top hat” make just under $215K, then sure, they’re in the top 5%.

The very reason that under Obama the taxes were raised on the households making $250K and above, as opposed to those making significantly larger incomes, is because relatively few households out there make those gigantic eye popping numbers that you tend to see mentioned. Hence, although the rhetoric always focused on the “fat cats” and the “millionaires and billionaires,” the tax increase was passed on those who were making a fraction of those amounts. They just weren’t mentioned in any of the pro tax increase rhetoric, because it’s a lot easier to highlight the very few “fat cats” that are out there than much larger number of married pediatricians and engineers whose taxes were actually impacted by the increase.

You aren’t answering my question though. Wouldn’t “wage stagnation” be a problem regardless of whether income inequality existed?

If those in the top 1%, or whatever other percentage you want to use, had their taxes increased by 50%, would the carpenters’, waitress’, teachers’ and nurse’s aid’s career opportunities improve?

What if those top 1%, or whatever other percentage you want to use, were simply making half as much as they are. would would the carpenters’, waitress’, teachers’ and nurse’s aid’s wages be any less “stagnant?”

Again, I think that we should continue to work on improving their opportunities regardless of whether the top 1% make just as much as they do now, or half as much as they do now.

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Yes

I did say yes.

Wage stagnation is the problem I see.

If the top 1% of earners saw 20% increases while the bottom 99% saw 10% increases then I woudln’t consider this a problem. I dont’ consider it a problem alone that the top 1% sees high increases in income but combined with the bottom 50% seeing no growth, thats a problem.

Sorry, I didn’t mean to be ignoring your post. I was just trying to get to it.

I did read the article, which is about is ideological as they come, but it still does not support your statement. If those in the top 1%, or whatever other percentage you want to use, had their taxes increased by 50%, would the carpenters’, waitress’, teachers’ and nurse’s aid’s career opportunities improve?

What if those top 1%, or whatever other percentage you want to use, were simply making half as much as they are, would the carpenters’, waitress’, teachers’ and nurse’s aid’s wages be any less “stagnant?”

Again, I think that we should continue to work on improving their opportunities regardless of whether the top 1% make just as much as they do now, or half as much as they do now.

Sorry, I didn’t see your answer.

So, if wage stagnation is the problem, and it would be a problem even if there was no income inequality, then why don’t we focus on wage stagnation?

How does improving opportunities result in wage growth for the bottom half of the nation?

What kind of opportunity?

OK. sure. Thats what I see as a problem.

What causes that and how to fix it?

This is not an accurate statement becase “household income” is a very narrow (and imperfect) measure of success.

  1. Looking at household income data over a period of time without acknowledging changing household demographics doesn’t make for great comparisons. How many people were in each household in 1975 compared to now? How many people in each household worked compared to now? How many had a specific level of education? How many grew up or currently speak English as a second language.

  2. Referring to household income alone without acknowledging changing prices and technological improvements doesn’t tell you much. The average hourly wage of production and nonsupervisory employees in 1975 was ~$4.20/hr. In 2017 it was ~19.22/hr. According to the CPI inflation calculator, the hourly wage has gone down. But that doesn’t tell much of a story until you look at prices of consumer goods. Open up a 1975 Sears catalog and compare it to the current Sears website. Compute how many hours the average worker had to work back then compared to now to buy the same thing (which is often not even technologically feasible). Here are a couple examples:

Athletic shoes: 1975 - $9.95 (2 hrs), Today, there are 4 pairs for $9.98 (.5 hr) and a dozen pairs for $19.95 (1 hr)
19" Color TV: 1975 - $294.95 (70 hrs), Today (the smallest you can go is 24" not to mention all the other improvements over the 1975 version) - $109.99 (6 hrs)
30" Electric Range: 1975 - $159.95 (38 hrs), Today - $349.99 (18 hrs)
Refrigerator (~14 cu. ft.): 1975 - $319.95 (76 hrs), Today - $399.99 (21 hrs)

And, of course, you can’t run this example for smart phones, laptops, voice controlled assistants, and the hundreds of other affordable products we own today that didn’t even exist in 1975.

In this sense, there is much less CONVENIENCE and ENTERTAINMENT inequality today than there was in 1975. Sure income inequality has gone up, but how much does that actually matter when you ARE sharing in the same success that wealthy people are feeling over the past 4 decades.

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Yes thats a very good point.

Today there are more income earners per household than there were in the 70’s.
But at the same time there are more income earners in the higher income %’ groups versus lower income.

So on one hand if you look at median income things are worse since median income households today have more people working and relatively flat real income versus the 70’s.
But the increases in income for high income earners is potentially also due to more income earners in higher income households.

No the cost of tennis shoes has little to do with anything.
clothing is cheaper relatively speaking. But that savings was more than eaten up by increases in health care and housing costs.

Thank you for asking, as I think that most people mean to focus on these exact questions, but instead get confused by all the campaign rhetoric and start to define progress on this issue or the lack thereof by how much less than make than some billionaire, which then causes them to lose sight of the actual problems and solutions.

With an Olympic athletic, if you have the same start and finish, the fact that a superstar, whether because of incredible hard work, pure natural athleticism or some combination of those factors, gets to the finish line three times as fast as the slowest competitor, is not a problem, and we don’t need to slow down the superstar in the name of reducing “athletic inequality.”

In general, economic outcomes should work similarly. If you and I have access to the same educational tools, but you, either because of incredible hard work, pure natural instincts or some combination of those factors, end up being way better than me at something, then I believe you should be rewarded accordingly. It also doesn’t mean that I should be cast aside, as my contributions can still be important and valuable, but I also think that I should take responsibility for the choices that I make that get me, or do not get me, to a certain point.

In other words, if a person has always disliked schooling, and/or was otherwise unwilling to do what it’d take to become a cardiothoracic surgeon, then I do not think that the latter should be asked to give more of his/her income to the former just because the latter now makes a lot more. On the other hand, if a person has always wanted to become a cardiothoracic surgeon, was always willing to work hard to get there, but was forced to become a carpenter because, for instance, he/she did not have access to the same educational tools, could not afford to go to (a better) school, felt that he/she had to drop out to support his family, etc., then this is something that we should continue to try to fix.

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OK. I don’t disagree with any of that.

But again what kind of opportunity are you suggesting to help the bottom half gain increased wages?

Theres always going to be a bottom half. We can’t give everyone in the bottom half a hand up to join the top half.

Correct me if I’m wrong but it sounds like you’re suggesting that educational opportunity would help. I think we’ve been trying that by telling every kid to go to college and its not been helping.

It’s like I always tell the children in my family, the best and probably only way you will become wealthy is by marrying into money. They weren’t born into it, and even if you are very smart, talented, or hardworking, you are unlikely to make a lot of money from that just by looking at the numbers.

You can focus on an individual. Helping that carpenter get into med school will help that carpenter.

But wage stagnation for the bottom half is not an individual issue and impacts 50% of the workforce. Its the jobs and the nature of the jobs. The bottom half of the jobs in the US pay what they pay for the jobs that they are.
How do our carpenters, waitresses, nurses aides, etc get wage increases?
Find them better jobs? Where do those jobs come from?

How do the bottom half of jobs get better wage growth?

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Is that a Homer Simpson quote?

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Yes. And since we are discussing the top 5% or 1% it should be recognized that most of us live in these HCOL areas, so normal for us. I dont have a data point to share on this, but by reason of cost, desirability, and urban density would guess as much