Inequality

I have been looking into income inequality as of late. I actually posted about it earlier, and you can find it here. And the information I’ve found now has definitely surprised me. For example, one news article I read, “The Real Causes of Income Inequality” from the Wall Street Journal, cited a statistic that “the United States doesn’t tax its poor as much as in European countries, and . . . if the U.S. spent and taxed like France and Sweden, it would hardly affect the top 10%, who would pay about what they pay now, but the bottom 90% would see their taxes double.”

This is the kind of stuff I never would have expected to discover. A couple articles shared one point that I didn’t know I’d find beforehand: there was a dramatic increase in reported income inequality in the ’80s, but this was the result of rich people like doctors or lawyers incorporating to change the way their income was taxed. One article, “Inequality and Taxes”, stated that “between 1979 and 1988 is that marginal tax rates on individuals stopped being higher than tax rates on corporations” and that “pre-1981…many doctors, lawyers and consultants incorporated to escape the high personal tax rate.” When people stopped this practice, “shifting income from the corporate tax to the individual tax created an illusory increase in top incomes.” In other words, income inequality never took off at all.

Seeing how income inequality was a hot-topic this election cycle, I wish that more nontraditional viewpoints like these became known to most people, instead of, say, whether or not Donald Trump eats KFC with a knife-and-fork or drinks Diet Coke.

This has been my process researching income inequality. I took this topic and did flat searches and have read the basic articles condemning successful people. Then I did searches about their specific points. As I’ve read these reports and news articles, my view has drastically shifted. Partway through this piece, I hit a database and the articles I started reading not only took blame from the successful, but placed it in the hands of the government. It turned into a matter of policy: what the government does and how it handles our taxes holds the biggest effect on inequality, outside of the economy.

Did you know that recessions and depressions are the greatest reducing factor for inequality? I didn’t. In all honesty, I came into this topic looking to justify my biases and am disappointed to say that they’ve been cast away. If you hold yourself as something of an armchair expert on anything subjective, I implore you to do the research. Step up and leave the armchair. I’m working on mine and loving it.

CC BY-SA 4.0 Stepping Up Out of the Armchair by Connor is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

6 Comments
  1. Andrew 1 year ago

    I think you make a great point, people need to actually try and educate themselves more. People get stuck in echo-chambers and never feel the need to go out and challenge their beliefs. Whether you agree with a point or not, I believe we should all absorb media that may not be our norm.
    Great Points

  2. Lily 1 year ago

    I agree about it being great that you expanded your own opinion! However, there are a few things you have said that lead me to question the validity of some of your claims. You said that depressions and recessions are the “greatest factor in reducing inequality”. I’m going to assume you’re talking about income inequality, but nonetheless that is not true. Recessions and depressions are detrimental to the employment rate, inflation rate, and the overall economy, or business cycle. Recessions often occur due to high inflation, which leaves the value of your dollar worth much less. This doesn’t affect the rich nearly as much as the poor. When this inflation begins to recede, unemployment strikes, which often times is worse for the poor than for the rich.
    I like that you expanded, but I think it’s important to look at multiple professional sources before taking them to be accurate and true.

    • Author
      Connor 1 year ago

      Lily,
      Thank you for participating in this discussion. I believe in the importance of diverse discussion, and contrary points of view, such as yours, can only mean well. However, I do not believe that your argument is fair to me or the facts that I present. You described the claims that I presented as “nonetheless . . . not true.”

      To prove to you that my reasoning (and it’s not even mine, this is something I learned from an article that, surprise surprise, I wasn’t expecting to learn–the focus of this post) is solidly based, let’s have an example:

      Suppose there are two people who have cones with scoops of ice cream in them. The first person has a cone with 1 scoop of ice cream in it and the second person has a cone with 10 scoops. Now suppose again that a strong gust of wind comes around and blows half of each person’s ice cream to the ground. Now, one person has 1/2 of a scoop, the other 5 scoops. Where’s before there was a difference of 9 scoops between them, there is now only 4 and 1/2. Inequality has factually been decreased, regardless of how much ice cream either of them have.

      You can’t just say the wind affected the 1-scoop person more than the 10-scoop person, when the second person has literally lost ten times the amount of ice cream. This isn’t a claim about how much ice cream either of them should be satisfied with, merely that the difference between the two counts has been decreased.

      Please do not condemn my claims simply for their stance. Please do not assume my claims are something that they are not. I understand that you have many long-standing prejudices concerning inequality,

      “but I think it’s important to look at multiple professional sources before taking them to be accurate and true.”

      And Just as well, I think it’s important to look past your prejudices and not simply project them.
      Thanks.

  3. Tommy 1 year ago

    Hi, I would really like to read the “one article” that you cited! Hmm, you said you found a lot of research about income inequality that doesn’t exist. However, you only cited 1 article (the other doesn’t have a source). However, I found a trove of articles+ graphs that show that income inequality exists. The New York Times has a nice collection too (http://www.nytimes.com/topic/subject/income-inequality). To find others, just type in income inequality in to google. Its great to get out of our armchairs (we don’t step out of them usually) but we should’ve been out of our comfy armchairs doing things (like raising minimum wage) a long time ago to protect our incomes.

    • Author
      Connor 1 year ago

      Here’s the citation I’m using for that “nonexistent article” you’re mentioning.

      Reynolds, Alan. “Inequality and Taxes.” Cato Policy Report Vol. XXX, No. 5. Sept./Oct. 2008: pp. 1+. SIRS Issues Researcher. Web. 30 Nov. 2016. http://sks.sirs.com/webapp/article?artno=0000284719&type=ART.

      I agree, posting misleading and downright false information can be very destructive to a conversation. However, I would advise you to google that quotation I used, and “Inequality and Taxes” would have been the first thing to pop up. Accusing other people of fabricating their evidence does nothing to add to a discussion, and in my opinion is very reckless of you.

      And if you believe in minimum wage, I advise you learn more about it. Because right now it seems that you’re trapped in an armchair.

  4. Matthew 1 year ago

    This has got to be my favorite post I have ever read on this website. Props to you for not doing what everyone else does and finding information to justify your position, but instead becoming informed on the realities of the phenomenon. I am very interested in this topic and find your insight about governmental policies very interesting. I look forward to looking into this issue more myself, as I plan to become a public policy maker, but the information you have provided is very helpful and enlightening. I would also try to look into time in US history or in other places when income inequality was drastically lower, and see if it would be possible for us to imitate systems like these now.

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