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Thread: The reason for wealth inequality and why a wealth tax is not the answer.

  1. #1

    The reason for wealth inequality and why a wealth tax is not the answer.

    In Europe the new economic sensation is a french guy named Thomas Pikkety author of capital in the 21st century.

    He talks often about income inequality, which I must say is really out of whack:
    https://www.youtube.com/watch?v=QPKKQnijnsM#t=372
    Here is Piketty itself on the topic: http://www.ted.com/talks/thomas_pike...ry?language=en

    Basically he's saying that the return on investment always outstrips the growth in income, which only was untrue during the interbellum and the follow up rebuilding of Europe/Japan. Now that the rebuilding of Europe and Japan happened, the growth started to wind down and due to this we see wealth inequality on the rise.

    However his solution for this is a wealth tax and thus wealth redistribution.

    I want to counter some of my friends on this topic and point out that monetary inflation through low interest rates and quantitative easing funnel money first to banks and the wealthy which thus means that the wealthy have access to this new money before market prices react to this new money and start to rise. And that this effect is a fuel for wealth inequality and has been exceptionally big in the last 5 years due to the QE of the FED and BOJ and the zero interest rates around the world.

    Does any of you know of good articles, videos or books to refer to when I present my argument?



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  3. #2
    (Bump for visibility)
    "When a portion of wealth is transferred from the person who owns it—without his consent and without compensation, and whether by force or by fraud—to anyone who does not own it, then I say that property is violated; that an act of plunder is committed." - Bastiat : The Law

    "nothing evil grows in alcohol" ~ @presence

    "I mean can you imagine what it would be like if firemen acted like police officers? They would only go into a burning house only if there's a 100% chance they won't get any burns. I mean, you've got to fully protect thy self first." ~ juleswin

  4. #3
    Aha! Found something I'll try:
    https://www.youtube.com/watch?v=iFDe5kUUyT0

    At 16:30

    "The decrease in purchasing power incurred by holders of money due to inflation imparts gains to the issuers of money"

  5. #4
    When was the last time someone got hired by a poor man?

  6. #5
    Obama comes to mind.

    Quote Originally Posted by Ronin Truth View Post
    When was the last time someone got hired by a poor man?
    "Like an army falling, one by one by one" - Linkin Park

  7. #6
    Quote Originally Posted by Ronin Truth View Post
    When was the last time someone got hired by a poor man?
    rich people do not hire poor people , companies hire people , poor people buy from the companies , rich people really buy very little as they have about everything they need .

    the best thing that can happen to help poor people is cheap ult rates and gasoline .

    america has lost 10's of millions of jobs the last 30 yrs because because of the so called free trade and that is why we have so many poor people and no middle class.

    i agree the qe and very low interest rates have not helped the poor , only the very rich , but things like that will never change , they do take care of each other .

  8. #7
    Labor Unions? Let the workers try to negotiate better working terms and pay?

    Or modify the Tax System somehow? I find the argument interesting that enormous amounts of money are wasted in competition between the very wealthy and one possible solution is a Progressive Consumption Tax. It would be almost non-existent for the poor with little to spend on necessities but rise steeply with the more extravagant spenders.

    I kind of feel like something needs to be in place to deal with this wealth gap, but merely redistributing by taxed income seems like a lazy solution. However, I also wonder if even some of the very wealthy feel caught up in their own over-competitiveness.

    For example, if someone spends loads of money on a Superbowl Commercial, their competitors feel pressure to do the same. Sure, all this money is employing people who produce these ridiculous ads, but I think that money could be better spent on something like production, skilled labor, and bring products with real practical value to the economy.

    To get to a point, I'm not saying Tax the Superbowl or something, but I something think the very wealthy like Warren Buffett feel like the wealth gap is ridiculous and needs to be curbed somehow. I do think the OP has a good point since Wealth Redistribution really means sending more taxes to the government which is where money would be wasted even more than being squandered on silly overpriced Sport Commercials. I'd like to see someway that wasteful spending in the private sector could be discouraged. Or if someone if determined to spend frivolously buying multiple houses and yachts than tax that.

  9. #8
    Whether it will last or not, I don't know... but the markets have exploded from the lows of March 2009... Those that were rich before, have exponentially grown their wealth... Especially since they were continuing to invest while the market was at rock bottom...

    Poor people (those effected by the recession) lost jobs, stopped investing, tightened their belts, priorities shifted - which further widened the gap between rich and poor today...



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