Income Inequality - Problem or not?

[mileslunn]

In your country, describe if income inequality is a problem or not, why so.  And if a problem what are the solutions you think your government should take to lower it. 

For mine, which is Canada, I think it is an issue, but not nearly as bad as many make it out to be.  We live right next door to US where it is really bad so many tend to import solutions for an American rather than Canadian problem.  Still a few things can and should be done.

-  Increase housing supply, in particular look to convert offices to condos and apartments as more work remotely to bring down housing prices which are way too high

-  Eliminate deductions that primarily benefit wealthy and serve no purpose in enhancing economic growth.

-  Introduce an inheritance tax of 40% on inheritances over $5 million excluding family farms.  Canada is only G7 without one.

-  Allow First Nations greater control over resources as well as keeping revenue from development to improve standard of living

-  More funding for skills training, especially blue collar communities who are hardest hit by automation

Now policies to avoid

-  Higher top rates, Canada's top marginal rates are over 50% in 8 out of 10 provinces and just below in other two so if anything already too high.  Pushing higher may lower inequality but just drive talent out making use worse off.

-  Wealth tax - very bureaucratic and again just drives talent out while doesn't reduce inequality

-  Fund new programs through economic growth and cutting ineffective ones, not higher taxes or deficits (deficits just hurt poor most when austerity implemented to tame it).

[Schiff for Senate]

A problem, yes. In the United States, there is a lot of income inequality (the richest 1/250 of the population provides 68% of donations to campaigns). But that doesn't mean billionaires should be "illegal," as some Democratic presidential candidates actually suggested, or that the government should impose high taxes on the wealthy simply to penalize the rich for their wealth, and then redistribute that money to the poor in the form of welfare (which must be reformed - many welfare receivers abuse the system). It is a problem, and it may be unfair, but that doesn't mean billionaires should be illegal or penalized for their wealth.

[RI]

I don't tend to view income inequality itself as a problem, but income inequality can be a canary in the coalmine of actual lurking problems. If income inequality arises because of declining upward income mobility or because economic trends are disproportionately taking a toll on the working class, for example, then income inequality may reveal this and alert to the issue.

However, there are certainly examples you can point to where income inequality and even increasing income inequality may not be a problem per se such as if it's the result of rising but uneven upward mobility.

[Benjamin Frank]

In the United States it is a significant problem and more evidence of how the appalling greed of their genuinely wealthy elite is working to undermine American free enterprise.

It is an increasing problem for the supply side - millions of people can't even afford a basic college education which has reduced the labor pool for the increasingly technical jobs required by employers today.

Of course, income inequality has already poisoned the well for support of free trade for tens of millions of Americans.

I agree that billionaires shouldn't be illegal, but they certainly need a government to reign in their excesses, ultimately for their own collective good, if nothing else.

[parochial boy]

Aside from the fact that it's practical effects are to make societies less prosperous, less safe, reduce living standards, worse social cohesion and all the rest... I would also say that the fact that some human beings have a standard and quality of life that is so much better or worse than others is in and of itself something that is morally abhorrent

[Cassius]

Obviously, a society (particularly one in the modern world) with extreme levels of income and wealth inequality is unlikely to be a stable one. On the other hand, inequality is the motor of civilization and always has been. You can have a complex society or you can have equality, you can’t have both. For me the issue is ensuring that those who end up at the bottom of the pile are given sufficient resources to be able to live with some dignity, even if they, ultimately, don’t have access to the opportunities enjoyed by those at the top.

[All Along The Watchtower]

I live in the US. The answers to your questions are quite obvious.

[Del Tachi]

The U.S. is not a terribly inequal society outside of a few, mostly coastal cities in the midst of speculative development bubbles that drive rents into the stratosphere.  Places like Omaha and Chattanooga still exist, which simply demonstrates this is a self-correcting problem in the long run. 

[Benjamin Frank]

The U.S. is not a terribly inequal society outside of a few, mostly coastal cities in the midst of speculative development bubbles that drive rents into the stratosphere.  Places like Omaha and Chattanooga still exist, which simply demonstrates this is a self-correcting problem in the long run.  

Completely wrong

From wiki:
When measured for all households, U.S. income inequality is comparable to other developed countries before taxes and transfers, but is among the highest after taxes and transfers, meaning the U.S. shifts relatively less income from higher income households to lower income households. In 2016, average market income was $15,600 for the lowest quintile and $280,300 for the highest quintile. The degree of inequality accelerated within the top quintile, with the top 1% at $1.8 million, approximately 30 times the $59,300 income of the middle quintile.

This is also a measurement of income, not wealth, where the inequality is even more extreme.

It's also not really true anymore that it's easy to move up the 'income ladder.'

http://www.equality-of-opportunity.org/assets/documents/abs_mobility_summary.pdf

We measure absolute mobility by comparing children’s household incomes at age 30 (adjusted for inflation using the Consumer Price Index) with their parents’ household incomes at age 30. We find that rates of absolute mobility have fallen from approximately 90% for children born in 1940 to 50% for children born in the 1980s. Absolute income mobility has fallen across the entire income distribution, with the largest declines for families in the middle class. These findings are unaffected by using alternative price indices to adjust for inflation, accounting for taxes and transfers, measuring income at later ages, and adjusting for changes in household size.

[courts]

by and large i would agree with this. i would add earn while you learn type programs and subsidized daycare (probably) to the list

[Senator-elect Spark]

A huge problem. When you have people that are extraordinarily wealthy at the top of society dictating how things should be run in our country, and the majority of ordinary people being unable to make ends meet. That is not a fair system whatsoever. We need income redistribution.

The obstacles to this is that the Supreme Court has never seemed to consider income inequality as an important issue threatening the constitutional stability of our republic. Dr. Linder of the University of Missouri-Kansas City School of Law poignantly noted,

“While the Court has used the Equal Protection Clause to strike down financial roadblocks to the ballot and to equal justice, the Court has been unwilling to see the Constitution as establishing any obligation on the part of government to establishing a minimum level of housing, welfare, or education to all of its citizens”.

[GregTheGreat657]

Yes, especially with the massive wealth redistribution that was the pandemic.

[John Dule]

There will always be inequality (as there should be), but problems arise when the public starts to believe that the system is rigged against them. Unequal social structures are fine, but you need to have inclusive economic institutions to go along with them in order to keep people invested in their communities and society. In my opinion we're already well past that point.

[CEO Mindset]

depends on how ridiculous the inequality is and how one gets the money

[HisGrace]

Poverty is a problem, income inequality is not. The fact that someone else is a billionaire does not make you automatically worse off. Saying otherwise is just pandering to envy.

[CEO Mindset]

billionaires only exist due to government rigging/regulations so yeah, someone whose a billionaire existing in your country is a sign something's deeply wrong

[beaver2.0]

I don't think income inequality is necessarily a problem.  There will always be some people that are paid more than other people and I am fine with that.  As others have said above, it is only a problem when it gets to extreme levels (something that is hard to quantify)

[CEO Mindset]

being paid more for having connections w/ the boss is fine with me it's people earning more than others for spending more time at the office/sucking up/scamming aka "hard work" that pisses me off

[HisGrace]

being paid more for having connections w/ the boss is fine with me it's people earning more than others for spending more time at the office/sucking up/scamming aka "hard work" that pisses me off

Bolded is a rare example of someone on the left being honest about what he believes for once (why is this person a blue av?)

And of course amidst all the whining about the "structural unfairness" of capitalism you have to carve out an exemption for nepotism because then what would all those liberal Ivy Leaguers do.

[CEO Mindset]

im not "left-wing"