# "How To Fix America's Wealth Problem"



## MoneyGal (Apr 24, 2009)

"In the short run, _wealth_ equality is closely tied to _income _equality. *But in the long run, it's all about thrift, frugality, and saving -- in other words, cheapness*. If America's middle-class and poor people learn to be more cheap, then in 30 years, we will see a very different distribution of wealth."

http://www.theatlantic.com/business...nequality-teach-americans-to-be-cheap/273940/


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## none (Jan 15, 2013)

I agree with the first commenter on that article. That article is rediculous.

_"This is absurd. The real wealth gap is based in capital gains, not direct income. Teaching Americans to be frugal is not going to address any of the systemic differences that make it easier by orders of magnitude for the already rich to keep making money.

The conclusion of this article, that "If America's middle-class and poor people learn to be more cheap, then in 30 years, we will see a very different distribution of wealth," is not simply wrong, it is disingenuous.

Learning sound financial strategies would be good for the middle-class and poor. But it will not significantly alter the distribution of wealth in this country. The financial system is designed to privilege the growth of existing wealth, not encourage new wealth. The difference between tax rates on income and tax rates on capital gains is only the most obvious evidence of that."_


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## andrewf (Mar 1, 2010)

This is not a very compelling editorial. A lot of it is hand-waving. I don't disagree that creating a culture of 'cheapness' would probably help poor and middle class people improve their financial positions, but I'm not sure how realistic it is.


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## OptsyEagle (Nov 29, 2009)

The problem most miss is that the actual definition of wealth is ...the difference between the rich and the poor. If there was no difference, there would be no wealth.

The money you have in your pocket is only useful if you can convince someone else to either do something for you or give you something that is theirs. If they had as much money as you, why would they do this?

The only way the poor can be wealthier is if the rich get wealthier. Put another way, we need to increase the size of the overall pie in order for the poor to get a bigger piece. If we simply try to slice off some of the rich peoples pie and give it to the poor, this inflationary act will simply reduce the size of the overall pie.

I could go on forever, but my point is that capitism, by its very nature, only works if there is a disparancy in the wealth of the population. The bigger the difference the better it works. To even things out, it's called communism. Communism acts to reduce the size of the overall wealth pie and presto, everyone gets poorer...especially the poor.


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## andrewf (Mar 1, 2010)

I don't think anyone (or most people) would want perfect income equality. But I think many people would agree that too much income inequality is bad, too. It tends to end up with rich people's heads on pikes.

We need to find a happy medium, in other words. We're towards the US/developing world end of the income inequality, with the other extreme being Nordic countries, with developed welfare states. They still manage to have pretty dynamic economies.


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## Toronto.gal (Jan 8, 2010)

I prefer this version:

'To improve the situation, the have-nots must become the do-somethings.'

http://www.forbes.com/sites/maurape...-the-have-nots-must-become-the-do-somethings/


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## none (Jan 15, 2013)

Agreed. the whole we need the rich to get richer in order to lift up the poor (i.e 'a rising tide lifts all boars) has been an abject failure and has shown to not be supported by empirical evidence.

The whole "Job creator" sound bite popularized by fox news also has very little evidence to support it. Jobs are created because of increased product demand, not the other way around.

you need weathy customers not wealthy owners.


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## sags (May 15, 2010)

The "pie" has been getting bigger, but despite tremendous gains in productivity and growth of the economy, worker incomes have not kept anywhere near pace with those gains. .

A recent study concluded that if wages in the US had kept up with productivity........the minimum wage should be 22.00 per hour...........not 7.50

The whole idea that poor and low income workers can pull themselves up........by saving money they never had..........is a ridiculous premise.

By the time "the pie" gets to the workers............there is nothing left on the plate.


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## 1.5M (Apr 21, 2012)

A beginning to solving the problem would be to have progressive taxation extended to the rich (not only for poor level incomes, up to a little more than 100k, as is now). Also taxing speculation income ("capital gains") at the same rate as working income. However this will never happen as the rich controls the government (in US and everywhere) so the laws favor them by default. 

The working poor (the majority of the population) are a little more than indentured servants. The only way out is indeed to save most of their earnings instead of giving them back to the rich (by buying all the crap they are selling). Unfortunately saving is not enough and they also need to learn to "invest" (really speculate) in the financial markets (which in the end is dangerous because those are also designed to take money from the working investor and transfer to the professional speculator).


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## MoneyGal (Apr 24, 2009)

Geez. I feel as though all y'all read a totally different article than the one I posted.


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## none (Jan 15, 2013)

I think it's pretty lame how the author pulled out the 'socialism boogyman'. Pure socialism? Not so great but really it's a heck of a lot better than unshackled capitalism.

If you look at stats on life quality and infant mortality rates (which I think are better measure of the 'success' of an economic system rather than just $$$) it's the countries that fall much farther to the left of socialism and have much less income disparity between the rich and poor.

http://en.wikipedia.org/wiki/Quality-of-life_Index
http://en.wikipedia.org/wiki/List_of_countries_by_infant_mortality_rate (US is 34 & Canada is 24)


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## OptsyEagle (Nov 29, 2009)

MoneyGal said:


> Geez. I feel as though all y'all read a totally different article than the one I posted.


Actually, I didn't read it at all. Unless they were going to suggest something like reducing the corporate tax rate for wealthy business owners or something like that, which I doubted, then they were on the wrong track.


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## 1.5M (Apr 21, 2012)

MoneyGal said:


> Geez. I feel as though all y'all read a totally different article than the one I posted.


Actually, I specifically agreed with the article's advice. However I don't think it will fix America's wealth inequality problem and here is why: if everyone stops buying crap (and overpaying for mortgaged housing) lots of businesses will go bankrupt and this will lead to everybody being poorer, but the huge inequality will still remain. The advice offered in the article works only if few people apply it and it works by moving those people out of the working poor class.

The redistribution solution is a red herring and I agree it does not solve the issue. There would be no redistribution needed if the original distribution of common costs would be fair (i.e. progressive taxation for rich not just for the working poor). 
To give an example: the rich are the ones profiting from wars (they have direct investments in the companies involved, they benefit the most from lower resource costs, they gain new markets, etc.). However they are not paying all the associated costs of maintaining the over-sized military and doing the actual fighting. 

A fair and real solution would be to lower the taxes paid by the working poor (including to negative values) and have progressive taxes with increasing rates well into millions and tens of millions, not stopping the rate increase at a little over 100k. Then as a side effect, the government can be removed from the business of redistribution, at which it is terrible.


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## peterk (May 16, 2010)

I agree entirely with the article. Savings rates have gone from 8-10% in the 60 and 70s, to 2-5% for the past decade. http://upload.wikimedia.org/wikipedia/commons/8/89/US_personal_saving_rate_1960-2010.jpg

As much as the bankers, outsourcers, and government backed corporatists are to blame - wasters, credit abusers, too-big-morgtage takers, lazies, and "victims" are equally to blame for their own mess.

Until the "poor" understand that social benefits are a REWARD for a nation that has decades of prosperity and productivity under its belt, and that you can't simply vote yourself more money indefinitely, the trend of tweeting "why am I so poor" from your iphone 5 will continue. Eventually, of course, a critical tipping point will be reached, social benefits will be withdrawn, the poor will get MUCH poorer, and the western world will have to rebuild from the socialist ashes. 

But I'll be sitting on a beach somewhere in Asia by the time all that happens, so, whatever


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## MoneyGal (Apr 24, 2009)

peterk said:


> But I'll be sitting on a beach somewhere in Asia by the time all that happens, so, whatever


This. I probably won't be sitting on a beach somewhere in Asia (I did an awful lot of that already in my life!) but I'll be "sitting pretty" somewhere. And although I will have earned a lot of money over my lifetime, I also save a frick fracking lot of it, and that is what is making me wealthy, and I truly wish the basic math of this equation was better understood.


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## none (Jan 15, 2013)

peterk said:


> Until the "poor" understand that social benefits are a REWARD for a nation that has decades of prosperity and productivity under its belt, and that you can't simply vote yourself more money indefinitely, the trend of tweeting "why am I so poor" from your iphone 5 will continue. Eventually, of course, a critical tipping point will be reached, social benefits will be withdrawn, the poor will get MUCH poorer, and the western world will have to rebuild from the socialist ashes.


I would change this from insufficiently constrained capitalist ashes but whatev...


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## My Own Advisor (Sep 24, 2012)

I fail to see how Americans becoming more frugal, especially the Americans that are poor, will address a systemic issue.


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## MoneyGal (Apr 24, 2009)

But it's a separate issue (fortunately or unfortunately). If we can't magically make everyone lottery winners (just as one ludicrous example), what could we do to better peoples' individual fortunes? Relying on and waiting for systemic change is not the only way forward.


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## My Own Advisor (Sep 24, 2012)

Totally agree some cheapness will help.


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## arrow1963 (Nov 22, 2011)

So what happens if everyone saves their money?

???

That's my problem with this article. Any calculation that involves a 'poor' person getting to be 'rich' is going to involve a calculation of the form 'at 10% interest over 40 years, your "dollars per month" grows to be 'amazing!!!". That 10% was 12% in the 90's, and now it might be 8%, or there will be some reference to the 20th century US market return.

I hate it when people are overly influenced by the recent past, and I hope not to fall into that trap. But the authors that I respect are talking about 30 year returns in the range of 2% real after tax (http://wpfau.blogspot.com.au/2013/02/compound-interest-and-wealth.html) for a balanced portfolio. Compounding doesn't do a lot for you there, and the $5000 that a low earner with a really strong frugality muscle might be able to save will grow to $10,000 (real) over 35 years.

At those rates of return, poor people can work towards financial independence, if they're always willing to spend some fraction of their low income. However, they can't aspire to save enough to have a higher standard of living. Being frugal, spending only a portion of what you make, and investing the difference can lead a *person *to wealth. However, when we move from advocating that for 'a person' to '1/2 of society' there are systemic effects. We're already seeing the impact of low bond yields on investment returns now. How low would they be if everyone was trying to invest 25% of their income into the same pool of CDN equities and fixed income products?


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## MoneyGal (Apr 24, 2009)

But don't you think these are great conversations to have? I guess I'm excited by the rhetorical question.


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## 6811 (Jan 1, 2013)

The company I worked many years for had a deferred profit sharing plan (DPSP) that would match your RRSP contributions for up to 4% of salary. Free money right? Well I thought so too until I asked one of the guys why he wasn't taking advantage of this "perk". Turns out he was the single parent of two young daughters and would lose his subsidized daycare if he took advantage of it. 

It's real easy to talk about how the poor could be more frugal by putting aside a percentage of their income for the future. Pretty tough when you're literally living paycheck to paycheck.


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## jcgd (Oct 30, 2011)

I don't understand the issue of the wealth gap. Isn't it simple compounding showing itself? Of course the gap is widening, that's what's supposed to happen. The same reason most of us seem to get further and further ahead of our peers. We save more, we make more on that and so on.


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## donald (Apr 18, 2011)

Id mark down a Big one from advertiser's--Companies/banks ect spend millions and millions to brainwash society(that will never change).Buy this you will look ''younger'',''fitter'' ect.Buy this you will have more''friend's''ect(marketing and the human mind)---Bns bank---(your poor as hell but let us ''tell'' you,your richer than you think.
I've been ''living'' frugal for quite sometime on a middle class income and i can tell you it takes mental fortitude and a honest(no wishey washey)desire and fore thought everyday to carry on.Most people rich or poor do not have the character or mental landscape to ''fight the fight'' and would rather just go for the path of least resistance-That right there is why the poor and middle class will never break away(few people are comfortable doing things remarkable different than their social ''class'' they were born into)--being frugal/saving/investing ect is not some ''easy'' task in and of it self-and like another poster said-investing is a loaded subject(unforgiving as hell and easy to make hundreds of mistakes which cost money)it all adds up to ''why bother''


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## arrow1963 (Nov 22, 2011)

It might also be useful to remember what might be meant by 'rich' in the USA.

http://economix.blogs.nytimes.com/2012/01/17/measuring-the-top-1-by-wealth-not-income/

The threshold (minimum entry) into the 1%:

$380K/year by household income

$8.4 Million by wealth


Saving and investing on a median-ish income can give you financial freedom. It won't buy you entry into the 1% (and offers limited potential for reducing inequality).


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## financialnoob (Feb 26, 2011)

What more do the poor need or expect???


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## lonewolf (Jun 12, 2012)

The old adage "the poor will always be with us" seams to have stood the test of time.

I dont want to be the poorest man on the block so my standard of living can be higher. It takes a lot of money to live like a king in Beaverly Hills compared to living in cheaper locations where your money goes farther. Of course there are times you dont want to be the richest kid on the block i.e., such as when the masses burn the bankers @ the stake.


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## brad (May 22, 2009)

peterk said:


> I agree entirely with the article. Savings rates have gone from 8-10% in the 60 and 70s, to 2-5% for the past decade. http://upload.wikimedia.org/wikipedia/commons/8/89/US_personal_saving_rate_1960-2010.jpg


Yes, but for good reasons:

*Housing, health care, and education cost the average American family 75% of its discretionary income in the 2000s, compared with 50% in 1973.
*The price of health insurance in the US doubled between 2001 and 2011, while also requiring higher deductibles and co-payments.
*The cost of raising children in the US increased by 40% between 2000 and 2010.
*Medical bills factored in 62% of all bankruptcy filings, with other causes being job loss, foreclosure, and divorce.

All of this while household incomes were falling:

*The median income for families aged 35-44 fell by 14% between 2001 and 2010.

(Source for all these data: "Pound Foolish," by Helaine Olen, published earlier this year).


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## andrewf (Mar 1, 2010)

Do people still think refrigerators are a luxury? I would say a cell phone or computer is a luxury, not a refrigerator.


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## Nemo2 (Mar 1, 2012)

andrewf said:


> Do people still think refrigerators are a luxury? I would say a cell phone or computer is a luxury, not a refrigerator.


On the one hand, the 'Poverty Industry' likes to maintain a moving target, so that there will always be a 'clientele' available for them to (ostensibly) lobby for......on the other end of the spectrum are those that consider anything above 'true' (3rd worldish) poverty, (or perhaps that which their parents/grandparents never had), to be extravagance.

Regardless of the definition, the overall problem is that almost nothing, (including warfare, which is a much utilized historical method of reducing the mortal surpluses), is highly labour intensive any more....there is no longer a requirement for a mass unskilled/semi-skilled...or even skilled in many areas.....workforce.


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## financialnoob (Feb 26, 2011)

andrewf said:


> Do people still think refrigerators are a luxury? I would say a cell phone or computer is a luxury, not a refrigerator.


Just Fox News. :cower:

I don't think anyone is disputing that all people are not created equal and those who work harder deserve to do better. At the same time, I honestly believe an adult who works any job full-time should be able to support themselves, which they currently cannot in America.

I'd love to have a reasonable and well-articulated discussion on it without extremists on the left and right bashing each other and calling each other commies and fat cats. There may not be a perfect solution, but that doesn't mean we can't do better. There are exceptions and outliers on pretty much everything, but we shouldn't be treating them as "fact" or be as misguided as to believe it's a simple solution with one simple change being all that is required. It's a complex problem that requires complex discussion, a willingness to read material that maybe we do disagree with to broaden our knowledge. If all we believe is one thing and all we do is read opinions that agree with that and disregard everything else, it isn't really helping.

Income Inequality: 1 Inch to 5 Miles



> The average increase in real income reported by the bottom 90 percent of earners in 2011, compared with 1966, if measured at one inch, would extend almost five miles for the top 1 percent of the top 1 percent.
> 
> Incomes and tax revenues have grown from 2009 to 2011 as the economy recovered, but an astonishing 149 percent of the increased income went to the top 10 percent of earners.
> 
> ...


I can imagine some people have no idea why it matters if poor people are poor or there are more poor people. The immediate assumption may be that they're just wasting their money on alcohol and drugs and buying big-screen TVs. There are studies that show 60% of bankruptcies are caused by medical debt and well, maybe people shouldn't get sick (as if anyone chooses this). Even if you believe this all to be true, it still has an impact on the economy in numerous ways.

The IMF has released a report about the impact of income inequality on the economy:

Equality and Efficiency


> In recent work (Berg, Ostry, and Zettelmeyer, 2011; and Berg and Ostry, 2011), we discovered that when growth is looked at over the long term, the trade-off between efficiency and equality may not exist. In fact equality appears to be an important ingredient in promoting and sustaining growth. The difference between countries that can sustain rapid growth for many years or even decades and the many others that see growth spurts fade quickly may be the level of inequality. Countries may find that improving equality may also improve efficiency, understood as more sustainable long-run growth.
> 
> Inequality matters for growth and other macroeconomic outcomes, in all corners of the globe. One need look no further than the role inequality is thought to have played in creating the disaffection that underlies much of the recent unrest in the Middle East. And, taking a historical perspective, the increase in U.S. income inequality in recent decades is strikingly similar to the increase that occurred in the 1920s. In both cases there was a boom in the financial sector, poor people borrowed a lot, and a huge financial crisis ensued (see “Leveraging Inequality,” F&D, December 2010 and “Inequality = Indebted” in this issue of F&D). The recent global economic crisis, with its roots in U.S. financial markets, may have resulted, in part at least, from the increase in inequality. With inequality growing in the United States and other important economies, the relationship between inequality and growth takes on more significance.
> 
> ...


None of this is to suggest I have any clue what the heck to do to make things better. But it does suggest that there is enough reason here to make us want to do better. The answers are not as simple as some make them out to be, but nothing worth doing is really easy.


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## MoneyGal (Apr 24, 2009)

I also don't understand the pull towards discussing the top 1% and the bottom 1%. There is a huge middle ground in between and after decades of working with people and their money directly, it is abundantly clear to me that many, many people could benefit from understanding some of the basic math set out in that article, perverse incentives towards poverty notwithstanding.


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## peterk (May 16, 2010)

I suppose Brad, but:

How much of the housing increase is from "needing" 2000 sqft instead of 1200? Keeping the temperature at 20 year round instead of 25 in the summer and 18 in the winter? Or updating the kitchen, bathroom and floors every 5-10 years instead of 15-20?

How much of the healthcare increase is from illnesses related to eating poorly and not exercising? Dentist visits 2-3 times a year? Children being treated for physical and mental health issues by doctors when all they need is to play outside and have parents take responsibility for their kid's mental health, teaching them to be strong-willed?

How much of the childcare increase is from excessive child safety gear? school trips out of province? new clothes and themed binders every year? lunch money instead of lunches packed? iPhones? vacations to cuba instead of vacations to see grandma?

I don't know if these changes make up for ALL of the increase in cost of living and an inability to save, but it's got to be a good chunk.


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## brad (May 22, 2009)

peterk said:


> How much of the childcare increase is from excessive child safety gear? school trips out of province? new clothes and themed binders every year? lunch money instead of lunches packed? iPhones? vacations to cuba instead of vacations to see grandma?


:

Details of the findings are at http://money.cnn.com/2011/09/21/pf/cost_raising_child/index.htm, but the bottom line is that we're just talking about the basics here, not iPhones and "excessive gear."



peterk said:


> How much of the healthcare increase is from illnesses related to eating poorly and not exercising? Dentist visits 2-3 times a year? Children being treated for physical and mental health issues by doctors when all they need is to play outside and have parents take responsibility for their kid's mental health, teaching them to be strong-willed?


We're talking about the cost of health insurance here, not healthcare per se; see http://www.nytimes.com/2011/09/28/b...costs-rise-sharply-this-year-study-shows.html. "The unexpected increase in premiums raises questions about whether health care costs are, in fact, stabilizing at all, as people have postponed going to the doctor or dentist and have put off expensive procedures."

I'm not saying that "learning to be frugal" isn't a big part of the what needs to happen. It obviously is. I'm just saying that it's more complicated than that because there are many factors at play. Anyone who thinks the "wealth problem" can be solved simply by teaching people how to live more cheaply either hasn't done their homework on the situation in the United States or has drunk a bit too much ideological Kool-Aid.

Health costs are a big one in the US, one that we don't generally have to deal with here.


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## MoneyGal (Apr 24, 2009)

brad said:


> :Anyone who thinks the "wealth problem" can be solved simply by teaching people how to live more cheaply either hasn't done their homework on the situation in the United States or has drunk a bit too much ideological Kool-Aid.


But has anyone here suggested that? Even the article doesn't say that. What it says is that retained income is the product of four factors: how much you earn, how much you keep [i.e., after taxes], how much you save, and the returns you realize on your savings. 

Most of the stuff I've read on income inequality suggests that the first and second factors are the largest contributors. But what if they aren't? Just like most of what I read about retirement income planning focusses on investment yield, when _how much you have saved _ (and thus the fraction of your wealth that you withdraw each year in retirement) is a hugely more important factor in determining your overall readiness and financial success through retirement.


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## brad (May 22, 2009)

Maybe nobody here has suggested that, but there's a whole industry of financial self-help gurus and books that essentially deliver the message that you can solve your financial woes simply by not drinking your daily latte or living like "the millionaire next door." Helaine Olen skewers those folks in her book, which is an interesting read, if a little tedious.


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## none (Jan 15, 2013)

MoneyGal said:


> I also don't understand the pull towards discussing the top 1% and the bottom 1%. There is a huge middle ground in between and after decades of working with people and their money directly, it is abundantly clear to me that many, many people could benefit from understanding some of the basic math set out in that article, perverse incentives towards poverty notwithstanding.


Because the top 1% are claiming more of the total pie at a faster rate than the other 99%. It is even worse for the 0.1% or even worse the 0.01%.

Is this equitable or fair? No it's not and it only leads one place ultimately. A place both the rick and poor wouldn't enjoy very much.










And this: http://www.salon.com/2013/03/25/incomes_of_bottom_90_percent_grew_59_in_40_years/


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## 1.5M (Apr 21, 2012)

There is almost no middle class. Is just the rich with incomes over 1M/year and net worth over 10M and the poor with incomes below 200k/year and net worth below 2M. Middle class should be the incomes between 200k to 1M/year. Where is that class? Everything is skewed in favor of the rich and the sad part is that even some poor people who are working hard and saving don't realize they are still part of the working poor class and most likely will be their entire lives.


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## peterk (May 16, 2010)

200k/year is poor?
1m/year is middle class?

Huh?


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## 1.5M (Apr 21, 2012)

peterk said:


> 200k/year is poor?
> 1m/year is middle class?
> 
> Huh?


Not according to the official definition. But when the rich make tens of millions a year, why someone making 1% of that be classified as middle class? 
It's middle by the number of people, not by income. If you use that definition, then you'd have middle class in developing world earning $1000/year. So the definition of middle class should be based on middle income.
If middle class would really be $50k-$300k/year, then the rich should max out at $10M, everything above that should be taxed at 90%.


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## sags (May 15, 2010)

I wonder how many people are in the 1% inherited their wealth.........and did absolutely nothing themselves to earn it.

That's the thing about wealth.

Once you have it...........you can earn much more of it, actually doing nothing.

You can then pass it through generations of family who will be wealthy.......doing nothing.


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## Guigz (Oct 28, 2010)

1.5M said:


> There is almost no middle class. Is just the rich with incomes over 1M/year and net worth over 10M and the poor with incomes below 200k/year and net worth below 2M. Middle class should be the incomes between 200k to 1M/year. Where is that class? Everything is skewed in favor of the rich and the sad part is that even some poor people who are working hard and saving don't realize they are still part of the working poor class and most likely will be their entire lives.


I don't get the obsession with the middle class or why it is so important to have one. Besides, 200K/y is an absurdly high amount of money. I think that the focus should be on ensuring that every human being has access to the basic necessities of a fulfilling life instead of freaking out on the top fraction of a percentile and how not everybody will be able to get to the same point.

There is also the option of getting off the hamster wheel. You don't need a mountain of money to live a fulfilling life. There are several examples of people living pretty cool lives on sub 10,000$/annum. You don't need that much money to be able to generate that type of income and it would be mostly tax free.


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## peterk (May 16, 2010)

Well I guess, if that's your definition 1.5m...

Mine would be based on quality of life though. Middle class to me would mean that you have the basic necessities covered, but find it tough to save money or afford luxuries. This to me, in Canadian terms, would be in the 30k-70k income range. The difference between someone making 150k/year and someone making 1.5m/year is largely irrelivent. 8 beds instead of 4, Bentley instead of BMW. If there is no hardship and there's money leftover that meets my definition of "rich" or "upper class".

To refer to someone making 150k in the struggling class simply because the highest of the upper class makes 100s of millions is an insult to the people that are actually struggling (i.e. <30k)


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## 1.5M (Apr 21, 2012)

peterk said:


> Well I guess, if that's your definition 1.5m...
> 
> Mine would be based on quality of life though. Middle class to me would mean that you have the basic necessities covered, but find it tough to save money or afford luxuries. This to me, in Canadian terms, would be in the 30k-70k income range. The difference between someone making 150k/year and someone making 1.5m/year is largely irrelivent. 8 beds instead of 4, Bentley instead of BMW. If there is no hardship and there's money leftover that meets my definition of "rich" or "upper class".
> 
> To refer to someone making 150k in the struggling class simply because the highest of the upper class makes 100s of millions is an insult to the people that are actually struggling (i.e. <30k)


There is a big difference between the one making 150k/year and the one making 1.5M. The former needs to struggle for many many years working mainly to make the rich richer (basically like an indentured servant) to be able at one point to gain financial freedom. The one making 1.5M is probably making the money having other people directly working for him (people who don't have other choice) or speculating in the financial markets (indirectly benefiting from the work of the poor).
Having the 1.5M guy taxed at lower rates than the relatively poor 150k one is a reflection of the fact that the laws are indirectly written by the 1.5M guy and his richer friends.
And you want to know what's the real insult for the $30k/year guy. If his income is for work he has to pay taxes at a rate of 17%. If the 1.5M/year guy had his income from capital gains his rate would be 20.54%, almost the same as the $30k/year guy.


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## peterk (May 16, 2010)

The 1.5m guy is paying at LEAST 10x as much tax as the 150k guy... And IF he gets a substantial part of that income from dividends or gains (and gets a lower tax rate as a result) it's because he SAVED and INVESTED his income in previous years that he ALREADY paid taxes on as income...

Also, this is confusing, as your name is 1.5M. I suggest we refer to the high earner as the 1m guy from now on


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## none (Jan 15, 2013)

peterk said:


> The 1.5m guy is paying at LEAST 10x as much tax as the 150k guy... And IF he gets a substantial part of that income from dividends or gains (and gets a lower tax rate as a result) it's because he SAVED and INVESTED his income in previous years that he ALREADY paid taxes on as income...
> 
> Also, this is confusing, as your name is 1.5M. I suggest we refer to the high earner as the 1m guy from now on


How is the absolute amount of taxes that someone pays relevant? You could also flip it around and say someone in the lower middle class is likely paying close to 90% taxes on income above those required for the necessities of life compared to someone at the upper end who is paying almost nothing in taxes relative to their total net worth.

Lots of ways to point out that the wealthy are getting a pretty easy ride.


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## Ponderling (Mar 1, 2013)

I just finished reading 'Borrow' 'The American Way of Debt' by Louis Hyman.

It took quite a bit of the mystery and financial bafflegab out of how the 'creative investment banking' screws over so many, whether it was intentional in the products constructed, or just a malevolent side effect. 

I think that frugality is great, and live that way whenever I can, but it on its own is not going to fix the USA, or many other modern economies, who have built their current wealth on financial stocks, rather than companies that make real things. 

If only the Hitchhikers Guide to the galaxy series vision of Douglas Adams could come true. There are wide swaths of our modern society's jobs, and regrettably, the people who staff them, that on some days I would love to flush away to another solar system.


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## Dmoney (Apr 28, 2011)

none said:


> How is the absolute amount of taxes that someone pays relevant? You could also flip it around and say someone in the lower middle class is likely paying close to 90% taxes on income above those required for the necessities of life compared to someone at the upper end who is paying almost nothing in taxes relative to their total net worth.
> 
> Lots of ways to point out that the wealthy are getting a pretty easy ride.


How is the absolute amount of taxes someone pays not relevant? I receive the same police services, libraries, protection from military, public transit, healthcare, education etc. as everyone else. I pay probably 4x the tax paid by the 'average' person. Am I not paying my fair share? I pay a higher percentage of my income as tax than the average person. Am I not paying my fair share? The rich pay a greater proportion of total taxes than they receive of total income. Are they not paying their fair share? 

I agree that it is much tougher being poor than rich. Higher % of after tax income is required just to get by. But there needs to be an incentive to work. I need a reason to be out of bed at 5:30 every morning and put in 12+ hour days. And that incentive isn't to be poor.


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## Nemo2 (Mar 1, 2012)

Dmoney said:


> How is the absolute amount of taxes someone pays not relevant? I receive the same police services, libraries, protection from military, public transit, healthcare, education etc. as everyone else. I pay probably 4x the tax paid by the 'average' person. Am I not paying my fair share? I pay a higher percentage of my income as tax than the average person. Am I not paying my fair share? The rich pay a greater proportion of total taxes than they receive of total income. Are they not paying their fair share?
> 
> I agree that it is much tougher being poor than rich. Higher % of after tax income is required just to get by. But there needs to be an incentive to work. I need a reason to be out of bed at 5:30 every morning and put in 12+ hour days. And that incentive isn't to be poor.


+1


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## peterk (May 16, 2010)

+2

Was going to say it but figured it was just falling on deaf ears anyways...


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## andrewf (Mar 1, 2010)

I don't think anything like 90% income tax rates is a good idea.

I don't have a problem with inequality in (market) incomes--that is, before transfers in cash or in kind. I have a problem with high inequality of consumption. So, I see no reason to penalize work or saving by the wealthy with high income tax rates. We could put in place a high consumption tax (ie, the 25-30% range), and give cash transfers to low income earners to compensate. 

There's no point in penalizing the wealthy for being productive and saving--it's not a bad thing.


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## SpIcEz (Jan 8, 2013)

+3


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## none (Jan 15, 2013)

Dmoney said:


> How is the absolute amount of taxes someone pays not relevant? I receive the same police services, libraries, protection from military, public transit, healthcare, education etc. as everyone else. I pay probably 4x the tax paid by the 'average' person. Am I not paying my fair share? I pay a higher percentage of my income as tax than the average person. Am I not paying my fair share? The rich pay a greater proportion of total taxes than they receive of total income. Are they not paying their fair share?
> 
> I agree that it is much tougher being poor than rich. Higher % of after tax income is required just to get by. But there needs to be an incentive to work. I need a reason to be out of bed at 5:30 every morning and put in 12+ hour days. And that incentive isn't to be poor.


My point was that there is inequality all over the place and this one isolated statistic (total taxes paid) is one way suggest that higher earners carry a larger tax 'burden'. What I was if you slice it another way 'what percentage of disposable income above life necessities do the poor pay?' The poor pay a far higher percentage than wealthy people.

As for wealthy people working harder that is not always true. I'm up for a position that I'll be working 40 hours a week making 100K - Does that mean I work harder than a single mom with two jobs making $25K a year? Not really. Inequality abounds.

Tax rates should be set to maximize the benefit to society - where that exactly is I'm not sure but I honestly don't think society would be adversely impacted if tax rates higher for the wealthy. Case and point - we pay double tax for US investments but most of us still do it anyway.


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## sags (May 15, 2010)

As the wealthy claim more of the wealth, less money circulates through the economy. 

It doesn't have the required "velocity" to sustain economies.

Governments can print Trillions of dollars........but if it sits on pallets in a warehouse (or a wealthy person's bank account) it isn't worth anything. The wealthy can only consume so much before they run out of things they need or want.

Give 1,000 each to 1000 people or 1 Million to a wealthy person..........which has the greater economic impact?


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## Nemo2 (Mar 1, 2012)

none said:


> Inequality abounds..


Even in those purported bastions of 'togetherness', bee hives, ant hills, etc, there is stratification........perhaps earthworms, (and I'm not too sure about them), experience lives absent of inequity...but not many other motile creatures do.


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## andrewf (Mar 1, 2010)

sags said:


> As the wealthy claim more of the wealth, less money circulates through the economy.
> 
> It doesn't have the required "velocity" to sustain economies.
> 
> ...


The wealthy don't put money in their sock drawer or in Scrooge McDuck swimming pools. They invest it or spend it.


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## fraser (May 15, 2010)

The answer is saving more, being frugal???

Just take a look at the increase in the number of children living in families below the poverty line-in Canada and the US. The increase in Canada is a huge concern....going the wrong way. How would the article address this?


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## none (Jan 15, 2013)

sags said:


> As the wealthy claim more of the wealth, less money circulates through the economy.
> 
> It doesn't have the required "velocity" to sustain economies.
> 
> ...


Yup, This guy gets it.


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## Toronto.gal (Jan 8, 2010)

The wealthy not only invest and spend, but also donate huge amounts!

Since the posted article mentioned those terrible 1 percenters of Americans, how about mentioning the good that this category does, and not just the 50+ group, but the young also, like Zuckerberg for example, who's the #1 donor in the US in his age group atm, and who began donating millions at the age of 26. I know, I know, there are those that will say they do so just for tax-deductions.

http://www.nytimes.com/2012/12/19/t...silicon-valley-community-foundation.html?_r=0

Nearly 2 trillion is the combined wealth of the top 400 richest in the USA, and what do you suppose is the combined amount given away? That doesn't help fix some of America's problems?

The efforts of many of the philanthropists listed below, are truly impressive & very much involved in more than simply writing cheques. As the saying goes, 'give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.'

http://givingpledge.org/

No need to be wealthy btw, so even if you're part of the 99%, you can always do something to improve your life & that of others [obviously not talking about those that can't help themselves for various legitimate reasons].

*'Sayanvala, named Canada’s top teen philanthropist for 2012, has a gentle way of mobilizing people for a good cause. Last year, she launched a food drive from her world issues class and galvanized her high school.*'
http://www.therecord.com/news/local/article/884727--cambridge-teen-wins-philanthropy-award

*@fraser:* yes, the partial answer for many, is indeed, if not frugal, at least living financially responsible! 

We have a member on this forum, who is under 25/not a university graduate/makes around $30K a year/purchased his 1st home last year. His good down payment came from years of savings, because since his working days, he saved/became financially literate/lived below his means, which no doubt was a challenge & sacrifice!

There are many who make a reasonable salary, but don't save as much as they should, because as David Chilton would say, they are 'fantastic spenders'.

*'There’s a line in the book, which, at the time, didn’t seem all that important, but is really an important part of what I’m trying to say. And that’s that we’re not bad savers, it’s that we’re fantastic spenders. And until we get the spending under control, the saving will never take place.'
*
http://www2.macleans.ca/2011/09/07/...y-are-so-far-behind-in-saving-for-retirement/

Watch just one episode of 'Til Debt Do Us Part' and you'll see how financially irresponsible many people are.


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## HaroldCrump (Jun 10, 2009)

Toronto.gal said:


> There’s a line in the book, which, at the time, didn’t seem all that important, but is really an important part of what I’m trying to say. And that’s that we’re not bad savers, it’s that we’re fantastic spenders. *And until we get the spending under control, the saving will never take place.*


And that should apply to govt. spending as well.
There was a discussion along these lines on another thread under "General".
No matter how much an individual (or corporation or state) may increase revenue, unless there is fiscal responsibility in terms of cost control, there is no hope.

In the book _The Millionaire Next Door_, the authors compare earning/revenue to offense in a sport, and savings to defense.
Some extremely frugal individuals have great defense and thus don't need a very strong offense.
A good balance is obviously the ideal state.


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## none (Jan 15, 2013)

Toronto.gal said:


> We have a member on this forum, who is under 25/not a university graduate/makes around $30K a year/purchased his 1st home last year. His good down payment came from years of savings, because since his working days, he saved/became financially literate/lived below his means, which no doubt was a challenge & sacrifice!


And because he bought at the top of the bubble all of his scrimping and savings will be naught in about two years.

Also Toronto.gal counterpoint: http://www.marketplace.org/topics/your-money/when-it-comes-charity-poor-give-more


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## Toronto.gal (Jan 8, 2010)

*none:* You totally missed the point on both counts!

*1.* Some people know how to save/sacrifice, while others know how to spend & buy the latest of everything. I was not talking about RE or any other type of bubble. :rolleyes2:
*2.* I was emphasizing the donation of the richest since the 1% has been attacked enough lately.

Btw, I'm curious about your username, care to explain the meaning.


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## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> And that should apply to govt. spending as well.....A good balance is obviously the ideal state.


Indeed!

Btw Harold, welcome back!


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## el oro (Jun 16, 2009)

The link below is an article by a mathematics professor speaking to unemployed 17-23 year olds through a charity.

"But for me the revelation was the impact on their aspiration. They could not see why anyone would want to work hard, and aim for a high salary, if they then simply handed over half of it to the state. For a student of finance such as me, accustomed to hearing politicians of almost every hue state their acceptance of higher tax rates for higher earners, this was a revelation. No one likes the idea of high tax rates, even those that aren't earning anything."

http://www.cnbc.com/id/100590894


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## none (Jan 15, 2013)

Maybe I did miss the point. Don't get me wrong, I don't think that the 1% are inherently evil. I just think that the massively disproportionate amount of wealth that that 1% has extracts from the economy is ultimately bad for it and society as a whole. The reason the middle class is so important is that it's an extremely strong stabilizing force for a society and the 1% (or .1%) are killing that portion of society. Many people realize this, many of whom are on that 'giving pledge' list you posted. They realize that the wealthy have been getting much more of a free ride the last 20 years than they did previously and society is suffering for it. 

A good comparison is compare Costco and Walmart. The CEO makes about 650K but could easily demand more but instead pays his employees a good living wage. Compare this to Walmart: I don't think we have to even go there. 
Add WMT to this plot: https://www.google.com/finance?q=NASDAQ:COST

Which company does better? Costco by far because they have happy employees who care about the company and better retention. Employees that are treated well are good for business and society is no different. 

That's all I was saying. Should we tax those making over a million (or 100K) or whatever at a higher rate? And if that rate is higher by how much? I think so but I couldn't tell you exact numbers at this time - I'd have to see some convincing research. I do know that trickle down economics does not work and the research has shown that increasing taxes on the wealthy would be a positive for the US.

As for my username, when I was signing up and it asked who referred me I put 'none' in the field. That was silly of course but I thought it would make a good username. BTW: I have one referral so far.


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## sags (May 15, 2010)

Marc Faber was an informative guest on BNN today, and he talked about the very topic of wealth disparity.

As he put it............Printing money is easy......even the Chinese are doing it.......in fact they invented paper money.

But, when money is printed it isn't distributed evenly. All those trillions of dollars printed around the world, have invariably found their way into the bank accounts of the 1%. He said they have not been spending the money developing companies and creating employment because it is much easier to simply "invest" it in the hot commodity or stock market segment of the day. From gold to copper to real estate to stocks to US. Treasuries...........the money flow created by stimulus printing has created bubbles of it's own.

In the future he says...........governments will come to the 1% and take some of their money........because it is the only place where there is money to take.

His interview will be repeated on BNN several times and it is very informative about all kinds of things.


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## Toronto.gal (Jan 8, 2010)

none said:


> 1. Many people realize this, many of whom are on that 'giving pledge' list you posted.
> 2. Employees that are treated well are good for business and society is no different.
> 3. As for my username, when I was signing up and it asked who referred me I put 'none' in the field.


1. I haven't yet read the 100+ pledge statements on that list, but I intend to read every one of them, as the messages in some of them have been very interesting!
2. Indeed, and I believe that motivation is a big part of that happy equation, on the part of both the employee & employer.
3. Thanks for the explanation. Would you like to know mine?


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## none (Jan 15, 2013)

Toronto.gal said:


> 1. I haven't yet read the 100+ pledge statements on that list, but I intend to read every one of them, as the messages in some of them have been very interesting!
> 2. Indeed, and I believe that motivation is a big part of that happy equation, on the part of both the employee & employer.
> 3. Thanks for the explanation. Would you like to know mine?


1. If you have time you should watch this, it's very good: http://www.ted.com/talks/chimamanda_adichie_the_danger_of_a_single_story.html
2. I agree but opportunity is also a necessary ingredient for motivation to work. You cannot have success without opportunity. Similarly, you cannot have success without motivation. I think we agree a balance must be found.
3. Let me guess, you're a woman, an accomplished author, and you live in TO?


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## Dmoney (Apr 28, 2011)

sags said:


> Give 1,000 each to 1000 people or 1 Million to a wealthy person..........which has the greater economic impact?


And what happens when 10 people are fantastic savers, or innovative entrepreneurs, or incredible athletes, accomplished actors, or just plain lucky, and the remaining 990 individuals pay to buy their product/idea or watch them compete/act. All of a sudden, this 1% has 900,000 and the remaining 990 people have to split the 100,000 that remains.

Do we confiscate everyone's wealth and start over? Do we impose a tax and redistribution such that everyone making more than 1,000/year gets taxed 100% on amounts above that, and the rest get made whole if they fall short of $1,000? 

I get that 1,000 to 1,000 people stimulates the economy much better than the alternative, but in the end, that money will still end up with those who have the most sought-after skills and abilities, or are just plain lucky. 

I can get on board some form of inheritance tax which will avoid massive legacies like the Walton fortune, etc. but beyond that, there will always be those who are more financially successful than others, and that's just life.


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## sags (May 15, 2010)

Faber gave another interview on Bloomberg...............where he explains it this way............

When you print money, the money does not flow evenly into the economic system. It stays essentially in the financial service industry and among people that have access to these funds, mostly well-to-do people. It does not go to the worker. 

I just mentioned that it doesn't flow evenly into the system.
Now from time to time it will lift the NASDAQ like between 1997 and March 2000. Then it lifted home prices in the U.S. until 2007. Then it lifted the commodity prices in 2008 until July 2008 when the global economy was already in recession. More recently it has lifted selected emerging economies, stock markets in Indonesia, Philippines, Thailand, up four times from 2009 lows and now the U.S.
So we are creating bubbles and bubbles and bubbles. This bubble will come to an end. My concern is that we are going to have a systemic crisis where it is going to be very difficult to hide. Even in gold, it will be difficult to hide.
Faber is, of course, still bearish on U.S. stocks. He told Bloomberg that he sees "considerable downside risk" in the market.


Read more: http://www.businessinsider.com/faber-gold-wont-be-a-place-to-hide-2013-3#ixzz2OqFaA6Xc


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## sags (May 15, 2010)

Wealthy people benefit greatly from tax systems that are chock full of deductions and tax deferral or avoidance opportunities...............for those with enough money and the professional advice to use them to advantage.

If the tax system giveth............then I see no reason why the tax system shouldn't taketh away.

A simplified tax rate with no deductions that are advantageous to the wealthy.............may be enough. Even if the wealthy simply pay what they would pay without all the deductions.........would be helpful.

Same with corporations. Should GE earn billions of dollars and then reduce their taxes to zero by sending in thousands of pages of deductions?

Should corporations continue to enjoy lower tax rates..........if they aren't using the capital saved?

Maybe it should be...........use it or lose it?

The discussion can go on......and points can be scored on both sides.........but one thing is certain.

Year after year, the wealthy accumulate more of the total wealth...........and that can't go on forever.


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## peterk (May 16, 2010)

What evidence do you have that wealthy people have access to some magical tax avoidance opportunities though? Unless you make your millions by running a business and have some questionable ethics regarding reporting revenue or claiming inappropriate deductions, there's nothing. 

Please explain how an upper manager at a large corporation making 500k is more able to avoid paying all the taxes required of him than an employee at the same company making 50k?

And no, making full use of RRSPs, understanding tax credits, and lower tax rates on gains and dividends does not count as "avoidance opportunites" only accessible by the wealthy.


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## none (Jan 15, 2013)

peterk said:


> And no, making full use of RRSPs, understanding tax credits, and lower tax rates on gains and dividends does not count as "avoidance opportunites" only accessible by the wealthy.


sure it does.


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## HaroldCrump (Jun 10, 2009)

none said:


> sure it does.


So, according to you and sags, every one that dares to work hard (either in a job or in a business) to make money and get wealthy deserves to have their wealth appropriated away from them through taxation.
How dare they make money and accumulate above-average wealth !

They ought to be punished and all their "excess" income/wealth should be taken away through punitive taxation and re-distributed to the rest of society.
The tax system should be so progressive and so punitive for anyone that dares to make any money that everyone will think twice before taking that next promotion, before starting a second business, before investing even a dime in stocks and bonds.

Income earners should not have any tax shelters such as RRSP available to save for retirement, because they must work till they drop.


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## Toronto.gal (Jan 8, 2010)

none said:


> 1. If you have time you should watch this....
> 2. opportunity is also a necessary ingredient for motivation to work.
> 3. you're a woman, an accomplished author, and you live in TO?


*1.* I did, thanks for posting! In fact, I have read her book 'Half of a Yellow Sun' & plan to read some of her poems & other books as well [so many books, so little time though]. Have you read any of her novels?

http://www.nytimes.com/2006/10/01/books/review/Nixon.t.html?_r=0

I don't agree with her on everything, but I have learned from this inspirational author, and that's the reason I read a lot, because it's important to get to the truth! As Adichie said so eloquently, 'single stories create stereotypes as they tell one story, hence incomplete stories....stories have been used to dispossess and to malign, but can also be used to empower, humanize and repair broken dignities.' And I would add, to educate!

Like her, I also love the 'tribal music of Mariah Carey'. 

*2.* Yes, but if you lack motivation and/or desire to do/be better, then there will be missed opportunities.

*3.* 2.5 out of 3 were correct! The accomplished author here is MoneyGal - look at her username [I'm accomplished, but not an author, hence the .5 mark]. :encouragement:

*Quoting you from a retirement thread:* 

*'Yeah, working is for suckers. If working was so much fun why would they have to pay you to do it.'*

So are you saying that if you found a fun job, you would be happier working for free? Then how would you put food on the table? What made the jam and margarine disappear from Adichie's table?

Is that your belief about work in general, or work past a certain age? If the former, then what is your sense of purpose? What is your definition of equality/opportunity/success then?

Work btw, is just that, work, not play, so why would you not get paid for that? You can have fun volunteering for free, however! 

There is no substitute for hard work - Thomas A. Edison


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## MoneyGal (Apr 24, 2009)

So interesting, I have a passion for stories and information about Biafra (but coming from a totally different place than a literary one; I am interested in state formation).


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## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> How dare they make money and accumulate above-average wealth !


Exactly, so how dare they use TFSA accounts, to become even richer? :hopelessness: :biggrin:

I recall all the criticism with respect to the rich, when there was talk about raising the limit to $10K.


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## none (Jan 15, 2013)

HaroldCrump said:


> So, according to you and sags, every one that dares to work hard (either in a job or in a business) to make money and get wealthy deserves to have their wealth appropriated away from them through taxation.
> How dare they make money and accumulate above-average wealth !
> 
> They ought to be punished and all their "excess" income/wealth should be taken away through punitive taxation and re-distributed to the rest of society.
> ...


I think you equate being paid with working harder. I'm sure whatever you do it's not nearly as difficult as someone working in a 'lower caste' job making minimum wage.

Here's one example: RESPs. That's a much more obvious one.

Scenario: Single mom two kids. Single because her husbad was killed in an accident no fault of her own (that's to stop the: "she had two kids and deserves to suffer crowd" and she can only make enough to barely feed and house her children and herself.

She doesn't have enough to get a meaningful amount of the government contribution so she is being penalized because she's poor. I think that program would make much more sense if every child got $500 regardless of how much their parents contribute - but then that would just equate to lowering tuition of course which is the whole point of the bait and switch program. My brother and his family scrape together about 45K a year, they work very hard and have two children. I find it offensive for you to insinuate that they are somehow lazy.


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## none (Jan 15, 2013)

Toronto.gal said:


> Exactly, so how dare they use TFSA accounts, to become even richer? :hopelessness: :biggrin:
> 
> I recall all the criticism with respect to the rich, when there was talk about raising the limit to $10K.


I'm a little torn about TFSA as they are better retirement vehicles for the poor compared to RRSPs.


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## peterk (May 16, 2010)

none said:


> My brother and his family scrape together about 45K a year, they work very hard and have two children. I find it offensive for you to insinuate that they are somehow lazy.


So then, the primary criteria for one's compensation should be "effort"? No reward should be give for: foresight, critical thought towards your skill-set, education, careful analysis of the job market before selecting a career?

You yourself said you make around 100k. Do you work twice as hard as your brother's family? If not, do you feel compelled to write him a cheque for 30k to equalize your earnings? If not, why do you feel that government should _compel _ me, by force, to write your brother that cheque?


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## none (Jan 15, 2013)

peterk said:


> So then, the primary criteria for one's compensation should be "effort"? No reward should be give for: foresight, critical thought towards your skill-set, education, careful analysis of the job market before selecting a career?
> 
> You yourself said you make around 100k. Do you work twice as hard as your brother's family? If not, do you feel compelled to write him a cheque for 30k to equalize your earnings? If not, why do you feel that government should _compel _ me, by force, to write your brother that cheque?


I'm not saying that one should not be compensated more for supplying services that society values more. The issue is how much more should they be compensated? Of course, as a society we have agreed that the wealthy are already somewhat over compensated and consequently we have a progressive tax system.

What I do think is unfair is that his taxes are going to support people that don't need it. Like my example above, his tax dollars are used supplement your child's (assuming you have child and an RESP) post-secondary education - he is denied this benefit as he can't afford so put $2500 a year into an RESP. Do you really need this handout? For someone asking for a hand-out you're sounding pretty hypocritical.


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## HaroldCrump (Jun 10, 2009)

none said:


> I think you equate being paid with working harder. I'm sure whatever you do it's not nearly as difficult as someone working in a 'lower caste' job making minimum wage.


I didn't say that, and neither do you know what I do or how hard I work, so let's keep the personal judgments aside.

We have to assume here that the market determines the fair wages for all types of work.
I know, the labor market is not perfect and is manipulated at both the demand and the supply ends.
But, for the most part, for a society to function, we have to assume that labor and wages are more or less co-related.

Therefore, in-demand or skilled professions will command higher wages than less demanded or less skilled professions.
Just as efficient businesses will generate more profits, and profitable businesses will attract more investors.



> She doesn't have enough to get a meaningful amount of the government contribution so she is being penalized because she's poor. I think that program would make much more sense if every child got $500 regardless of how much their parents contribute


You choose a particularly bad example.
The child subsidies for lower income families/individuals are quite generous in our country.
In your example of the RESP program - lower income families are eligible for additional CESG grants.
They are also eligible for the CLB grant.
They also receive higher CCTB, which is a means-tested program.

Very low income families also have GST rebates, and other programs.

Should we increase the amount of education grants for lower income families? Sure, we could.
But keep in mind that all kinds of social welfare programs are ultimately funded through taxation.

We have to find a balance between funding social programs and creating more and more disincentive to work and run profitable businesses.
If you don't strike the right balance, you will end up eroding the size of the pie itself as the punitive taxation will create disincentives to work and run businesses.



> I find it offensive for you to insinuate that they are somehow lazy.


Who said they are lazy?
I didn't say or imply any such thing.
You simply cannot keep escalating the levels of progressive taxation beyond a point.
People get uncomfortable once taxation starts to take away 1/3rd of their income.
At 50% (i.e. half of the earned income) it gets ridiculous.

Keep in mind that this is just income tax - there are various other kinds of overt and covert taxes that are imposed by various levels of govt.


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## none (Jan 15, 2013)

> I didn't say that, and neither do you know what I do or how hard I work, so let's keep the personal judgments aside.


Sure, it's getting a little hot - point taken



> We have to assume here that the market determines the fair wages for all types of work.


This is a poor assumption. The existence of a minimum wage and unions is evidence that this is a poor assumption



> Therefore, in-demand or skilled professions will command higher wages than less demanded or less skilled professions.


The CEO of costco makes far far less than the CEO of walmart - again, evidence that his assumption is poor




> The child subsidies for lower income families/individuals are quite generous in our country.


Depends what you are comparing it to. Is it the worst? Far from it, should and could it be better? Absolutely.



> In your example of the RESP program - lower income families are eligible for additional CESG grants.
> They are also eligible for the CLB grant.


Yes, but you need to come up with some money to take advantage of these. If you really have no additional funds to put in the RESP then these programs are useless.




> Very low income families also have GST rebates, and other programs.


True.




> Should we increase the amount of education grants for lower income families? Sure, we could.
> But keep in mind that all kinds of social welfare programs are ultimately funded through taxation.


Obviously. I don't see your point here. Taxes used wisely have a wonderful benefit to society.







> We have to find a balance between funding social programs and creating more and more disincentive to work and run profitable businesses.
> If you don't strike the right balance, you will end up eroding the size of the pie itself as the punitive taxation will create disincentives to work and run businesses.


Sure, and I would argue (as would Warren Buffet) that taxation is far from a level so high to create any disincentive for profit. Hence that group of wealthy Americans asking for higher taxes on the rich.




> People get uncomfortable once taxation starts to take away 1/3rd of their income.
> At 50% (i.e. half of the earned income) it gets ridiculous.


That's a relatively recent development. During the 50 & 60s taxes were much higher for the wealthy, the economy did great, amazing infrastructure was build and education was cheap.


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## MoneyGal (Apr 24, 2009)

none said:


> Yes, but you need to come up with some money to take advantage of these. If you really have no additional funds to put in the RESP then these programs are useless.


Try googling "Canada Learning Bond," which provides a tax-free bond of $500 per child to open an RESP for low-income families, plus up to $1500 more over time for each eligible child.


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## warp (Sep 4, 2010)

none said:


> I agree with the first commenter on that article. That article is rediculous.
> 
> Learning sound financial strategies would be good for the middle-class and poor. But it will not significantly alter the distribution of wealth in this country. The financial system is designed to privilege the growth of existing wealth, not encourage new wealth. The difference between tax rates on income and tax rates on capital gains is only the most obvious evidence of that."[/I]


Thats a pretty dumb way to think about taxing capital gains.
Taxes on Capital Gains absolutey have to be lower than regular income because to make a capital gain, one has to put his capital at RISK first! If their is no incentive to invest and risk capital, no-one will do so, and EVERYONE will be poorer as a result. My opinion is that there should be NO taxes on capital gains period, as was the case in Canada for many years until Trudeau, I think, ( that moron), introduced them.

I read a book by G Paull Getty years ago. He was one of the richest people in the world when he wrote it. He made the point that if all the money in the world was divided up equally one morning, by 5:00 o'clock that same day, there would be rich people and there would be poor people. 

The cream will always rise to the top. Just look at any socialist country.......would you want to live there??


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## MoneyGal (Apr 24, 2009)

warp said:


> I read a book by G Paull Getty years ago. He was one of the richest people in the world when he wrote it. He made the point that if all the money in the world was divided up equally one morning, by 5:00 o'clock that same day, there would be rich people and there would be poor people.


Back to the original article, I see!


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## andrewf (Mar 1, 2010)

Toronto.gal said:


> Exactly, so how dare they use TFSA accounts, to become even richer? :hopelessness: :biggrin:
> 
> I recall all the criticism with respect to the rich, when there was talk about raising the limit to $10K.


The criticism isn't of the rich, it's of giving blatant handouts to rich people. A $10k per year contribution limit on TFSAs will only benefit the top 10% - 20% or so of income earners. Remember that a huge percentage of people don't have RRSPs, much less maxing out their contributions. The middle class is, frankly, stupid to support this move as opposed to a reduction in income tax rates on middle-income salaries. They will not benefit from a $10k per year contribution limit.


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## Plugging Along (Jan 3, 2011)

I will jump back in that we are back to the original article.

I think that the wealth problem, is really a problem with human beings. We cannot have complete 'fairness' and equal distribution unless there all humans are satisfied having the same amount and being willing to work the same amount.

There have been studies and tests over and over showing an attempt in redistribution of wealth. First, those who have alot, are willing to 'give' as they see they are fortunate, and can afford more, then more and more is taken, and they realize that they are working more, and then receive less, and feel that they are putting more effort than those receiving, and no longer getting compensated for it. They stop working. In our case now with much more mobility, they move away.

For those who are on the receiving end, the have little incentive to work harder as the harder the work, the less they get get. In the end, you have no one wanting to work. 

I do not believe equal or fair distribution of wealth is possible. As these are subjective terms. I don't mind paying my 'fair share' as a higher income earner, but it ticks me off to no end hearing people that say I should give more. 

I do think some things can help... universal healthcare, at least people won't go bankrupt getting ill or through things beyond their control.


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## none (Jan 15, 2013)

andrewf said:


> The criticism isn't of the rich, it's of giving blatant handouts to rich people. A $10k per year contribution limit on TFSAs will only benefit the top 10% - 20% or so of income earners. Remember that a huge percentage of people don't have RRSPs, much less maxing out their contributions. The middle class is, frankly, stupid to support this move as opposed to a reduction in income tax rates on middle-income salaries. They will not benefit from a $10k per year contribution limit.


I know, for any kid who hit 18 in 2009 and assuming that there is an additional $5K corrected for inflation per year - basically he'll never had to pay any money on any capital gains - unless he's a super saver of course. TFSA are a blatant cash grab by the wealthy - it's pretty sick actually.

Good thing too because no one invested anything in the stock market ever when capital gains were taxes. WHEW! riiiiight...

Of course, I make full use of mine because whatchugonna do?


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## Plugging Along (Jan 3, 2011)

I didn't that many 18 year olds were wealthy. I think if a Tfsa encourages young people to save and invest, that may actually help the wealth distribution. 

If its not fair that the rich get any tax breaks, they certainly pay a lot of taxes, then maybe we should try a free for all. Only pay for the services you use, don't pay for anyone else, etc, I would guess that there will still be rich and poor. (8 am being flippant in my comment of course).


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## andrewf (Mar 1, 2010)

There's no additional incentive to save if you can't use all your TFSA room as it is. Doubling it only helps those that can make max contributions every year, on top of maxing out their RRSP. That is a lot of saving for someone with a modest income. TFSAs are a regressive tax measure. People jump up and down and pull out their hair about GST being regressive, but not a peep about TFSAs at $10,500-$11,000 a year...

RRSPs have demonstrated that simply having the room available is an utterly ineffective way of encouraging saving.


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## none (Jan 15, 2013)

Yeah, suggesting that having a TFSA encourages people to save is ludicrous. Has household debt decreased since they were introduced in 2009? Um.. no. 

The only reason I have some sympathy for them is that they are marginally better for retirement savings for poor people - even this though is a bit debate-able.

It's a cash grab for investors and yet another handout to the financial sector - a blatant one at that.


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## Nemo2 (Mar 1, 2012)

Purely an anecdotal observation...but I walk around 'downtown' here during the day and invariably see people who 'appear' to be unemployed, (or unemploy_able_); they're certainly not rich but.......they're most often smoking, (and cigarettes ain't cheap).........the Beer Store does a roaring business, as do the scratch & lose lotteries.

Poor choices for 'poor' people?


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## none (Jan 15, 2013)

Sure, lots of those. Same with lots of wealthy people who just had their money given to them and did very little to earn it on their own. 

Does Canada have an estate tax?


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## HaroldCrump (Jun 10, 2009)

none said:


> This is a poor assumption. The existence of a minimum wage and unions is evidence that this is a poor assumption


It is a mostly correct assumption.
Doctors make more than cleaners; engineers make more than burger flippers, etc.
Unions, if anything, distort the labor market and prevent its proper functioning.
Also, unions are the #1 cause for an over-sized and over-compensated public sector, which is completely out of whack with the realities of the labor market.



> The CEO of costco makes far far less than the CEO of walmart - again, evidence that his assumption is poor


Well, Wal-Mart is a $260B corporation, while Costco is 1/10th the size.
The pay of 1 CEO vs. another does not prove anything.
Is Costco somehow a soulful, ethical corporation not driven by the same imperatives of profitability and revenue like Wal-Mart is?



> Yes, but you need to come up with some money to take advantage of these. If you really have no additional funds to put in the RESP then these programs are useless.


So, by that logic, we should not have *any* tax shelter programs, incl. TFSA, RRSP, DB pensions, etc.
If that's the way you want to go, we can go there - but then, income taxes will have to be reduced to single digit levels.
What you cannot argue for is a 50% marginal tax rate _and_ no retirement tax shelters.



> I don't see your point here. Taxes used wisely have a wonderful benefit to society.


And we have that, no?
We have taxes - more than enough of them.
We have every kind of imaginable taxes and fees - income, sales, capital gains, etc.



> That's a relatively recent development. During the 50 & 60s taxes were much higher for the wealthy, the economy did great, amazing infrastructure was build and education was cheap.


You are looking just at income taxes.
Don't forget that in last 2 decades or so, more and more taxes are being shifted from income to other sources.
Value added taxes, sales taxes, service fees, etc. are increasing at a very high rate now.
Services are falling (both in quality and quantity) while the aggregate taxes are going up.
This problem cannot be solved by increasing income taxes.


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## Plugging Along (Jan 3, 2011)

I am confused... You complain that 18 year olds won't have to pay taxes. (And I know most 18 year olds are not wealthy)



none said:


> I know, for any kid who hit 18 in 2009 and assuming that there is an additional $5K corrected for inflation per year - basically he'll never had to pay any money on any capital gains - unless he's a super saver of course. TFSA are a blatant cash grab by the wealthy - it's pretty sick actually.
> 
> Good thing too because no one invested anything in the stock market ever when capital gains were taxes. WHEW! riiiiight...
> 
> Of course, I make full use of mine because whatchugonna do?





none said:


> Yeah, suggesting that having a TFSA encourages people to save is ludicrous. Has household debt decreased since they were introduced in 2009? Um.. no.
> 
> The only reason I have some sympathy for them is that they are marginally better for retirement savings for poor people - even this though is a bit debate-able.
> 
> It's a cash grab for investors and yet another handout to the financial sector - a blatant one at that.


Then you complain that Tsfa aren't encouraging savings.... 

Why is it disgusting that an 18 year who learns early to save and invest to not pay taxes.... Are you saying its better that we don't have any incentive to save and then just have them spend all their money...


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## Plugging Along (Jan 3, 2011)

Here is the thing, life isn't fair. Just buy being born in North America we are better off that 80% of the world population. By being born in a middle class family, then you are better off than 90% and if you are born in one of those really wealthy families, then you are better off than 99.99999. So what?

We are all given the same 24 hours in a day to do something about it.

I just don't get it sometimes. My parents immigrated to Canada so my siblings and I could have a shot at being the 2%. They came with nothing and made huge sacrifices. They were and so grateful for the opportunities and safety nets that are provided here. You don't get turned away if you don't have healthcare, you don't starve if you are low income, you get to go to school here, even if your parents can't afford to send you. To me those are pretty good things, isn't it up to us to do the rest. 

How is it that immigrant families who start out with nothing can build wealth. It may take a few generations, but it can be done. I think if we are providing safety net for those who are down, they have health care, food, shelter and and opportunity for education, what else should we do?

Don't complain about the 1% everyone has the potential to be that one percent, sure for some it's easier, but if you want it, then go and do something about it.


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## Young&Ambitious (Aug 11, 2010)

Plugging Along said:


> Don't complain about the 1% everyone has the potential to be that one percent, sure for some it's easier, but if you want it, then go and do something about it.


*Applause*

Well said PA. I couldn't agree more, which is why the whole 1% argument annoyed the heck out of me.


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## none (Jan 15, 2013)

Young&Ambitious said:


> *Applause*
> 
> Well said PA. I couldn't agree more, which is why the whole 1% argument annoyed the heck out of me.


If you both actually believe that then you're racists. Really, do you think natives in Canada and blacks in the US are predisposed to sloth?


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## sags (May 15, 2010)

You make good points PA..........but is today's reality the same as the past?

Many immigrants came to Canada with some skills...........mostly in the trades.

There were opportunities for shoe cobblers, tailors, tool and die trades, and other trades and occupations.

Many of those opportunities are now closed, and many immigrants today are stuck in low income service related jobs, partly because that is the workforce that is needed to provide labor for an expanded service industry economy.

There are people like Steve Wynn (billionaire owner of Wynn hotels and seller of the Picaso painting for 155 million dollars) penning articles lamenting having to pay a "minimum wage" to his employees when he could just bring in some Mexicans willing to work for less.

If we wait for the wealthy elite to create meaningful employment for everyone else...........we will be waiting a long time.


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## andrewf (Mar 1, 2010)

Everyone has the potential to be in the 1%? If we all worked hard and were virtuous, we could all be way above the average?

I think that's a tough statement to back up. Maybe if everyone bought a lottery ticket... many people don't have the aptitude to make millions.

I think it's worth noting that the rich have an interest in lower income inequality. In countries with high income inequality, even the rich have reduce life expectancy. There are positive externalities associated to living in a society with only moderate income inequality. I don't think the rich want to live behind razorwire fences in gated communities--but that's the price of high income inequality.


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## donald (Apr 18, 2011)

Anybody read the article in the side bar in the atlantic on the link Re:trader joe's?Thought provoking and hit's on the conversation.(someone mentioned Jim s,the ceo of costco)He has the exactly same philosophy as what is outlined in the trader joe's article.He is a bad example-he founded costco and he purposely grossly underpaid himself.....excellent business bio(he was half the reason buffet and munger took such a early stake in cost)


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## SpIcEz (Jan 8, 2013)

none said:


> I think you equate being paid with working harder. I'm sure whatever you do it's not nearly as difficult as someone working in a 'lower caste' job making minimum wage.


/WARNING (Long text)

This is something that is often repeated and really irritates me.

"HARD" might not be the right word, but we all need to understand, people say working hard, not to equate it to physical labor, but effort. Mental effort drains you. Anyone who has worked "hard" at a job (given their all) that requires all your brain power, be it science, math, engineering, administration, secretarial, management, project management, knows that at the end of the day, you are SPENT.

Hell, to have an EASY day, I go in the field and help my guys out pulling wire, installing equipment and give the days project management to someone else. That CLEARS MY HEAD, its easier then my job, BY A BIG MARGIN. I feel good, body and soul having worked physically.

But at the end of the day, project management and dare I say GOOD project management is needed, or else no one makes money, we loose clients and my technicians will be out of a job.

Ask any one of my technicians if they would do my job. They are all bright and intelligent and I respect them greatly. But they respect what I do as well. And not a one would be in my shoes for more than a day.

My job like other jobs that arent physical, requires quick thinking, advanced skills in many different fields and one big thing... responsibility. At the end of the day, if the project doesnt work, its my head. That comes with stress and working past 8-5, always thinking about the next day, week or month... ect..

Anyways, Ive gone in to more details than necessary, but suffice to say, I'm no super human, but I stepped up and took this job, because I like it and I'm willing to take the risks. Many people DO NOT WANT TO HAVE RESPONSIBILITY.

Those people are not paid what I am paid in my field. And that is fair. If they want more, take on more. If not, that's fine, but don't go around unionizing and forcing the rest of us to support your choices. Its not lazy, they might still be hard workers, but they don't want the stress that comes with doing more work.

Back to your quote, in my job, I am 100% certain what "I" do is more difficult than most people with minimum wage jobs. Because I know its more difficult than what my technicians do and they are certainly not paid minimum wage. And I started at the bottom and worked my way up, so I have been in those "lower caste" jobs.

Now... from mid management on up... I don't know if the work gets that much harder, but if they pile on the responsibility thiker as you go higher (which they do), then they deserve more money.

With risk, comes reward 

Though I do agree, CEO's are in a completely different dimension that makes no sense at all.

\sorry for the ... rant


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## none (Jan 15, 2013)

Or he paid himself what he thought was fair value for his efforts and in consideration to his shareholders.

On a lighter note:


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## SpIcEz (Jan 8, 2013)

Ha, I really liked that video


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## donald (Apr 18, 2011)

None-did you read the article on trader joe's and how they compensate there worker's?

Read up on costco's founder and past ceo!


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## Plugging Along (Jan 3, 2011)

none said:


> If you both actually believe that then you're racists. Really, do you think natives in Canada and blacks in the US are predisposed to sloth?


Wow, I don't think I have EVER been called racist, I believe considering I am a visible minority in more than one way and made absolutely no reference to race. I do believe when one starts calling others names, it is because they know they no longer have logic to back them up.

I think it's more racist to think that certain groups can not do well because of their color or race. Yes there are poor natives, and blacks, just as there are poor whites, yellow, red, pinks, whatever color... btw there are also very wealthy natives and blacks, and there are wealthy other races too. 

My point is if an immigrant can come to Canada with no money, and essentially refugee status (not my dad but a few of the 11 guys he roomed with in his one bedroom place), and retire okay with kids that have done well, then I do think that everyone has the potential to be out of poverty.



sags said:


> You make good points PA..........but is today's reality the same as the past?
> 
> Many immigrants came to Canada with some skills...........mostly in the trades.
> 
> ...


I know that my father (now 70's) had no skills here, no trades, and couldn't speak the language, there was a lot of racism towards him, where no one would hire him, he found ways with some refugees and did whatever it took. He started his own business, and saved EVERY single cent he had to bring my mom, brother, and grand mother over. They had humble beginnings, and always reminded me what a sacrifice and priviledge it was for me to be here even though I didn't have the things other kids had. The other guys that he roomed with did the same. All of them except the two that died early from disease ended up as millionaires through businesses of their own.

They didn't wait for some elite to employ them, because they knew that it would be the 'White guy' that would be hired. 

I may be jaded because I know alot of immigrants who have been in the same boat, my father in law, had skills, and came him with nothing and has made it. The lesson I was always taught was be thankful you are in Canada where they will not shoot you, or arrest you for having an opinion. 

I know immigrants now, and it's really hard for them, my nanny is one of them, and I am doing everything I can to ensure that when she leaves my family she has a shot a making a decent living on her own. I did that for her cousin whom was my last nanny. I see how hard it is for them, and they are making next to nothing, but they are slowly getting ahead. 

My siblings and I all grew up wanting what the north american kids had. It sucked to be different and considered poor, my parents said they have given us the opportunity and will provide us with an education, it's up to us to make it. I was also taught that being a minority, I would have to be better to be considered just as good as the WASP. This has been true even in 2013. I see that still be the case with my kids. 

I believe the opportunities are different, but are they harder? I am not so sure. 



andrewf said:


> Everyone has the potential to be in the 1%? If we all worked hard and were virtuous, we could all be way above the average?
> 
> I think that's a tough statement to back up. Maybe if everyone bought a lottery ticket... many people don't have the aptitude to make millions.
> 
> I think it's worth noting that the rich have an interest in lower income inequality. In countries with high income inequality, even the rich have reduce life expectancy. There are positive externalities associated to living in a society with only moderate income inequality. I don't think the rich want to live behind razorwire fences in gated communities--but that's the price of high income inequality.


That's my point, if the people don't have the aptitude, then it will be harder for them. Lottery tickets wont' help these people, see the other thread. There are people that have much bigger diversity and challenges, yet, somehow they have been able to make it. There are people who have had illnesses, accidents, birth defects, you name it, yet, are somehow able to over come the odds and make it. Should we take away from them, and give to those that didn't have the aptitude? 

I am not saying that every SHOULD be in the 1%, as that would no longer be the 1%. What I am saying is that if someone REALLY wants it, and works, they may have a chance. The problem is most people are not willing to give up that much. People want the lottery ticket solution. Here's the thing, there is no gaurentee that a person can become the 1% and many are not willing to give everything they have to try. 

You are right, not every one has the aptitude to make a million dollars, if they don't they should stop complaining and accept that.


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## andrewf (Mar 1, 2010)

I don't think anyone is saying we should compensate people who don't manage to make millions. Seems to me that people are merely disagreeing with those who express the opinion that we should accept high income inequality and let the losers in life rot. I don't think that's a good idea for a society. It's not a society I would want to live in, and that is as someone who isn't dependent on the welfare state. That attitude gives you the the kind of violence you see in Chicago, Detroit, South Africa, etc.


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## Plugging Along (Jan 3, 2011)

^. Fair points indeed. Is it contradictory to accept that there will always be income disparity, but focus on more what can help those on the bottom. There has been such 'disgust' with those at the top end, yet, really are they the root of the problem with the poor? 

I think focuses on the rich to help the poor is really just bandaging the problem. Is the issue really income disparity, or is it that the poor don't have enough or something else?


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## sags (May 15, 2010)

I agree it isn't optimum to "take it away" from anyone after they have it.

I think the "distribution" somehow has to take place before it all slides across the table to the pockets of the wealthy.

Maybe a real minimum wage.........or a wage attached to productivity..........something that rewards a good work ethic.


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## Young&Ambitious (Aug 11, 2010)

wow the thread took an interesting turn!

In no way was my post meant to be race-oriented as that was not at all my intent.

To explain myself in more detail, my belief is that if someone wants something badly enough, they can -within reason- accomplish it. Yes it means sacrifice, but in countries like Canada, one's ability to go from $0 to much higher is possible, and this cannot be said about many many other places. I look at personal acquintances of my own for example. I am young and alot farther along than many in my age group or older because of the choices I have made regarding my future/finances/career etc. And those peers are those who had the same opportunities that I did or better.

In Canada, we have such a great standard of living, at ALL of our levels of income, compared to many other countries where really bad things are considered the norm and here they are a rarity in contrast. 

I think there are many people who have worked very had and made a lot of personal sacrifices to obtain their wealth and are unjustly persecuted because of their wealth. I don't want to get into specifics as I mean this only as a broad statement; this cannot apply to all and is not meant to. I am sure we can all think of leaders, whether corporate/political/non-profit etc, who have made sacrifices in family, friends, love etc to do what they do. These personal choices are not ones we would all be able to make, but it comes down to personal choice and where one decides to focus their efforts.

I believe that overall society is good and our tax system operates with the intent to redistribute wealth. Yes our system is not perfect, but I would take it any day over many other places. 

-sorry for the rant, but I cannot agree with being called a racist-even on a forum, it does not jive with my personal beliefs and I do not want to be associated with that in any way.


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## none (Jan 15, 2013)

I saw this movie and it brought this thread to mind:


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## sags (May 15, 2010)

That is hilarious..........

Even monkeys know BS when it happens.


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## Hawkdog (Oct 26, 2012)

I would be curious to see what the economy would be like if all of a sudden everyone went cheap.
For example if every american decided to hold onto to their vehicle for 12 years. How would that affect the big car company stock prices?
or would it have no effect? 

interesting concept.







MoneyGal said:


> "In the short run, _wealth_ equality is closely tied to _income _equality. *But in the long run, it's all about thrift, frugality, and saving -- in other words, cheapness*. If America's middle-class and poor people learn to be more cheap, then in 30 years, we will see a very different distribution of wealth."
> 
> http://www.theatlantic.com/business...nequality-teach-americans-to-be-cheap/273940/


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## none (Jan 15, 2013)

Japan.


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## Eclectic12 (Oct 20, 2010)

Dmoney said:


> How is the absolute amount of taxes someone pays not relevant?
> 
> I receive the same police services, libraries, protection from military, public transit, healthcare, education etc. as everyone else ...


I can see how this is pretty much true in Canada. However - since this thread is about the US, I'm not so sure that this is as widely true there.


Cheers


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