

Why the (US) Rich Are Getting Richer - boredguy8
http://www.foreignaffairs.com/articles/67046/robert-c-lieberman/why-the-rich-are-getting-richer

======
akamaka
This is just another in a series intellectually feeble articles on the wealth
divide. Compare this recent study from Canada:
[http://www.policyalternatives.ca/publications/reports/rise-c...](http://www.policyalternatives.ca/publications/reports/rise-
canadas-richest-1)

Both of these pieces offer no in-depth analysis of the data and almost no
international perspective. Without offering any justification, they quickly
point the blame at the typical scapegoats of "the bankers who caused the
crash", high CEO pay, and tax rates. They rely on broad and readily available
statistics, and haven't done any genuinely new groundwork.

I'd like to see a better study which considers these factors:

* Choosing a meaningful dividing line (Why choose to compare the top 1%, and not some other fraction?)

* Breaking down sources of income (Investment income, regular pay, stock option grants)

* Breaking down income by industry (Medical, law, engineering professionals; public servants; finance professionals; entrepreneurs; corporate managers; entertainment figures)

* Detailed comparison of wealth divides in other countries

If anyone can point us to this sort of study, please speak up!

~~~
BarkMore
Yes, it's feeble. The article does not connect some of the trends it discusses
to the problem of income inequity.

For example, there's no discussion of how increased taxes will fix income
inequity nor is it obvious why it will. Gates, Buffet and other superrich got
to where they are through long term capital appreciation. Increasing taxes
will have an impact on them, but they will still be superrich.

------
sophacles
I thought it was because the rest of us were just lazy freeloaders or
otherwise morally undeserving!

~~~
T-R
Sarcasm? Not Sarcasm? Purposefully ambiguous?

~~~
barrkel
From where I sit, it's very clearly sarcasm.

~~~
T-R
That was my initial thought, but I'm gonna have to cite Poe's Law on this one.

~~~
sophacles
Oh wow... I'm flattered.

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impendia
Something I've long been curious about, as an academic who is removed from the
startup culture and never really gave a damn about getting rich.

Suppose that the (US) marginal tax rate on income or capital gains over $500K
was raised to 75%.

How much would this affect entrepreneurs' willingness to work their asses off
on their startups?

~~~
rbranson
To be honest, probably nothing. Rich people are pretty much pros at operating
tax shelters, which explains the famous Buffet quote about how he pays a lower
tax rate than his secretary.

~~~
boredguy8
No, it's better/worse than that. Long-term capital gains (held more than one
year) are taxed at 15% for someone like Buffet. He paid a lower rate (17.7%
combined short-term and long-term) on taxes than his secretary _without trying
to avoid taxes_.

------
CWuestefeld
Getting tired of the inequality articles.

~~~
getsat
This coming from someone who lives in a city (Milford, NJ) with a median
family income of $62,167 USD that is 97% white. Ouch.

(Also, today I learned about HackerNewsers from your profile. Very cool site!)

~~~
CWuestefeld
If you're expecting to get me upset by looking up my demographics, you're
wrong. I wouldn't have posted that if I cared. But it's funny how much you
think you know about me and how wrong you are.

For example, I don't live in Milford, NJ. That is, in fact, my mailing
address, and if you plug that into your GPS you will indeed arrive at my
house, but the world is slightly more complicated than that -- as is the topic
of the OP. I'll leave it to you to puzzle out how both of those might be.

Your statement about Milford being "97% white" reveals more about you than it
does me, I think. It reveals that, for some reason, you believe that race is
important; why else would you go looking for the racial makeup of my
(purported) community? It reveals little about me, since you'll find that
(assuming you're using Wikipedia's numbers) my household would make up over 3%
of the town's non-white population (if I did indeed live in Milford).

I happen to fall into the largest age cohort cited. And if you knew my
address, you'd also see that my property is actually smaller than the minimum
zoned acreage, being grandfathered in.

What the heck does any of this have to do with (a) equality of Americans; or
(b) the fact that we've seen so darned many of these articles recently on HN?

~~~
getsat
Sorry, my intent was not to belittle or enrage. I was merely pointing out the
fact that, based upon provided data, you, as a developer, are quite far
removed from the lower end of the income spectrum. Your comment seemed to give
a vibe of "I don't care about this because it doesn't affect me and the fact
that I am even hearing about it is pissing me off." My apologies if that is
not the case.

(Disclaimer: I am not from the USA.) White people make up the majority of the
population in the northeastern USA. Minorities tend to be poorer. That's a
statistical fact. A developer in a white town is _probably_ doing better than
most people around him.

It's an important issue. I hope there are more articles about this topic.
They're more interesting than articles about del.iciou.us being killed by
Yahoo.

~~~
anamax
> Sorry, my intent was not to belittle or enrage. I was merely pointing out
> the fact that, based upon provided data, you, as a developer, are quite far
> removed from the lower end of the income spectrum.

Bite me.

You don't know anything about where he comes from or how he got where he is
now. Heck - you don't even know that he's not one of the saintly 3%.

You're just looking to claim some high ground so you can start a pissing
contest.

> (Disclaimer: I am not from the USA.)

Perhaps you should refrain from comments that depend on knowledge that you
don't have.

~~~
getsat
Do I really need to have been born in the USA to be able to read published
statistical data about the population? That seems to be an odd dependency.

As I said, my intent was not to belittle, nor is it to "win" any kind of
contest. The desire to be part of a winning team has turned the tide from
reason and logic to emotion in modern discourse (and especially politics). I
don't care if I don't "win" as long as I'm forced, at a minimum, to reevaluate
my position and beliefs.

Also, what do you mean by "saintly"?

~~~
anamax
> Do I really need to have been born in the USA to be able to read published
> statistical data about the population?

I'm not disputing your ability to read. I'm pointing out that your conclusions
were faulty. Was I wrong to assume that more knowledge might have helped you
avoid the error?

> As I said, my intent was not to belittle, nor is it to "win" any kind of
> contest.

Then you should work on ensuring that your intent is reflected in what you
write.

> The desire to be part of a winning team has turned the tide from reason and
> logic to emotion in modern discourse (and especially politics).

Projection....

------
cgrubb
Author's reasons for phenomenon in brief: (1) tax system not progressive
enough; (2) govt hard on unions.

------
lotusleaf1987
| Income inequality in the United States is higher than in any other advanced
industrial democracy and by conventional measures comparable to that in
countries such as Ghana, Nicaragua, and Turkmenistan. It breeds political
polarization, mistrust, and resentment between the haves and the have-nots and
tends to distort the workings of a democratic political system in which money
increasingly confers political voice and power.

Queue the libertarian rhetoric to rationalize this with another meritocracy
(blame the poor) argument.

~~~
hnal943
How about the Paul Graham argument that income inequality is not a problem if
it means that everyone's standard of living is raised?

<http://www.paulgraham.com/gap.html>

~~~
chailatte
Income inequality can be ignored (by politicians) until a large segment of the
population cannot find jobs and can't afford food/gas/healthcare. Oh wait,
we're there.

Census estimates suggest 1 in 6 Americans live in poverty

[http://www.latimes.com/news/nationworld/nation/wire/sns-
ap-u...](http://www.latimes.com/news/nationworld/nation/wire/sns-ap-us-census-
poverty,0,7047443.story)

1 in 7 Americans rely on food stamps

[http://money.cnn.com/2010/12/21/news/economy/food_stamps/ind...](http://money.cnn.com/2010/12/21/news/economy/food_stamps/index.htm)

Labor Force Participation Rate Drops To Fresh 25 Year Low, Adjusted
Unemployment Rate At 11.7%

[http://www.zerohedge.com/article/labor-force-
participation-r...](http://www.zerohedge.com/article/labor-force-
participation-rate-drops-fresh-25-year-low-adjusted-unemployment-rate-117)

~~~
anamax
> Census estimates suggest 1 in 6 Americans live in poverty

Which definition of poverty are we using?

I have two. According to one, 90% of Americans live in poverty. According to
the other, less than 1% do. Which one is correct?

Note that the 1% is based on world-standards for poverty....

> 1 in 7 Americans rely on food stamps

And taxing rich people more is going to change that how?

Govt aid is basically a no-work/low-pay job. How is reducing the amount of
money in the private sector going to put more people to work?

Note that reducing the amount of money in the private sector doesn't
necessarily increase the amount of money in the public sector. The US govt has
never managed to collect more than 20% of GDP in taxes, so if your plan
assumes that we can, you get to explain why this time will be different.

