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Is Inequality of Wealth Fair and Acceptable?

Is Inequality of Wealth Fair and Acceptable?

March 27th, 2017

inequality of wealth

Is it appropriate, legitimate, and wise for government to tax the wealthy in order to help the poor (i.e., redistribution)? I think this is largely a moral issue, though it clearly touches economics and politics. It is my belief that it is morally appropriate for a legitimate government to tax wealthy citizens to redistribute to help the poor. It’s not right to live in a society that is the richest in the history of societies,  has significant inequality of wealth, very low unionization, flagging wages, and so on; many millions are without health insurance, living paycheck to paycheck, not being able to afford daycare, and such. That’s not a good society. The rich need to be willing to propagate and contribute to a more horizontal society than that. It’s also wise, in addition to simply being moral.

How would this look? Is it food banks and easy mortgages? Well, potentially. Subsidized daycare is a well-intentioned and very helpful thing to do for the poor that the rich do not need. The rich don’t need Social Security income, either. In the “game of life” they are big winners and $2,000 a month is small potatoes. AFDC is probably helpful, but I think the gold standard is education. This is because we can “take the training wheels off” if everyone has access to good, low-cost or free education up as high as their brains and their performance take them. Is it wise to educate physicians and require they not go into specialties such as plastic surgery or neurosurgery? Sure. Rural and inner-city areas are starved for doctors. Heck, my brother in law is an endocrinologist and they are hard to find even in the suburbs.

When one considers that 3% of students in top universities come from the bottom quartile (20%) of socioeconomic status (the lowest social class), it becomes clear that those from well-to-do families have a big advantage in placing children in top schools. There is no reason in a good and just society for kids to be stratified in jobs and income based on mere social class. That is as crass as race, beauty, or body type. Make society a truer meritocracy by evening out the start kids get; ask the rich to pay for more than an even share. They have done very well in the system – usually because of special advantages such as top-quality education and family connections – so why not “pay it forward” and help out “the least among us?” This goes for corporate earnings, as well. There is no reason that GM or any other corporation that is more or less profitable year-over-year should have a year where they pay $0 in taxes. And under no circumstances should corporations harbor profits off-shore. We are all in this together. At least, that’s what we used to believe.

There is a caveat, though, and it is one that a libertarian would be easily able to highlight: legitimacy of government and the use of the money. For example, would a Donald Trump government be thought of as legitimate enough to qualify as the entity doing the taxation, considering all the nonsense he and his team are accused of (and probably responsible for)(e.g., Russia meddling in elections)? The DNC and Clinton and Wassarman-Schultz clearly have egg on their face, too. The Electoral College is an affront to democracy. Only a truly legitimate and non-corrupt government has any chance of taxing without a libertarian lampooning of the whole process. Note: I would point out, though, as was made very clear by even some right-leaning libertarians, such as Grover Norquist, that conservatives not only witness a dysfunctional and dubious government – they promulgate it! It’s called “drown the beast.” Noam Chomsky has written on this, among others. Essentially, one creates an unsatisfactory government, the people get frustrated, and then it can be defunded (i.e., lower taxation on the part of the ruling class). Warren Buffett famously quipped: “Something is wrong in America when I’m paying a lower tax rate than my secretary.”

How about the use: is it truly going to help the poor, in the wisest way? There have been social programs that ranged from “effective” to “questionably effective” to “more or less a wash” to “not likely effective” to “obvious waste of money.” We clearly must only institute social programs and engage anti-poverty interventions that are well-thought out (or “tried and true” or at least, well-researched). There is a whole process called “outcome research” that aims to answer the question, “Does an intervention lead to a certain outcome?” Just in general there have been some issues in government spending that leave a lot to be desired (especially in the military). Think of the $300 hammer and $800 toilet seat that the military has been caught trying to legitimize. A libertarian would be able to foil attempts at redistributing wealth if the way in which the money is spent is a failure.

So, in sum, barring certain objections, it seems both moral and wise to try to get closer to the economic situation that America experienced back in the 1950s, for example: there was growth, there was manufacturing, there was a high standard of living. Education, unionization, and a very progressive tax system reigned. Inequality of wealth was nowhere near what it is now – and that has real moral and real measurable effects on people and their lives. A more horizontal distribution of wealth was a wonder to behold for decades. It made America great. Can we make America great again, as it were?

 

Here are some quotations about inequality of wealth, economic justice, and

prosperity. Many more can be found here, in the Wisdom Archive.

 

“If the person without the goods is starving, and the person with them has plenty, then morality demands a split: the money is needed more by the starving. The starvation of the poor demands redistribution from the rich.” ~ Simon Blackburn

“Lycurgus’ second task, and indeed the boldest he ever undertook, was the redistribution of the land. There was extreme inequality here, the city overburdened with poor and needy people, while all the wealth was concentrated in the hands of a few. To make an end of arrogance and envy, crime and luxury, and of the still older and more serious diseases of poverty and riches, he persuaded the citizens to put all their land together and divide it anew, and live together as equals in means of livelihood, striving to surpass each other only in virtue. Disgrace for evil-doing and credit for noble acts would be the one mark of distinction or inequality among them.” ~ Plutarch

“An ideologically broad range of financiers and elite business managers—Warren Buffett, BlackRock’s Larry Fink, Vanguard’s John Bogle, McKinsey’s Dominic Barton, Allianz’s Mohamed El-Erian and others—have started to speak out publicly about the need for a new and more inclusive type of capitalism, one that also helps businesses make better long-term decisions rather than focusing only on the next quarter. The Pope has become a vocal critic of modern market capitalism, lambasting the “idolatry of money and the dictatorship of an impersonal economy” in which “man is reduced to one of his needs alone: consumption.”” ~ Rana Foorhar

“Growing inequality, combined with a flawed system of campaign finance, risks turning America’s legal system into a travesty of justice. Some may still call it the “rule of law,” but in today’s America the proud claim of “justice for all” is being replaced by the more modest claim of “justice for those who can afford it.”
~ Joseph E. Stiglitz

“…the real purpose of socialism is precisely to overcome and advance beyond the predatory phase of human development.” ~ Albert Einstein

“One of the important lessons of history is that those who own, rule. Even in titular democracies, the powers of ownership gradually trump the power of the ballot and play and often decisive role in shaping cultural values. For these reasons, growing living economies that democratize economic relationships in the deepest sense is a leading edge of the work….” ~ David C. Korten

“Concern for the public good must become the animating force of our economic order.”
~ Marjorie Kelly

“[A more demanding, civic conception of freedom reminiscent of Thomas Jefferson or the New Deal], at the very least, can remind us of questions we have forgotten to ask: How can powerful economic forces be brought to democratic account? Is self-government possible under conditions of a global economy? In a pluralist age marked by multiple identities and complex selves, what forms of commonality can democratic societies hope to inspire?” ~ Michael J. Sandel

“Real change would mean grappling with a deep, multi-decade shift from a society in which the state, the private sector and the individual all shared responsibility for economic risks to one in which individuals are increasingly left on their own to pay for the trappings of a middle-class life — healthcare, education and retirement — while corporations capture a record share of the country’s prosperity without necessarily reinvesting in the common good.” ~ Rana Foroohar

 

Here are a for and an against article about inequality of wealth and just distributions of revenue.

economics justice libertarianism redistribution of wealth socialism
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