Most people making arguments against income inequality in the US seem to want income to be more equal down to and including themselves, but never very far below themselves. They want it to be equal within the US, but I have a hard time believing they'd be as excited to extend that same income equality worldwide. Doing so would see even the poorest Americans taking a massive cut in lifestyle and living at a level of poverty most people in this country have never seen or experienced.
It's striking that much of the OWS movement was made up of "the 2%" ... angry that they weren't in "the 1%".
First world, college educated people...who'd either picked the wrong majors, or didn't want to pay back their student loans, etc.
Your money doesn't earn you more money doing nothing. In a free market, you need to use it efficiently and in a way that provides value to other people. If you are careless or unlucky you will lose it.
To clarify, it's not free money.
And even if they were making decisions for themselves, the amount they earn is primarily based on the amount they have to invest, not the quality of their choices. Are the choices of someone who earns 1% on $1billion really 100x as valuable to society as someone who earns 10% on $1million?
If the wealthy make money by consumer surplus, then that money is honorably had and we want them to make more of it. They are doing well by doing good.
If the money is made by rent-seeking, then we should tax it.
Now all you have to do is figure out rent-seeking. :)
Rents are complicated to talk about, but the canonical example from Ricardo is land that is worth more because of where it is causing it to be more productive.
Take a parking lot in Manhattan - it'll be worth more and derive more income than the same area in Kansas farmland. The owner does nothing to add this value - the value is created by the other people and buildings surrounding this parking lot.
Since this value is socially created, it's more justifiable to tax it on behalf of that society.
Since our alternative is to tax labor, it seems more equitable to tax rents.
This might be a problem with say, Micheal Jordan, who trades on his name for income that's pretty clearly his but it's still income from rents - the desire of others to use his fame creates the value, not anything he does in particular.
Nobody said this has to be easy.
Why is realising that people are going to want cars in future more valuable than realising people are going to want parking in Manhattan in future?
EDIT: IMO the problem is that the rewards for creating capital are indefinite, and that this just becomes more noticeable when you're talking about housing.
Yes, there's a certain uncomfortable similarity to physiocracy.
Like I say, it's not a really easy thing to reason about. I can't really do it either past a rudimentary level. Your example "parking in Manhattan" is pretty good, but the car itself provides its own utility.
The utility for the parking lot is proved from others owning cars.
Likewise, gasoline provides its own utility. But oil underground? Probably rents.
Rents-thinking comes from Ricardo, but it's strongly associated with Henry George. Fascinating guy; "Poverty and Progress" is a worthy read.
The choice to produce cars seems analogous to the choice to buy land.
Once that choice is implemented, owning a factory (or share of a factory) seems no more and no less active nor noble than owning a piece of land.
One can then own land without actually doing anything with it - you can let it out at rates for others to use. You can't just let a car factory sit. And if you just own the building and land, and do nothing else, then yes- you're just charging rents. But generally owners have to work to own a factory, if at nothing else than making operation policy decisions.
Perhaps a trip thru "Poverty and Progress" is in order? George is better at this than I am.
What I'm talking about simply owning the factory (or perhaps a better example is owning a car company, without managing it yourself).
I'm familiar with Georgism, but I had a similar confusion about land value tax. I just don't see what's so special about land compared to capital goods. I'd rather have a general wealth tax.
I'd just like to see rents in general taxed rather than labor taxed. The theory of rents provides a means to distinguish between ... "socially useful" wealth and "sort of parasitic" wealth."
As you note, there's nothing original about this.
But in any case, I'm not suggesting a labour tax, I'm suggesting a wealth tax. I think my argument is similar to George's: just as LVT encourages efficient use of land, a wealth tax encourages efficient use of wealth in general.
But so do those who are against redistribution. I've yet to meet a person who was against redistribution, as well as against certain benefits they get from tax money (police force, etc).
Taxpayer provided services is income redistribution. Some people's incomes are being used to provide other people services.
Everyone wants free shit. That's why your comment is a bit of a non-statement. It's similar to saying "Everyone likes food". Or "Everyone likes money." It doesn't explain anything.
And I think your stretching your definitions to suit your level of income redistribution.
The conversation of how much and what type does need to occur. I just wish everyone realized that it is income redistribution. Your level of what your comfortable with is simply different from others.
>You can make the argument that I'm effectively paying for an insurance policy, or that by supporting the recipients I am supporting the economy which in the end supports me, but the relationship is not nearly as direct.
It is not very direct with fire and police, either. With both of them, it is effectively an insurance policy. If you benefited from the police, it is not clear you contributed in taxes as much as is needed to get that benefit. And I'm sure you would not advocate a system where you get only as much police benefit as what you put in.
I've met plenty. There are those who relish the opportunity for free market alternatives to public police forces.
You've met them for police forces. But have you met any that are against all taxpayer supported services?
The big one being: No military?
Other than that: No transportation services (road maintenance, etc). I've met people who quickly say they want that privatized and voluntarily paid for, but when I really make them think about it, they change their mind quickly. There are always places they want to drive to that they do not want to pay for.
And even if you have met such a person, they really are a minority of people in the group who are against wealth redistribution.
No, it wasn't. A minimal peacetime army and, for most of its history, a substantial navy -- with reliance on that navy, the oceans, sheer size to provide depth, and the fact that only a small number of countries had land borders to provide mobilization time for the army in time of need was a thing for the US prior to WWII.
> See any good bio. of Eisenhower for details
Any bio of Eisenhower (or any non-fiction work more generally) that claims the US had no military prior to WWII is, ipso facto, not a good one.
I would have thought the reference to Eisenhower's bio. would be enough to show that there was some army.
The Navy varied dependent on who was in charge.
Sure, but its not even approximately the same as no military (and its much more true of the Army than the Navy, except, IIRC, for two periods -- from the end of the revolution to 1794 when there was little (and, from 1785, no) Navy, and about a decade somewhere around 1870-1880 when there was a very small Navy.
From just before the turn of the 20th Century onward, the US at no point didn't have a world class Navy.
That's the tradition, but its not entirely true; the Continental Navy was formed in 1775, but disbanded 10 years later in 1785, and it was nearly another decade before the US Navy was formed in 1794.
In any case, anything in the 18th century is well before Eisenhower... ;)
I didn't mean literally "no military" but we've had extreme drawdowns after every conflict . By "no military" in scare quotes I mean that there was an aversion to a standing army dating back to the Revolution. I was ( apparently overly simplistically) identifying that as a principle. The Legislature literally did not want the Executive to use the standing army as a political tool.
Obviously, the inventory ... lag of ships means that we'd have larger navies in some peacetime intervals than others. We only had permanent forces after the advent of the Cold War.
First of all, he uses this as a thought experiment and a sort of alternate method of constructing a model.
Second, it sort of assumes a frictionless universe in which there is much weaker national/tribal/city-state affiliation.
It's a good thing to know about, but I'm skeptical that actual humans as they currently are can handle it.
I think that "tax rents" is the method whereby this can be done, if it can be done at all.
How hard is that?
The abstract says it in a bit more formal academic tones: " The findings suggest that for most people, the motivation for redistribution is financial self-interest".
But put it to a vote to pretty much any group of people, at any time, in any place, and they'd prefer to steal from their neighbors than they would to work themselves.
The trick of civilization is curb this impulse, thus allowing the generation of positive sum games.
As Milton Friedman once said (and apologies for butchering this; it's from memory): the wonder of capitalism is that it's the only system that restrains the capitalists.
...by which he means that every society has rapacious take-no-prisoners people.
The trick is to channel that into METAPHORIC rape and take-no-prisoners, and away from the literal implementation.