What are the arguments against income inequality, what can be done about it

[Juche]

Arguments I have heard against it

Larger % of the workforce is devoted to managerial roles (lowers productivity)
Political partisanship goes up
The wealthy can buy more and more influence
Everyone else struggles to pay for necessities
Higher crime rates


Aren't there other arguments against it? I thought there were. I am starting to get the impression that fears of income inequality are becoming global. Latin America is taking the lead on addressing this problem, but the US, China, India, etc. have all started to talk about changing this problem.

So what works?

Progressive taxes and wealth redistribution (universal healthcare, social security, etc)
A labor movement to organize people at the bottom
Left wing politics




I'm curious because there is enough wealth on the planet right now that per capita income comes to about $8000 in USD, and likely higher in PPP. But we are rapidly seeing the Gini coefficient grow higher and higher.

Has anyone else heard calls to address income inequality? Not just in the US or Latin America (which is taking the lead. I think Europe has already conquered this problem) but in developing nations in Asia or Africa too?

[Enrique]

1. the Pope

In "Caritas in Veritate", which was released last summer and which I thought didn't get enough attention...

http://www.vatican.va/holy_father/benedict_xvi/encyclicals/documents/hf_ben-xvi_enc_20090629_caritas-in-veritate_en.html

The dignity of the individual and the demands of justice require, particularly today, that economic choices do not cause disparities in wealth to increase in an excessive and morally unacceptable manner<83>, and that we continue to prioritize the goal of access to steady employment for everyone. All things considered, this is also required by “economic logic”. Through the systemic increase of social inequality, both within a single country and between the populations of different countries (i.e. the massive increase in relative poverty), not only does social cohesion suffer, thereby placing democracy at risk, but so too does the economy, through the progressive erosion of “social capital”: the network of relationships of trust, dependability, and respect for rules, all of which are indispensable for any form of civil coexistence.

[PDJane]

2. Yes, I've heard calls.........

Mostly from the left. The right seems to want to make the problem worse, grabbing every dime they can while they can.

As it stands now, the west is getting rich on the third world...and no, I'm not at all kidding.

[Oregone]

3. When people make too much, their tax burden becomes more than what most people make a year

This causes them to fly expensive planes into IRS buildings of course, as well as burn their homes down, to express outrage about their undue hardships caused by their ginormous tax burden.

[slackmaster]

4. There is nothing wrong with income inequality, but some are badly undercompensated and overtaxed

Some people produce more than others, because they work harder or they have natural talents that make their services valuable, or both.

That aside, I think people who care for children and disabled people, and in general teachers, are seriously underpaid. The poor pay a heavy penalty by having to buy things in small quantities, and by paying sales taxes.

I don't support government-mandated wealth redistribution at all. People who earn their wealth should be able to keep and enjoy it. They should be encouraged but not obligated to share it with others.

I strongly support tax breaks for charitable activities and contributions. Income taxes should be progressive, but not to the point where they kill incentive for highly productive people. Sales taxes are regressive and should be replaced with something that doesn't hurt low-income people as much. There should certainly be no sales taxes on basic life necessities like food and medicine.

[Oregone]

6. There is plenty wrong with it in its current form

CEOs making 262 times what workers make? If that isn't a factor that contributes to poverty (which almost all other social problems stem from), I don't know what is.

"People who earn their wealth should be able to keep and enjoy it."

"Earn" is sort of a funny term, at the end of the day. Its tough to use any objective metric to quantify the amount and value of hardwork, other than by that which the market will pay for (and thats really not some objective, universal scale anyway). Most of the top earners--you know those cited by Forbes--started in a fortunate position with the best education, or were alloted seed money or inheritance anyway (a fact). "Earn" really doesn't mean anything, other than that the engineered system has been engineered to pay the elite more than those who are not, irregardless of the "value" of their labor. When the term loses all meaning, an argument based on this odd concept just doesn't hold water.

"I don't support government-mandated wealth redistribution at all"

The problem is that the system (capitalism, mind you) causes a perpetual growth in income disparity (and thereby, poverty and a consolidation of power/resources). To allow this to go on infinitely will lead to a revolution or a totalitarian system to keep order. The very tax code you cite, and suggest should be progressive, actually is a form of wealth distribution in itself (but not enough). It attempts to build the commons for all to share disproportionally from the rich. It is redistributing more wealth from the richest private people and giving it to all. Its odd that you think people should not be obligated to share, but then you say "Income taxes should be progressive"

[Juche]

7. What you are describing is a form of wealth redistribution

Progressive income taxes, tax cuts on the poor, programs for the disabled, etc.

The problem is that in the last 30 years almost all the GDP growth has gone to the well off while their taxes have been drastically cut. For most people their taxes have gone up (payroll, sales, property, sin taxes have all gone up), their wages have stagnated and their expenses (education, real estate, health care) have gone up.

Our system is not sustainable. If health care and education costs go up 8% a year and wages go up 3% a year, then wages double in 25 years while education and health care will be almost eight times higher by 25 years.

We need programs to ensure that wealth creation is distributed among the population rather than concentrated at the top. Ever since Reagan, that is what has happened. Globalization has made it worse and it is now a global phenomena which is causing countries all over the world to start to worry about it.

[Zoeisright]

5. The economy collapses.

There. That's the best argument against income inequality. Happened in 1929 and it happened in 2008. And it will happen again unless taxes on the rich are raised dramatically.