No Freaking Way! My friend’s answer to wealth redistribution.
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No freaking way...
I was talking to a friend the other day about the ongoing debate in the United States about wealth inequality and what we as a nation should do about it.
My friend told me that there was “no freaking way” that we will significantly redistribute wealth because “rich people will just move their money or themselves out of the country.” The emotion behind this statement was defiance, he wasn't about to let a bunch of “asshole lazy poor people” take his money.
But the crazy thing is, the people arguing for higher taxes and wealth distribution are not coming after his money, they're going after people who have a net worth of $100 million plus. And my friend, as well as I, are in the same wealth class, middle class. So we are a long long looooong way from a hundred million dollars. So why did my friend adamantly defend a bunch of rich folk that aren't even in the same world as he is financially?
Don't take my money...
I'm going to try a little pop psychology here. I think my friend said this because he works hard for his money, as do I, and everyone reading this. And he doesn't want people taking his money that he worked hard for, which is understandable. But my friend is not thinking about a couple of things.
Because of our progressive tax system, my friend and I pay lower taxes than someone else who earns more than we do. Higher earners subsidized our low tax rate. Essentially, they give us money.
His and my employer give us discounted health insurance because people who make more than us within the company pay more as a percentage of their income to subsidize the health insurance of people who make less. People who make more, give us money.
When the national government gives money to our State to pay for our local road repair; that means that the local government will not raise our taxes to pay for it instead. Essentially, hundreds of millions of Americans will pay for our roads, instead of just a few thousand, which significantly reduces what my friend and I will pay out of our pockets. Other people gave us money.
Social Security and Medicare is heavily subsidized by wealthier people and debt, though indirectly. That means my friend did not have to pay that much out-of-pocket when his mother got cataract surgery. Someone else gave him money.
And in the past 12 months, a large portion of the US population received two stimulus checks. My friend was super excited, and used the money to pad his savings. And not one comment on where the money came from.
In Conclusion...
There are a lot of subsidized programs in the United States that people take for granted and do not fully appreciate where the money actually originated, usually from people who make much more than we do.
So as far as my friend’s statement goes, all those “asshole lazy poor people” trying to take his money. Well, my friend, me and many others should probably look in the mirror once in a while and reflect on WHO is giving us their hard earned money.
Stay frosty people.
30% allocated to ph-fund.
Hello @fijimermaid
The answer is very correct, otherwise we would have already overcome this enormous gap that separates us economically and stratifies us as a class, this is a truth that historically has marked us as a society, positioning a group in power, and leaving another even larger group receiving subsidies. Thank you for sharing your point of view.
Yeah, progressive wealth redistribution (though taxation, debt monetization and deleveraging) is to encourage that a large portion of a nation's wealth is enjoyed by the majority of people, which makes civil unrest and revolution less likely. Contrary to popular belief in the United States, progressive wealth distribution is not meant to be fair, it's meant to ensure civil stability.
@tipu curate 3
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Thank you @tipu.
Things happen a lot more different in my own country, the poor are the ones who most often have to pay more taxes and everything in the country revolves around the politically wealthy ones who almost pay little or no tax.
Going into the political and corrupt system of my country will certainly bring pains to my heart but wealth re-distribution may never happen in a country like mine unless everyone fights for himself/herself and of course politically greedy ones are forced out of power.
I agree with you. Even though my post was exclusive to the United States. There are places around the world that not only need wealth redistribution, but also economic reforms to initiate growth so all boats rise in the tide.
My latter point about economic reforms, applies to a lot of places in the world, including the United States. If there is economic growth, then most people are happy.
Hi @fijimermaid
Another interesting choice of topic. Sorry for such a late comment - just had a chance to read your older post.
Out of curiousity: What range of yearly earning in your state would you attribute to middle class?
I think reality is, that currently most of those money originated from FED printer. Not from people who make much more than we do. It originated from idea of using our future earning power to boost current economy.
Have a great weekend,
Piotr
"Out of curiousity: What range of yearly earning in your state would you attribute to middle class?"
$35,758 – $107,273 per year
"I think reality is, that currently most of those money originated from FED printer. Not from people who make much more than we do. It originated from idea of using our future earning power to boost current economy."
It's definitely both. Wealthier individuals do support more of the tax base than people in lower income brackets, and about 20% of federal spending is supported by debt, which is monetized by the Federal Reserve, like you said.
That 20% or 1 trillion dollars that is supported by debt (Fiscal Year 2020, not including COVID 19 spending), compared to how much wealthier individuals are covering less wealthy individuals tax base, I don't know the answer to that. I guess it depends on where you draw the line, for example, households that make more than $200,000 and less than $200,000. And who is covering what to see how much of the budget is supported by debt versus progressive taxation.