Quote:
Originally Posted by opendoor
But we've always lived in capitalist society (probably more so in the past than now even), but the divide between rich and poor has been much lower in the past than it is now. Just using the US as an example, from the 40s to the 70s, the top 20% of earners made about 6 to 7 times what the bottom 20% of earners did on average. Since 1980 that's risen dramatically and now it's closer the 15 times more. Canada's divide is less dramatic, but it's headed in the same direction.
And we're not talking about CEOs vs. janitors here, we're talking about 40% of the adult population being compared. Some of this is due to external factors like globalization (it's harder for unskilled workers to make as much now when their jobs can be outsourced) there's no question about that. But a large part of it is also based on things as simple as tax rates. The greatest eras of income inequality have been in eras with extremely low marginal tax rates for upper income earners (1920s and 1980 to present). Whereas the richest Americans were paying marginal tax rates in the 70-90% region through the 40s, 50s, 60s, and 70s, there is now a huge controversy about raising marginal rates back up to 36%. Here's a chart that shows those marginal rates over time:
Now I'm not suggesting that tax rates should be hiked way up for the upper income earners, but it's important to remember that government policy has a huge effect on income distribution. It's not simply a matter of the free market determining this.
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I don't understand the facination of the gap between the 'rich' and 'poor'. The poorest 5% of Americans are richer today than almost any other time in history. The living standards of the poorest 5% of Americans are better than any other group in the past. And the ability to find mobility between economic classes is unparalled in history.
If anything, it seems allowing a large gap in income in a democratic and capiltalist country may be the way to bring the poverty level up and also provide incentive for labour.
Would you be willing to give up your car in order to make sure your neighbor can't drive a ferrari? It doesn't make sense to me.