Quote:
Originally Posted by blankall
The Western World is at a stage of economic crisis. Wages have clearly fallen below where they should be, and the cost of living continues to rise. The issue with simply raising employees salaries is that many small businesses are already stretched thin. It's great to have major corporation pay out of their billions of dollars of profits to help their employees. When you're raising wages across the board and expect a mom and pop restaurant to pay a dishwasher $50k/year plus benefits, it's another matter.
At the end of the day, the gap between rich and poor has become so extreme, and it will get worse as we stare down the incoming wave of inflation.
This is a horribly complex issue that I don't know the answer too. A few reforms I think could be helpful:
1. Increase the tax base by limiting small corporations. The point of lessening the tax rate for corporations was to help out small businesses and allow businesses to carry over funds year over year. It wasn't to have every CEO set up a personal corporation and avoid taxes.
2. Taxes on principal residences. Obviously this is going to be controversial. The principal residence exemption was meant to allow people to sell their properties and move to a new one without paying tax. You could simply allow a roll over to deal with this, where tax is deferred as long as a new property is purchased. The current gap between generational wealth is just too extreme. The exemptions weren't meant to provide people with 7 figure exemptions, while everyone else rents.
3. Economic reforms to encourage local small businesses. These businesses are the lifeblood of any society and all that stands between a society and total corporate domination. We have a system where that seems to give more breaks to larger businesses, while punishing the smaller ones.
4. Steps have to be made to deal with the intergenerational wealth issue. Is not just an issue of wealth between generations but also social mobility. The wealth of your parents should not be determinative of your own wealth.
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Can you expand on this one a bit? I get it in principle, but my wife and I are planning and working really hard to give our kids a leg up. Like, I could have a bigger/better house and newer cars if I wanted, but my financial goals are more directed at my kids. I want to help them buy their first houses, pay for their university educations, and just generally help them move forward in life moreso than making things materially better in my own.
I look at any wealth my wife and I accumulate as familial wealth, since you can't take it with you. I'm planning and hoping we can start some generational wealth in my family for my kids and their kids by making really long-term decisions now versus just decisions that affect me until I'm 85, say. I wouldn't want a system where I'm incentivized to buy a new car to just blow my money over saving, growing and transferring wealth from one generation to the next.
Like, I want to buy my kids and future grandkids more financial security. Some people rather travel and live in a huge house. I don't want to take a tax kick to the nuts because of how I'm choosing to spend my money.
Could be I just don't get what you mean, though.