Re: 2012 Presidential Election - The Day after the Aftermath...
It seems we may agree on some things and disagree on other things.
First off, for the sake of discussion, let's say that the highest income earners today are earning more relative to the lower income earners today compared to the same ratio from 30 years ago.
I think this has been established.
The most important question; is this necessarily a problem?
Consider:
> we want to see people with 20 years experience in a field earning more than a newcomer to the same field, no? We want people to get better at their jobs from training and experience, do we not?
> we expect people working full-time to have higher earned incomes than semi-retired people or people working part-time, do we not?
> we expect professionals generally to earn more than people who primarily perform unskilled physical labor, do we not?
I can easily imagine a variety of scenarios in which a wider ratio between highest income earners and lowest income earners is a sign either of neutral events or even positive events: maybe our population is getting older, and so we have more retired people than before; maybe people have become less materialistic and prefer working more relaxed part-time jobs in exchange for a higher quality of life instead of working harrowing full-time jobs with miserable quality of life; maybe for every two low-skilled job "outsourced" overseas, we also create one new higher-skilled managerial / marketing / sales job here as well.
So, the challenge could revert back to you: why do you say an increase in income disparity "must be" a bad thing without even looking at quality of life measures?
My analysis is not inconsistent with yours as we are talking about two different things at this point. You still haven't demonstrated why increased income disparity "must be" a problem; however in the current situation, I say there is a pretty clear correlation between the increased scope of the so-called "safety net;" increased dependency from the people at the bottom of the income pyramid; and in turn, because the people at the bottom are falling further and further behind, income disparity is widening.
I don't think "the rich" have done anything wrong other than comply with the laws passed by others in order to get elected.
First, I will say I'm a management consultant and more on the side of 'liberal elite' than on the side of a 'lunchpail blue collar dem' side of things.
I am a full supporter of the incredible value of capitalism, the profit motive and the marketplace. There has never been any doubt that it is the top way to get to increased quality of life for society. That's not to say that it can't operate effectively without a set of guidelines.
Having said that, there needs to be disparity in income. I am a believer that those in congress should be making a million or more salaries...and that corporate ceos do deserve the large incomes they earn. Even if corporate boards can be poor judges of executive compensensation, entreprenuers, top executvies and top governing officials add massive value to society and they deserve to be compensated amounts equal to that value. I have never said anything to the contrary.
Having said that, the debt is massive and really cannot be addressed by cuts alone. Revenue will be needed; its a must. Taxing those who's big brains are tied to creating value...should not be hit so hard by taxes. But as I said, you must tax something....I don't want to tax businesses, I don't want that much of an increase in tax to affluent folks driving value...that leaves taxing money. Its not that we're taxing gains on money to death. Its that we're hardly taxing the income earned by money today. Its also fair to tax money vs. labor as I'd rather reward people who are slaving at difficult jobs (whether they're flipping burgers or working demanding exec jobs)...than sitting on their can as their million earns more millions and is taxed at a fraction of the rate.
Lastly, there is a disparity in wealth. It is as it should be that those adding massive value receive higher incomes...and therefore a disparity exists. So the reward system is approximately as it should be. But disparity's outcome is a big and growing problem. Looking at the outcome of society in its entirely, someone with a million salary...getting an extra 40k means little and just pads the savings account. For others, 40k a year can mean the difference between supporting ones family and being on the street. Many are hard working folks who are really trying to support their families and structural issues such as jobs going overseas, their jobs are drying up.
Likewise, its a challenge for moving the country forward. If you as a country rely on your labor force to create a competitive country...you need to give your labor force as many tools as possible to succeed. If the bottom half of the society is struggling to make ends meet...its harder for them to have opportunities to further develop their skillset. Also if you look at tax implications...federal revenues are much healthier with a balanced tax payer portfolio. If you have a small amount of affluent who pay little due to capital gains schemes...and the rest of society who are out of work...that reduces tax revenues, which reduces govt expenditures, which reduces the country's gdp and increases debt problems, etc. The greater problem is that this will increase as the US is great and growing in multi million dollar entreprenuerial jobs and bad with and losing lower middle income manufacturing jobs. This trend will continue and further increase wealth disparity.
So long story short, the system works well by rewarding those who generate value...but the outcome of the majority of wealth being concentrated in so few hands is a major problem for society in terms of health and opportunity...and this problematic disparity will increase with abandon and no solution in sight.
Cabinet departments.