Rich and Poor and In-Between, and The Damage the Government Does.

Rich and Poor and In-Between, and The Damage the Government Does. by The Elephant's Child

December 9, 2012, 7:07 pm
Filed under: Capitalism, Democrat Corruption, Economy, Taxes, The United States | Tags: Defining the Poor, Obama's Recession, Wealth & Poverty

As long as “the poor” are described as the bottom 20% of the income pile, we will always have poor people. This truism often gets lost when we talk about the poor. The poverty line or poverty threshold is the minimum level of income deemed adequate in a given country, and is considerably higher in developed countries than in developing countries.

Determining the poverty line is usually done by finding the total cost of the essential resources that an average human adult consumes in one year.  Absolute poverty is defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, health care and shelter. So you’ve got, definitionally: poverty, statistical poverty, relative poverty , absolute poverty or extreme poverty. Wikipedia goes on at great length with definitions. Anti-poverty programs, housing assistance, Medicaid, school lunches do not count as income, so in spite of all the emphasis on changing poverty with special welfare programs they don’t count towards changing the definition of poverty.

Poverty in rural areas is usually less onerous that in cities. If you have a  little bit of land, you can plant a garden, and if you have a gun, a fishing pole, and some twine for snares, you can partially, at least,  live off the land. Where I grew up, hunting season was when you filled up your freezer for the winter months.

When it comes to politics, people may talk about poverty, but they are really speaking of “income inequality,” something that leftists consider as being of great importance. President Obama said in his Osawatomie, Kansas speech:

In the last few decades, the average income of the top 1 percent has gone up by more than 250 percent to $1.2 million per year,” Obama said. “Now, this kind of inequality — a level that we haven’t seen since the Great Depression — hurts us all.

The current question is — Do higher taxes on the rich reduce income inequality? Not, says Conn Carol in the Washington Examiner, according to  a quick comparison of state inequality data and their corresponding tax codes.

According to the Center on Budget and Policy Priorities, the states with the highest levels of income inequality are: 1) Arizona, 2) New Mexico,  3) California, 4) Georgia and 5) New York. The CBPP report identifies a “more progressive tax code” as one way states can battle inequality, but it doesn’t identify the states with the most progressive tax systems.

California and New York have two of the most progressive tax systems in the country, and the highest State income taxes — only New Jersey and Vermont have a higher rate. Many on the left believe that stronger unions help to reduce income inequality, but there is no evidence that this is so. And take a look at the inequality between Union officials and the members. California, New York and New Mexico are all forced-unionization states. The three states with the least income inequality 1) Iowa, 2) Utah and 3) Wyoming are all right-to-work states.

The biggest difference is that states with the highest income inequality are the states with the highest illegal immigrant populations, a fact that Liberals are not about to mention. But it is a fact that needs to be part of the discussion. If you cannot talk about a subject honestly, you cannot arrive at successful solutions.

The discussions of income-inequality assume that people stay put in their income classifications, which they don’t. There is tremendous income mobility in America  — including among the rich. If you follow the Forbes annual list of America’s richest people, folks drop off the list with great regularity. The normal life encompasses all of the wealth divisions. First jobs are mostly poorly paid, people get promoted, take better jobs, marry, have kids, buy houses, save, retire and often get poor again.

When you have an amateur in the White House, intent on raising taxes on “the rich.” pretending that will decrease income inequality, we’re in trouble. Increasing taxes on the rich will bring in less revenue, drive up unemployment, and to increase income inequality — the revenue would have to be directed to “the poor,” but this is not the case. The revenue is not even to be directed to reducing the deficit. It is to be directed to useless Keynesian stimulus, and more useless energy projects. That’s the real problem.

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