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Distribution of Wealth 
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Post Distribution of Wealth
.
.
The poor and the middle-class are being economically mugged.
Next Melania will be telling us to eat cake, and we'll be singing:

Soon the Gypsy Queen
In a glaze of Vaseline
Will perform on guillotine
What a scene! What a scene

— ELP

nytimes.com/2019/07/20/opinion/sunday/i ... e=Homepage

Here is the study the Times editorial is based on. itep.org/wp-content/uploads/whopays-ITE ... P-2018.pdf

And here is the problem:

"Low-income households in Illinois pay about 14 cents in state and local taxes from every dollar of income, while the state’s most affluent households pay about 7 cents per dollar.

That gap between the poor and the wealthy in Illinois is one of the largest in any state, but the poor pay taxes at higher rates in 45 of the 50 states, according to a 2018 study by the Institute on Taxation and Economic Policy.

It’s a bipartisan phenomenon. The institute’s list of the 10 states with the most regressive tax systems — the states doing the most to increase inequality through taxation — also includes conservative Tennessee and Texas, purple Nevada and Florida, and liberal Washington."
— NY Times

That's all I'm saying.


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Post Re: Distribution of Wealth
It's probably true to say that the USA will never apply Marxist economic analysis to its budgetary requirements, I would think.



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Litwitlou
Sun Jul 21, 2019 10:25 am
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Post Re: Distribution of Wealth
vizitelly wrote:
It's probably true to say that the USA will never apply Marxist economic analysis to its budgetary requirements, I would think.


Let's hope not. My family and I have already fled one Marxist-Leninist regime.


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Sun Jul 21, 2019 4:24 pm
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Post Re: Distribution of Wealth
Litwitlou wrote:
.
"Low-income households in Illinois pay about 14 cents in state and local taxes from every dollar of income, while the state’s most affluent households pay about 7 cents per dollar.

That gap between the poor and the wealthy in Illinois is one of the largest in any state, but the poor pay taxes at higher rates in 45 of the 50 states, according to a 2018 study by the Institute on Taxation and Economic Policy.


This is no big surprise to economists. Schools are one of the biggest budget items for State and Local government. If you think of school as a necessity, then its cost is likely to be a much heavier burden on the poor than on the rich. Let's say it costs 6000 per year to provide basic education to each student, and maybe the rich spend 10,000 each because they feel like it. Since local taxation is the basis for paying for schools in nearly every state (Hawaii is the biggest exception, but a few others engage in compensatory finance), and since people tend to segregate their locations by income, that means a poor school district has something like 3000 per household school costs, against income per HH around 30 to 40 thousand. The well-off district is likely to have a cost per HH of 5000 (less, probably, due to fewer kids per HH) against income of 80 to 100 thousand. Thus we have a 10 percent burden on the poor and a 6 percent or less burden on the well off.

If S&L governments provided a lot of luxuries, the burden might be more fair.

So why don't they use compensatory finance to provide money from the better-off districts to help keep down the burden on the poor districts? The basic answer is a Tocquevillean observation about American culture, that public school was a local common enterprise, and continued to adapt itself to that model long after we knew it was inequitable. People who prefer low taxes, in many cases because their children went to parochial schools anyway, chose communities with underfunded schools. Low income people were prevented from moving to high income areas, often due to race (my white family experienced no barriers moving to a town with excellent schools in California, despite our relatively low income, but minority families sometimes did). High income areas are more pleasant to teach in, meaning that rich districts get more for their money, and a well-educated family background of other students tends to make one's classroom experience better. So the poor are likely to get less advantage at a heavier cost, leading to people escaping those towns and districts if they can.

In most American cities there were areas with fine schools, great PTA's and a high tax burden despite moderate incomes. In every state I have lived in, those were most common where Jewish people had concentrated, by choice or otherwise. East Asian culture has some of the same effect today.

The thing is, concentration of poor schooling in poor populations breeds failure, not just inequality. The evidence is that if you send poor kids to schools with good teachers and well-prepared kids, the poor kids absorb some of the culture and do much better. The rich kids suffer very little loss of achievement if any at all.
There was a good article in the current Atlantic about the guy whose studies have lit the topic up:
https://www.theatlantic.com/magazine/ar ... am/592804/
and for a little more technical detail, another recent article
https://www.theatlantic.com/family/arch ... ty/592612/

I have known a few parents who were willing to let their kids absorb some added risk in order to have a better society, but to most parents the symbolism of that choice would be unbearable. Too bad. We could halve poverty in a generation if people would accept a burden-sharing arrangement for the common good. All the complaining about crime, drugs and other problems, but people are not willing to do something about it. The real irony is that a majority would be willing to pay money costs, but not risks to their children, but in fact that statistical risk from mixing in low-achieving colleagues can easily be compensated for by paying monetary costs for tutoring, etc., and time costs for enriching the children's experiences. But the symbolism is too big of a hurdle for them to get over.



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Litwitlou, Robert Tulip, vizitelly
Tue Jul 23, 2019 3:39 pm
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Post Re: Distribution of Wealth
Harry Marks wrote:
The thing is, concentration of poor schooling in poor populations breeds failure, not just inequality. The evidence is that if you send poor kids to schools with good teachers and well-prepared kids, the poor kids absorb some of the culture and do much better. The rich kids suffer very little loss of achievement if any at all.
There was a good article in the current Atlantic about the guy whose studies have lit the topic up:
https://www.theatlantic.com/magazine/ar ... am/592804/
and for a little more technical detail, another recent article
https://www.theatlantic.com/family/arch ... ity/592612



No doubt our President has read the work of Professor Raj Chetty because The Donald's agenda is based on improving educational and economic opportunities for all U.S. citizens regardless of race, religion, color, or national origin.


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Post Re: Distribution of Wealth
Maybe a dirigiste approach would be mare acceptable in USA, if the idea of Marxist economic theory terrifies so many people. Just a passing thought - how else is equality of opportunity to be achieved ?



Wed Jul 24, 2019 7:06 am
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Post Re: Distribution of Wealth
vizitelly wrote:
Maybe a dirigiste approach would be mare acceptable in USA, if the idea of Marxist economic theory terrifies so many people. Just a passing thought - how else is equality of opportunity to be achieved ?


May I ask to what, specifically, you refer when you write, "Marxist economic theory?"

More dirigiste? You don't think our government exercises enough control over our economy? The amount of control is not the problem. The skewing of that control is the problem.


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Last edited by Litwitlou on Wed Jul 24, 2019 7:28 am, edited 1 time in total.



Wed Jul 24, 2019 7:18 am
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Post Re: Distribution of Wealth
May I ask to what, specifically, you refer when you write, "Marxist economic theory?"

More dirigiste? You don't think our government exercises enough control over our economy? The amount of control is not the problem. The skewing of that control is the problem.[/quote]


Of course you may ask, although I am fairly certain you have encountered the Labour Theory Of Value.



Wed Jul 24, 2019 10:35 am
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Post Re: Distribution of Wealth
May I ask to what, specifically, you refer when you write, "Marxist economic theory?"

More dirigiste? You don't think our government exercises enough control over our economy? The amount of control is not the problem. The skewing of that control is the problem.[/quote]


Of course you may ask, although I am fairly certain you have encountered the Labour Theory Of Value.



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Post Re: Distribution of Wealth
The mainstay of Marxist theory is that the superstructure, meaning the laws, the public values, and the general lot of cultural institutions, will be shaped by the owners of the means of production as a class (which is determined by the mode of production, which sometimes changes). As a conclusion, it implies that society should own the means of production. Most of us see some reason in this, but generally find the incentive effect of private ownership to be more important.

The labor theory of value is a moral claim, not, as Marx thought, an economic force. It is, to be blunt, a piece of rhetoric.

Modern Democratic Socialism no longer argues that public ownership of the means of production is needed, but rather feels free to regulate the use of property by private owners, to prevent excessive abuse of others. Most people agree with that need to regulate in a given specific case, even if they dissent on the general proposition. We are now finding that the growing inequality in the world (but, within countries, not between them) is leading to more and more abuse and more and more manipulation on an ideological basis, to the point where civilization is threatened. The likely result is a backlash by people who did not look closely enough before, as happened with the Affordable Care Act.



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Post Re: Distribution of Wealth
It's certainly true that the Labour Theory Of Value is seen by mainstream economists as a dissident position, as they prefer to support the idea of supply and demand. Adam Smith was in general agreement with Marx's analysis in this area. It is a practical tool.



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Post Re: Distribution of Wealth
Mr. Marks, You stated that

"growing inequality in the world (but, within countries, not between them) is leading to more and more abuse and more and more manipulation on an ideological basis, to the point where civilization is threatened."

Can you provide some examples where you believe this is happening? Also, can you tell me what you mean by civilization (when do we have more of it and when is there less of it?)

Thank You



Sat Sep 28, 2019 9:14 am
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