The Great Divergence

[kandrathe]

Hello all

I have been following a series of essays written for Slate Magazine, exploring the possible causes of the increasing disparity in income distribution in the U.S.A.

It has been fascinating reading and I feel motivated to share. I admit, I have not had the time to explore the bibliography (i.e. all the provided links) in the essays. No matter.

Here you are: THE GREAT DIVERGENCE : WHAT'S CAUSING AMERICA'S GROWING INCOME INEQUALITY?

I've always been troubled by the focus on income.

I think it pits the less successful workers against the more successful workers. Where I would like people to focus is on net worth. If incomes rose 10% under Carter, who cares, because under Carter the prices of goods went up by 20 or 30%, and so the net effect was that we are worse off. In fact, I think we discussed that briefly once here before. I believe that in general for the bottom 2/3rds of Americans, their CPI adjusted purchasing power has declined over the past 20 years. Wages are not keeping up with inflation.

Per Capita Net Worth is more interesting to me, and it shows the illusion of wealth created by continuous bubble building and popping economies.

Now, if only we might convince the IRS to tax us at a flat rate according to net worth, then those at the top, like Warren Buffet, might actually feel the sting of having to contribute rather than grouse about it. For most of the people in the US who remain in the negative territory, they may benefit from paying less. The fairest method I believe would be high consumption based taxes, made progressive by tax rebates commensurate with net worth. How to implement this would be less difficult in the age of electronic debit and credit cards.