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Posts Tagged ‘inequality

“We don’t pay taxes. Only the little people pay taxes.”*…

 

NYC_IRS_office_by_Matthew_Bisanz

 

Nine years ago, Republican lawmakers gutted the IRS’s budget, but didn’t relax its requirement to conduct random audits: in response, the IRS has shifted its focus from auditing rich people (who can afford fancy accountants to use dirty tricks to avoid paying taxes) to auditing poor people (who can’t afford professional help and might make minor mistakes filling in the highly technical and complex tax forms), until today, an IRS audit is just as likely to target low-income earner whose meager pay entitles them to a tax credit is as it is to target a filer from the top one percent of US earners.

Propublica pointed this out in an excellent tax-season report last April, and Senator Ron Wyden [D-OR] took up the issue with the IRS. Now, IRS Commissioner Charles Rettig has provided a report to Senator Wyden admitting that his agency targets poor people because they can’t afford to appeal the audits, making them cost-effective notches on the IRS’s bedpost.

Rettig’s report admits that auditing rich people would turn up more fraud and bring in more money for the US government, but says that he can’t afford to do so unless Congress restores the IRS’s funding. There’s bipartisan support for such a measure, but with Sen. Mitch McConnell blocking any Senate action, there may not be any more appropriations bills in 2019…

The sad story in full at “IRS admits it audits poor people because auditing rich people is too expensive.”

Pair with “The Rich Really Do Pay Lower Taxes Than You.”

* Leona Helmsley

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As we shake our heads, we might recall that it was on this date in 2011, a Saturday, that Weezer’s ex-bassist Mikey Welsh passed away.  Two weeks earlier, on September 26th, he had tweeted “Dreamt I died in Chicago next weekend (heart attack in my sleep). Need to write my will today,” followed by “Correction – the weekend after next”.  He died from a heart attack in his sleep.  In a hotel room.  In Chicago.

1234619-mikey-welsh-617-409 source

 

Written by LW

October 8, 2019 at 1:01 am

“Any human anywhere will blossom in a hundred unexpected talents and capacities simply by being given the opportunity to do so”*…

 

income

Top: A map consulted by President Lincoln in 1861, demarcating the counties with the most slaves.   Bottom: A detail from Raj Chetty’s Opportunity Atlas, in which areas with poor upward mobility are shown in red.

 

[Raj] Chetty turns 40 this month, and is widely considered to be one of the most influential social scientists of his generation. “The question with Raj,” says Harvard’s Edward Glaeser, one of the country’s leading urban economists, “is not if he will win a Nobel Prize, but when.”

The work that has brought Chetty such fame is an echo of his family’s history. He has pioneered an approach that uses newly available sources of government data to show how American families fare across generations, revealing striking patterns of upward mobility and stagnation. In one early study, he showed that children born in 1940 had a 90 percent chance of earning more than their parents, but for children born four decades later, that chance had fallen to 50 percent, a toss of a coin…

Now he wants to do more than change our understanding of America—he wants to change America itself. His new Harvard-based institute, called Opportunity Insights, is explicitly aimed at applying his findings in cities around the country and demonstrating that social scientists, despite a discouraging track record, are able to fix the problems they articulate in journals. His staff includes an eight-person policy team, which is building partnerships with Charlotte, Seattle, Detroit, Minneapolis, and other cities.

For a man who has done so much to document the country’s failings, Chetty is curiously optimistic. He has the confidence of a scientist: If a phenomenon like upward mobility can be measured with enough precision, then it can be understood; if it can be understood, then it can be manipulated. “The big-picture goal,” Chetty told me, “is to revive the American dream.”…

No one has done more to dispel the myth of American social mobility than Raj Chetty. But he has a plan to make equality of opportunity a reality: “The Economist Who Would Fix the American Dream.”

* Doris Lessing

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As we ponder possibility, we might send imperial birthday greetings to Alexander III of Macedon (or as he’s better known, Alexander the Great); he was born on this date in 356 BC.  After a childhood of tutelage by Aristotle, twenty-year-old Alexander succeeded his father, Philip II, as Basileus (King) of Macedon.  He devoted most of his reign to an unprecedented military campaign through Asia and northeast Africa, and by the age of thirty he had created one of the largest empires of the ancient world, stretching from Greece to northwestern India.  He was undefeated in battle and is widely considered one of history’s most successful military commanders; indeed, military academies still teach his tactics.

At his death he was Basileus of Macedon, Hegemon of the Hellenic League, Shahanshah of Persia, Pharaoh of Egypt, and Lord of Asia.  His legacy includes 20 cities that bear his name (maybe most notably, Alexandria, in Egypt), but more fundamentally, it includes the cultural diffusion and syncretism that his conquests engendered.  For example, Alexander’s settlement of Greek colonists and the resulting spread of Greek culture in the east resulted in a new Hellenistic civilization, aspects of which were still evident in the traditions of the Byzantine Empire in the mid-15th century AD and in the presence of Greek speakers in central and far eastern Anatolia until the 1920s.

220px-Istanbul_-_Museo_archeol._-_Alessandro_Magno_(firmata_Menas)_-_sec._III_a.C._-_da_Magnesia_-_Foto_G._Dall'Orto_28-5-2006_b-n source

 

Written by LW

July 20, 2019 at 1:01 am

“Everybody’s talkin’ about hard times / Like it just started yesterday”*…

 

Abrahamian-inequality_img

 

I welcome the Deaton report into inequality. I especially like its emphasis (pdf) upon the causes of inequality:

To understand whether inequality is a problem, we need to understand the sources of inequality, views of what is fair and the implications of inequality as well as the levels of inequality. Are present levels of inequalities due to well-deserved rewards or to unfair bargaining power, regulatory failure or political capture?

I fear, however, that there might be something missing here – the impact that inequality has upon economic performance…

Chris Dillow, a columnist at the Investors Chronicle, enumerates and explains eight ways in which that impact accrues: “How Inequality Makes Us Poorer.”

Image above, from “The Rise of the Inequality Industry,” also eminently worthy of a read.

* “Everybody’s talkin’ about hard times
Like it just started yesterday
People eye know they’ve been strugglin’
At least it seems that way
Fat cats on Wall Street
They got a bailout
While somebody else got to wait
Seven hundred billion but my old neighborhood
Ain’t nothing changed but the date”

– Prince, Ol’ Skool Company album, 2009

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As we realize that more often than not the greater good is good for us too, we might send carefully-charted birthday greetings to François Quesnay; he was born on this date in 1694.  An Enlightenment social philosopher, he was a founding father of Physiocracy, a set of proto-economic theories that held that the wealth of nations was derived solely from the value of “land agriculture” or “land development” and that agricultural products should be highly priced. He published the “Tableau économique” (Economic Table) in 1758, which provided the foundations of the ideas of the Physiocrats.  It was among the first works attempting to describe the workings of the economy in an analytical way, and thus can be seen as one of the first important contributions to modern economic thought.

225px-Quesnay_Portrait source

 

Written by LW

June 4, 2019 at 1:01 am

“The good we secure for ourselves is precarious and uncertain until it is secured for all of us and incorporated into our common life”*…

 

inequality Scales

… It might be that people have been studying inequality in all the wrong places. A few years ago, two scholars of comparative politics, Alfred Stepan, at Columbia, and the late Juan J. Linz—numbers men—tried to figure out why the United States has for so long had much greater income inequality than any other developed democracy. Because this disparity has been more or less constant, the question doesn’t lend itself very well to historical analysis. Nor is it easily subject to the distortions of nostalgia. But it does lend itself very well to comparative analysis.

Stepan and Linz identified twenty-three long-standing democracies with advanced economies. Then they counted the number of veto players in each of those twenty-three governments. (A veto player is a person or body that can block a policy decision. Stepan and Linz explain, “For example, in the United States, the Senate and the House of Representatives are veto players because without their consent, no bill can become a law.”) More than half of the twenty-three countries Stepan and Linz studied have only one veto player; most of these countries have unicameral parliaments. A few countries have two veto players; Switzerland and Australia have three. Only the United States has four. Then they made a chart, comparing Gini indices with veto-player numbers: the more veto players in a government, the greater the nation’s economic inequality. This is only a correlation, of course, and cross-country economic comparisons are fraught, but it’s interesting.

Then they observed something more. Their twenty-three democracies included eight federal governments with both upper and lower legislative bodies. Using the number of seats and the size of the population to calculate malapportionment, they assigned a “Gini Index of Inequality of Representation” to those eight upper houses, and found that the United States had the highest score: it has the most malapportioned and the least representative upper house. These scores, too, correlated with the countries’ Gini scores for income inequality: the less representative the upper body of a national legislature, the greater the gap between the rich and the poor.

The growth of inequality isn’t inevitable. But, insofar as Americans have been unable to adopt measures to reduce it, the numbers might seem to suggest that the problem doesn’t lie with how Americans treat one another’s kids, as lousy as that is. It lies with Congress…

The estimable Jill Lepore on accounting for inequality: “Richer and Poorer.

[image above: source]

* Jane Addams

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As we search for the balance, we might recall that it was on this date in 1931 that the National Hunger March gathered in Washington DC to demand jobs and relief.  Massing in front of Congress, the 1,670 marchers were met by an estimated 1500 police, and 1000 Marines, all armed.  They left without a hearing from President Hoover or any other official, but did have an impact: they set the stage for the 1932 march of the Bonus Army where 43,000 marchers – many veterans – descended on Washington DC to demand payment for the “service certificates” which had given to them in 1924 in lieu of cash.

hunger-march-in-pictures source

 

Written by LW

December 7, 2018 at 1:01 am

“As long as poverty, injustice and gross inequality persist in our world, none of us can truly rest”*…

 

Last year saw the biggest increase in billionaires in history, one more every two days. This huge increase could have ended global extreme poverty seven times over. 82% of all wealth created in the last year went to the top 1%, and nothing went to the bottom 50%.

Dangerous, poorly paid work for the many is supporting extreme wealth for the few. Women are in the worst work, and almost all the super-rich are men. Governments must create a more equal society by prioritizing ordinary workers and small-scale food producers instead of the rich and powerful…

Late last month, Oxfam released its annual Inequality Report.  As Felix Salmon observes, it’s powerful stuff:

At the end of this crazy bull market, it’s always worth remembering just how enormous the big winners’ gains have been.

Specifically, the world’s billionaires – the richest 2,000 people on the planet – saw their wealth increase by a staggering $762 billion in just one year. That’s an average of $381 million apiece. If those billionaires had simply been content with staying at their 2016 wealth, and had given their one-year gains to the world’s poorest people instead, then extreme poverty would have been eradicated. Hell, they could have eradicated extreme poverty, at least in theory, by giving up just one seventh of their annual gains.

Oxfam is absolutely right, then, to shine a light on the extreme inequality of the world in 2017. Wealth creation is all well and good, but giving new wealth primarily to the world’s billionaires is literally the worst possible way to distribute it. Oxfam’s longstanding proposal for a wealth tax on billionaires makes perfect sense. They don’t need the money; the world’s poorest do. What’s more, as the Oxfam report details, the top 1% too often make their money by exploiting the very poor. Nothing about this is just, especially when a good 35% of billionaire wealth was simply inherited…

You can download the report (pdf) here; it is well worth the read.

* Nelson Mandela

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As we rethink “fair’s fair,” we might recall that it was on this date in 1826 that University College London was founded.  Originally known as London University, it was inspired by the (then) radical ideas of Jeremy Bentham (one of the founders) and created as an alternative to the Anglican universities of Oxford and Cambridge.  UCL was the first secular university in the UK (admitting students regardless of their religion) and the first to admit women.  It is currently the third largest university in the United Kingdom by total enrollment (and largest by postgraduate enrollment), and is consistently ranked among the top universities in the world.

 source

 

Written by LW

February 11, 2018 at 1:01 am

“There are people in the world so hungry, that God cannot appear to them except in the form of bread”*…

 

We stand at the precipice if we don’t re-evaluate our understanding of poverty and inequality. The narrative in the neo-liberal west is that if you work hard, things work out. If things don’t work out, we have the tendency to blame the victim, leaving them without any choices. Brexit, Le Pen, and the defeat of Hillary Clinton are examples of the cracks that result from inequality and poverty, symptoms of my childhood experience writ large. The Piketty pitchforks are out, and the march to global disorder can only be arrested by adopting measures that begin to price in the stacked deck that I and anyone else born into deep poverty sees, and resents.

I believe we will see the Italian Five Star Movement submit a referendum to leave the EU this year, and that Marine Le Pen has better than even odds of winning the French election. The EU is in danger of buckling under a globalist defeat and may exist in name only two years from now.

These trends are being accelerated by the blind belief that the poor have failed to seize the opportunities that the market or globalization has created. This myth deserves to be taken off life support—and the emerging, empirical, and carefully observed science of poverty can help us do so if we pay it the attention it deserves…

A powerful plea for a fundamental re-understanding of the economic inequality that vexes our society, and of the myth of meritocracy that has helped sustain it: “Why Poverty Is Like a Disease.”

* Mahatma Gandhi

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As we agree with FDR that “the test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little,” we might recall that this date in 1907 was “Bloody Tuesday.”  The San Francisco streetcar strike, which had begun two days earlier, erupted into violence when armed strikebreakers fired into an angry crowd of strike supporters.  Soon armed strike sympathizers returned fire.  2 died; 20 were injured.

Armed strike breaker, left, shoots into the crowd on Bloody Tuesday, May 7, 1907. The original caption in The San Francisco Examiner said that “Photographer Coleman” took the picture “the moment before the man running beside him was fatally shot.”

source

 

Written by LW

May 7, 2017 at 1:01 am

“The rich get richer and the poor get poorer”*…

 

The richest families in Florence, Italy have had it good for a while—600 years to be precise.

That’s according to a recent study by two Italian economists, Guglielmo Barone and Sauro Mocetti, who after analyzing compared Florentine taxpayers way back in 1427 to those in 2011. Comparing the family wealth to those with the same surname today, they suggest the richest families in Florence 600 years ago remain the same now.

“The top earners among the current taxpayers were found to have already been at the top of the socioeconomic ladder six centuries ago,” Barone and Mocetti note on VoxEU. The study was able to exploit a unique data set—taxpayers data in 1427 was digitized and made available online—to show long-term trends of economic mobility…

More on the research and it’s import at “The richest families in Florence in 1427 are still the richest families in Florence.”  More on the underlying mechanisms of capital accumulation, the persistence of wealth and income, and their polarization here.

* widely-used aphorism, probably dating back to the Bible verse, “For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath” (Matthew 13:12, King James edition); it’s use was reinvigorated by the popular 1921 song “Ain’t We Got Fun.”

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As we dream the American dream, we might spare a rugged thought for Louis Dearborn L’Amour; he died on this date in 1988.  While L’Amour wrote mysteries, science fiction, historical fiction, and non-fiction, he is surely best remembered as the author of westerns (or as he preferred, “frontier stories”) like Hondo and Sackett.  At the time of his death he was one of the world’s most popular writers; dozens of his stories had been made into films, and 105 of his works were in print (89 novels, 14 short-story collections, and two full-length works of nonfiction); as of 2010, over 320 million copies of his work had been sold.

L’Amour was interred in the Forest Lawn Memorial Park Cemetery near Los Angeles.  His grave is marked in a way that acknowledges that death was able to contain him in a way that he successfully resisted throughout his life: while his body is underground, his site is fenced in.

 source

 

Written by LW

June 11, 2016 at 1:01 am

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