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by guelo 3198 days ago
And America is showing that if you don't tax wealth enough the inequality causes instability.
3 comments

Well Venezuela has an income inequality of almost 0. I can’t look up the Gini coefficient but I can guarantee you that they are all equal save for the government cronies.

Income inequality is always parroted as the measurement for a healthy economy, but as my previous point suggests it’s not the end be all.

The point is that there is a balance somewhere between too much free market and too much inequality.
Surely, I agree with you but in the same manner you have freak athletes at what point do you tell Lebron James, Ronaldo, etc that they are “much too skilled and talented” compared to others?

America’s poor are rich in comparison to other countries’ poor. It’s a perception problem, even for the citizens of UAE (forgetting the second class workers for a minute). There’s going to be the random citizen who only owns 3 Ferraris and a small penthouse in London, while some others have 20 cars and two mansions in London and NYC.

There will always be those with less.

Well Venezuela has an income inequality of almost 0.

Not according to the World Bank or the CIA. At least not 5-6 years ago.

The World Bank had Venezuela's Gini coefficient at 44.8% in 2014 vs %40.8 in the US. The CIA has the number at 39.0% (2011) vs 47% in the US.

Not disagreeing, just curious. How much taxation is appropriate for the wealthy? When explicitly does the label of wealthy apply?
Who knows. I'm sure there are many economics papers addressing the question. But it's somewhere before you get to the historic inequality levels of today https://fred.stlouisfed.org/series/GINIALLRF
To be fair, inequality levels were comparable in 1929, which falls outsize of the scope of that chart. Still historic by US standards, but not unprecedented.
Rather than a single cut-off you just scale this gradually so there is no single wealthy/not wealthy divide but an increasing expectation to carry social responsibility as your wealth increase.
You’ve outlined our tax system as it exists today.
Just take it all and divide it up equally. Then when enough people start to run out, take it all and divide it again.
I don't see evidence of historically high levels of instability in America.