[extropy-chat] Tax Burden Gap
thespike at satx.rr.com
Tue Aug 17 21:09:49 UTC 2004
At 01:36 PM 8/17/2004 -0700, Chris wrote:
>Damien forwarded some statistics:
>>The top 20 percent owns over 80 percent of all wealth. In 1998, it owned
>>83 percent of all wealth.
>But notice that these are statistics for wealth, not income. In the US
>(and I have to assume until corrected, in Australia as well) most taxes
>are based on income, not wealth.
You need to read the full interview I url'd; e.g.:
< MM: To what extent is inequality addressed through tax policy?
Wolff: One reason we have such high levels of inequality, compared to other
advanced industrial countries, is because of our tax and, I would add, our
social expenditure system. We have much lower taxes than almost every
Western European country. And we have a less progressive tax system than
almost every Western European country. As a result, the rich in this
country manage to retain a much higher share of their income than they do
in other countries, and this enables them to accumulate a much higher
amount of wealth than the rich in other countries.
Certainly our tax system has helped to stimulate the rise of inequality in
this country. >
<MM: To what extent is the wealth inequality trend simply reflective of the
rising level of income inequality?
Wolff: Part of it reflects underlying increases in income inequality, but
the other significant factor is what has happened to the ratio between
stock prices and housing prices. The major asset of the middle class is
their home. The major assets of the rich are stocks and small business
equity. If stock prices increase more quickly than housing prices, then the
share of wealth owned by the richest households goes up. This turns out to
be almost as important as underlying changes in income inequality. For the
last 25 or 30 years, despite the bear market we've had over the last two
years, stock prices have gone up quite a bit faster than housing prices. >
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