[extropy-chat] Tax Burden Gap

Damien Broderick 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. >

Damien Broderick

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