Showing posts with label Wealth Inequality. Show all posts
Showing posts with label Wealth Inequality. Show all posts

Friday, October 31, 2014

Gates wants consumption AND estate taxes

October 31, 2014 Bill Gates , Chris Matthews 0 Comments
Bill Gates' Solution To Income Inequality

Chris Matthews, Oct. 15, 2014, Fortune

Gates shares Piketty’s goal of spreading wealth, yet he doesn’t want to discourage the uber wealthy (like Gates) who are taking risks, investing in value-creating businesses, and helping the world through philanthropy. Gates’ solution? Shift the American tax code from one that taxes labor to one that taxes consumption. Now, this sounds like standard, right-wing economic theory. Consumption taxes are usually favored by the wealthy and by conservative economists because they tend to be regressive in nature. Since everyone—rich and poor—have to consume some amount of goods and services, and because the proportion of income spent is much higher for the poor than the rich, consumption taxes like state and local sales tax burden the poor more than the rich.

But this doesn’t necessarily have to be the case. Economists like Cornell University’s Robert Frank have long advocated for progressive consumption taxes that could do much to solve what they perceive as the ills of growing income inequality.

Read more: www.fortune.com

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Thursday, June 26, 2014

Study: Wealth Inequality Inflamed By Slow Recovery --Opposite of what Obama promised

June 26, 2014 Breitbart.com , Middle Class 0 Comments
By William Bigelow, Jun. 25, 2014, Breitbart.com

University of Michigan researchers have released a study stating that the disparity between the wealthiest Americans and the rest of the country has grown because of the Great Recession and the slow recovery. According to the study, the top 5% of Americans averaged 24 times as much wealth as the wealth of the median American family in 2013; in 2007 they averaged 16.5 times as much.

The report indicates that the divide between the very wealthy and everyone else is derived from the ability of the 5% to invest in the stock market with their spare cash. The stock market dropped by nearly 50% during the recession but has returned to its level before the recession hit. However, about 10 percent of American households own 80 percent of stocks on the market.

Middle-class Americans, meanwhile, often look to their home equity for their wealth, but home prices have not regained their former status since the recession. In the first three months of 2014, 18.8% of homeowners who had a mortgage owed more on their mortgages than the worth of their homes, according to Zillow. Zillow adds that another 18.1% own so little equity that the equity couldn’t cover closing costs and a down payment on a new home.

Only 64.8% of Americans own homes, as opposed to 69.2% in 2004.

The study asserted that all households lost money during the recession and no group has fully regained what it lost. Still, the top 5% lost 16% of their net worth since 2007, while the median households lost a whopping 43%.

Read the full story:  www.breitbart.com

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Saturday, May 24, 2014

Financial Times' Giles Finds Economist's 'Wealth Inequality' Work Riddled With 'Data Problems'—And Wrong --Oh, that

May 24, 2014 Chris Giles , Financial Times 0 Comments
Chris Giles, Economics Editor
 Financial Times
By Tom Blumner, May 23, 2014, Newsbusters.org

 French economist Thomas Piketty has become a darling of the left for allegedly "proving" that, as paraphrased by Chris Giles at the Financial Times, "wealth inequalities are heading back up to levels last seen before the first world war." The Media Research Center's Julia Seymour has described Piketty as a "'rock star' of the far-left," an accurate assessment given praises heaped upon his book and especially his public policy prescriptions by the likes of Alternet and Vox's especially gullible Matthew Yglesias. Seymour also notes that Piketty's work has received a great deal of favorable notice in the establishment press, and that he has met "with the Treasury Secretary" and "(President) Obama’s Council of Economic Advisers."

 Of course these "oligarch groupies," as Jeffrey Lord describes them, love him. Piketty favors an 80 percent tax on incomes above $500,000 and a progressive global tax on real wealth (i.e., after subtracting debt). The problem is that FT's Giles, having done a deep dive into the economist's data and spreadsheets, has found serious problems in the professor's work which nullify his conclusions.

 Giles has documented his findings in a summary article and a thoroughly detailed blog post. He has found "a series of errors that skew his (Piketty's) findings" consisting of "mistakes and unexplained entries in his spreadsheets."

 Here are several paragraphs from Giles's summary published early Friday afternoon (Eastern Time US):
... The data underpinning Professor Piketty’s 577-page tome, which has dominated best-seller lists in recent weeks, contain a series of errors that skew his findings. The FT found mistakes and unexplained entries in his spreadsheets, similar to those which last year undermined the work on public debt and growth of Carmen Reinhart and Kenneth Rogoff.
The central theme of Prof Piketty’s work is that wealth inequalities are heading back up to levels last seen before the first world war. The investigation undercuts this claim, indicating there is little evidence in Prof Piketty’s original sources to bear out the thesis that an increasing share of total wealth is held by the richest few. 
... In his spreadsheets ... there are transcription errors from the original sources and incorrect formulas. It also appears that some of the data are cherry-picked or constructed without an original source. 
... For example, once the FT cleaned up and simplified the data, the European numbers do not show any tendency towards rising wealth inequality after 1970. An independent specialist in measuring inequality shared the FT’s concerns. 
Contacted by the FT, Prof Piketty said he had used “a very diverse and heterogeneous set of data sources ... [on which] one needs to make a number of adjustments to the raw data sources. 
“I have no doubt that my historical data series can be improved and will be improved in the future ... but I would be very surprised if any of the substantive conclusion about the long-run evolution of wealth distributions was much affected by these improvements,” he said.

 At the very least, Piketty has admitted that he didn't mind making "a number of adjustments to the raw data sources" without telling anyone that he had made them.

 But it gets worse — much worse — once one looks at Giles's detailed blog post:

Read the full story:  www.newsbusters.org
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