An MMT site bringing you dogma-free economics without the pleadings of self interest
First,The title of her article is incorrect, as the title says income, while the body of the article deals with the wealth distribution. There is a big difference between wealth and income.I redid her calculations, and came up with a very different way of presenting her suggestions.So here goes:Let us cap Wealth at the average of what the top 5% minus the top 1% haveThat average is 27.3/4 = 6.825 %So the top 5% now get 6.825 x 5 = 34.125The difference between what the top 5% and the new top 5% = 34.6 + 27.3 - 34.125 = 61.9 - 34.125 = 27.775No we distribute the 27.775 equally to everybody = 0.27775%So New Distribution shows the increase for each group, and their comparson to the new bottom 40% wealth level.Bottom 40% share = 0.2+ 40 x 0.2775 = 11.31 average = 0.283 Increase 56 x or 1 x bot 40%Middle 20% share = 4 + 20 x 0.2775 = 9.56 average = 0.478 Increase 2.39 x or 1.68 x b4060-80% share = 10.9 + 20 x 0.2775 = 16.44 average = 0.822 Increase 1.5 x or 2.9 x b40Next 10% share = 12% + 10 x 0.2775 = 14.78 average = 1.478 Increase 1.23 x or 5.2 x b40Next 5% share = 11.2 + 5 x 0.2775 = 12.59 average = 2.518 Increase 1.13 x 8.9 or x b40Next 4% share = 27.3 + 4 x 0.2775 = 28.41 average = 7.10 Increase 1.04 x or 25x b40Top 1% share = 6.825 + 1 x 0.2775 = 7.1 average = 7.10 Decrease 0.20 x or 25x b40A similar analysis can done for the income levels - which I intend to do.
If I look at the data provided by the IRS on Tax Returns and do a similar arithmetic by re-instituting the 90% top tax rate on incomes above $250K while keeping the other tax brackets the same, and distributing that tax revenue (from 250K and above) as a tax credit equally across the board -- income disparity between the CEO of a Fortune 500 corp and its lowest paid worker from 600 to 1 today back to 26:1 as it was in the 1960's
"as the title says income, while the body of the article deals with the wealth"Right the first is a flow and the second is a stock.... We can see how normal brain function is disrupted once the topic becomes one based on "money".... here a woman who probably is pretty decent at math is caught up in not recognizing the difference between a stock and a flow....rsp,
I think even stock is a misnomer - it is a running total not a static "quantity" of things.Again these are merely semantic constructs devised to describe abstract processes. It isn't that cut-and-dried in my view, hence the reason there are always disagreements ovr these kinds of arguments.Whether or not she is talking about flows or stocks she is focused on making a broader point without writing a technical paper on it.Those of us that look at things in the abstract sense first should be able to read between the lines and see the broader argument.Those that are semantic-based thinkers (majority) may have trouble grasping the finer points and making those distinctions may confuse them.Or maybe I'm just navel-gazing…
Stocks vs flowsHence the logic of the income tax. If you want to reduce the amount of water in a leaky bucket, you start by reducing the flow from the tap!
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