The new version of poverty

#201
#201
BigPapaVol said:
You failed to tell me anything coutercyclical - because it's garbage. Progressive taxation is certainly not. If you're trying to make some senseless argument about efficiency of funds in the hands of certain groups, that's patently stupid.

It's not about my education. It's about the fact tgat I know you have ni idea what you're talking about. You simply like to regurgitate crap you've read on some blog or in a textbook.
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Countercyclical policy isn't garbage. Progressive taxes help dampen fluctuations. What are you talking about?

If it's not about your education, why would you intentionally tell me multiple times about it? You continue to sling diatribes and propagate the same garbage.
 
#202
#202
bam15 said:
I don't believe my argument would hamper upper class growth, I just don't see it, if it did at all, the middle class would make up for it.
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You lose a lot through using taxes for redistribution of wealth. Deadweight loss guarantees that such an act will result in a net loss to society.
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#203
#203
I'm not sure if it's been posted yet but I found a somewhat neutral article about this here

In summary it appears that what they mean by "relative poverty" is that they're adjusting it for geographical regions, so New York has a higher threshold due to a higher cost of living, etc. Also they're creating a clause that increases this threshold due to the rise in the cost of living, just like how the minimum wage rises to account for cost of living.
 
#204
#204
bam15 said:
Countercyclical policy isn't garbage. Progressive taxes help dampen fluctuations. What are you talking about?

If it's not about your education, why would you intentionally tell me multiple times about it? You continue to sling diatribes and propagate the same garbage.
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I think what he's saying BPV is that progressive taxes are "countercyclical"; they counter the business cycle by smoothing it out so the valleys aren't so deep and the booms aren't so big. The booms not being big is what you're talking about. What he's claiming is that while this is true (progressive taxes slow economic growth), they don't eliminate it, they just stabilize it so you don't have deep recessions followed by big economic booms.
 
#205
#205
Snakes on a Wii said:
I think what he's saying BPV is that progressive taxes are "countercyclical"; they counter the business cycle by smoothing it out so the valleys aren't so deep and the booms aren't so big. The booms not being big is what you're talking about. What he's claiming is that while this is true (progressive taxes slow economic growth), they don't eliminate it, they just stabilize it so you don't have deep recessions followed by big economic booms.
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But it's ludicrous. It's a frictional expense to the economy that is incidentally coutercyclical. Flat taxes are coutercyclical as well.

The point is that the wealthy drive our economy, which his point reinforces, but he has a philosophical bent that precludes recognition.

The problem with the silliness of that argument is that it assumes help on the downside for the wealthy so it frees up capital to allow them to lead out. Well, income is taxable and not wealth. To the extent that high earners pay less, they made less and there is no capital freed. Only less taken in. It's just a silly dream to make someone feel better about vertical inequality in taxation.
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#206
#206
bam15 said:
I don't believe my argument would hamper upper class growth, I just don't see it, if it did at all, the middle class would make up for it.
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How in the heck does it help the middle class? You haven't answered that one yet.

So far, your plan might close the income gap by making the rich less rich but increasing marginal rates doesn't generate growth in the middle class.
 
#207
#207
volinbham said:
How in the heck does it help the middle class? You haven't answered that one yet.

So far, your plan might close the income gap by making the rich less rich but increasing marginal rates doesn't generate growth in the middle class.
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his theory seems to be that by making the rich closer in weath to the middle class the middle class is better off. i guess it's the old if your neighbor isn't rich you don't feel poor argument. pretty silly.
 
#208
#208
Adjusting the poverty line by region makes sense to me, I don't have a problem with that - as long as it is done in a way that maintains consistent purchasing power of the poverty line in the region of interest. However, adjusting the poverty line directly with cost of living increases entirely misses the point that purchasing power can remain constant despite cost of living increases.
 
#209
#209
Snakes on a Wii said:
I'm not sure if it's been posted yet but I found a somewhat neutral article about this here

In summary it appears that what they mean by "relative poverty" is that they're adjusting it for geographical regions, so New York has a higher threshold due to a higher cost of living, etc. Also they're creating a clause that increases this threshold due to the rise in the cost of living, just like how the minimum wage rises to account for cost of living.
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That isn't what that article says. In summary, it appears that what the change is going to be is adding new expenses in determining the calculation of poverty, such as "the higher cost of healthcare, childcare, housing, and utilities, 'plus a little more,' a 'new category for other expenses that provides a little extra padding,' says Ms. Wight." In addition, it will do what you portrayed as the only change: "adjust for geographic location." I don't disagree with any of the changes listed above except for the "other expenses" category and possibly childcare (I don't view that as an expense "necessary for survival"). I certainly believe that cost of living needs to be adjusted based on geographic location.
 
#210
#210
What matters is what is done as a result of new definitions.

Agree with geographic distinctions but does anyone believe that in areas with low costs of living they will reduce benefits to those formerly in "poverty" (based on a national definition) who are no longer in that category because they live in an inexpensive region?

We have definitional reality and we have political reality. Adjusting geographically makes sense but will most likely add folks without removing folks. Further, the "other expenses" category will include all sorts of things that people feel everyone is "entitled" to.

We already have subsidized cellular service. How is that a necessity? Until 10-15 years ago most people did not have cell phones. Be prepared for cable TV, Internet access to be considered a necessity (especially the latter).
 
#211
#211
volinbham said:
What matters is what is done as a result of new definitions.

Agree with geographic distinctions but does anyone believe that in areas with low costs of living they will reduce benefits to those formerly in "poverty" (based on a national definition) who are no longer in that category because they live in an inexpensive region?

We have definitional reality and we have political reality. Adjusting geographically makes sense but will most likely add folks without removing folks. Further, the "other expenses" category will include all sorts of things that people feel everyone is "entitled" to.

We already have subsidized cellular service. How is that a necessity? Until 10-15 years ago most people did not have cell phones. Be prepared for cable TV, Internet access to be considered a necessity (especially the latter).
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What's funny is that the administration has said this definition will not be used to modify amounts of federal assistance. If not for federal assistance, then what would be the point of the new definition? :unsure:
 
#215
#215
volinbham said:
We already have subsidized cellular service. How is that a necessity? Until 10-15 years ago most people did not have cell phones. Be prepared for cable TV, Internet access to be considered a necessity (especially the latter).
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The FCC is working on the internet thing as we speak.
 
#217
#217
volinbham said:
Yep - soon broadband will be subsidized (if not already in the works) and to use it, computers will be too.

Everytime I see the subsidized cell phone commercials I flip.
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Thereby destroying an industry.
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#219
#219
Just wanted to post this link that casts some doubt on all the "inequality" and "redistribution" rhetoric: Measuring the Impact of Health Insurance on Levels and Trends in Inequality

The article points out that because health insurance benefits are not taken into account when determining wage distribution in most cases, the studies overstate inequality significantly. According to the study, between 1995 and 2008, the lowest 10 percentile of workers (aged 25-61) wages only rose 1.93%. But when total compensation is included, the increase was 12.28%. During the same period, the highest 10 percentile of workers (aged 25-61) wages rose 10.48%. But when total compensation is included, the increase was 11.67%.
 
#220
#220
Would I be wrong to read this as the cost of premiums increased so much from 1995 to 2008 that it caused a significant increase in the total compensation packages for those not making that much money, but it made only a dent in the compensation packages of those making a lot of money. Or, that the top 10% is making enough that a similar amount of money equates to only a 1% increase in their pay, but a 10% increase in the lowest earning bracket. Does that mean the average of the bottom 10% is making 10 times less than the average of the highest 10%?

All of that is probably completely wrong. I am very limited on time right now, but I had a few free minutes while scarfing down some dinner and saw this post...a few thoughts ran through my head....and then I vomited them onto the screen...
 
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#221
#221
TennTradition said:
Would I be wrong to read this as the cost of premiums increased so much from 1995 to 2008 that it caused a significant increase in the total compensation packages for those not making that much money, but it made only a dent in the compensation packages of those making a lot of money. Or, that the top 10% is making enough that a similar amount of money equates to only a 1% increase in their pay, but a 10% increase in the lowest earning bracket. Does that mean the average of the bottom 10% is making 10 times less than the average of the highest 10%?

All of that is probably completely wrong. I am very limited on time right now, but I had a few free minutes while scarfing down some dinner and saw this post...a few thoughts ran through my head....and then I vomited them onto the screen...
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I think your first assertion is the one the authors were trying to get at. Because employer provided health care is really just a proxy for compensation, wages have been offset to the extent of the increase in health care costs. Thus, the disparity in income we are seeing has as much to do with health insurance as a component of compensation as it does an increasing gap between the wealthy and poor.

PS. I forgot that SSRN often charges for articles. If I had known this was one of them, I wouldn't have posted. Doesn't do a lot of good if no one can read it.
 
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