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This is a long TED video, but it is well worth your time. Richard Wilkinson shows solid data in support of the Occupy Wall Street movement across the globe. The 99% protesters believe the corporations and the top 1% earners are taking an unfair slice of the pie. One solution is to raise the tax on those high income earner to redistribute the wealth. That’s fine with me, but I think the 47% of people who are not paying any federal tax should pay up as well.
Most of my blogger friends believe the opposite. Financial Samurai’s post To The 99% Protestors: You Do Not Represent All Of Us sums this up pretty well. Most if not all of the financial bloggers believe in hard work and are actively striving to reach the 1% income bracket – about $380,000/year. It sounds like they are very annoyed with the 99% movement and wish they would get their butt in gear and find a job.
Which camp is right? The 99%, the 1%, or the 53% (people who are annoyed at the 99% protesters.) Wilkinson’s research shows that countries with high economic inequality have more social problems. As I looked more into this, I found other researches with similar conclusion. The people of countries with high economic inequality are also less healthy overall than countries with more equality.
Statistically, the richer you are the more healthy you will be. This makes sense.
What is surprising is that rich people in high economic inequality countries are less healthy than their counter part in the more equal society! Why is that? I don’t know, but perhaps the healthcare system is stretched thin to take care of poor people who couldn’t pay their bills. When poor people can’t afford long term health care, the cost goes up because short term and emergency care are more much more expensive. See my post on Reducing Healthcare Cost by Providing Better Care. IMO, this cause the overall quality of healthcare to go down for everyone. Does this sound familiar?
Another surprising finding is that we see similar graph when Wilkinson collected data state by state in the US. We see similar pattern emerging even in the same country. This is shocking to me because we all have the same federal government and similar lifestyle. How can there be such a different? I can improve my healthcare and deal with less crazy people by just driving across the state line? I guess I made the right choice when I moved from CA to OR years ago.
Wilkinson glossed over causality, but I don’t think it matters all that much. Progressive people think income disparity cause social problems and Conservatives think the reverse. To me if I live in Louisiana, I would want to move to a better spot. Who care which way the causality goes?
So what do you think? Assuming this data is accurate, wouldn’t it be better for the country as a whole to raise the tax on the top 1% or top 20%? Sure it is better to be rich, but being rich in a more economic equal society is even better yet.
ps. Communism is not the answer because –
- Communist countries are poor and we are only talking about rich countries.
- The people in charge are much more powerful and wealthy than the regular people. Economic inequity in China is on the same scale as the US according to Wiki.
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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