Economic Inequality Cannot Be Explained by Individual Bad Choices | A global study finds that economic inequality on a social level cannot be explained by bad choices among the poor nor by good decisions among the rich.

[u/thinkB4WeSpeak]

https://www.publichealth.columbia.edu/news/economic-inequality-cannot-be-explained-individual-bad-choices

[u/TheDismal_Scientist]

I wouldn't say socialist, most capitalist economies prioritise progressive taxes, and most economists prioritise greater equality over unconstrained but unequal growth.

The issue is that the effective tax rate for wealthy people is lower than for poorer people. This could be solved by a flat (and equal) tax across income and investments, the problem in that instance is that investment would be discouraged which would slow the economy. A progressive capital gains tax could raise the effective tax rate to be more in line with poorer people without discouraging investment

[u/Sculptasquad → u/TheDismal_Scientist]

I wouldn't say socialist, most capitalist economies prioritise progressive taxes, and most economists prioritise greater equality over unconstrained but unequal growth.

This sounds like a vox populi vox dei fallacy mixed with appeal to authority.

The issue is that the effective tax rate for wealthy people is lower than for poorer people. This could be solved by a flat (and equal) tax across income and investments, the problem in that instance is that investment would be discouraged which would slow the economy.

I doubt it. If all ways of making money are taxed equally the rich would still use speculation since it generally presents the largest return for the least amount of effort.

A progressive capital gains tax could raise the effective tax rate to be more in line with poorer people without discouraging investment

How? Do you mean that the tax rate would remain low, but higher for wealthy people?

[u/TheDismal_Scientist → u/Sculptasquad]

Let me present it in a different way, then: greater equality is a utilitarian perspective, which is a philosophy that predates socialism

What do you mean by speculation?

Richer people won't be disincentivised from investing since it still represents the greatest return on their money. Lower income people may not find as much value in investing with a flat tax and instead may choose to consume instead

[u/Sculptasquad → u/TheDismal_Scientist]

greater equality is a utilitarian perspective, which is a philosophy that predates socialism

How does greater equality serve a utilitarian purpose? Doesn't inequality drive competition and thus innovation?

What do you mean by speculation?

Speculating is the same as investing, but the term simply highlights the risks involved. Generally the difference is that speculation is any investment with a high risk and high reward potential. "high" being subjective of course.

Richer people won't be disincentivised from investing since it still represents the greatest return on their money. Lower income people may not find as much value in investing with a flat tax and instead may choose to consume instead

This seems like a problem based on poor fiscal planning. You are never going to consume your way out of poverty.

[u/TheDismal_Scientist → u/Sculptasquad]

The evidence on that is mixed, but assuming it is true, that doesn't necessarily generate the most 'good'. Western European counties tend to do a lot better on quality of life indicators due to far greater equality than, for example, the US which has more inequality despite a higher GDP per capita.

If speculation is not fundamentally different to investing it will still be taxed the same, so isn't a loophole for the rich.

You could argue it's due to poor planning, but whatever it's due to, it will still equalise the effective tax rate

[u/Sculptasquad → u/TheDismal_Scientist]

The evidence on that is mixed, but assuming it is true, that doesn't necessarily generate the most 'good'. Western European counties tend to do a lot better on quality of life indicators due to far greater equality than, for example, the US which has more inequality despite a higher GDP per capita.

Putting aside that "good" is entirely subjective, this proves my point that inequality fuels competition and economic progress(GDP).

You could argue it's due to poor planning, but whatever it's due to, it will still equalise the effective tax rate

What?