Feb
5
Blog Post #3
February 5, 2015 | Leave a Comment
Income inequality was something I couldn’t understand until about high school. I knew what it was and what it meant but I don’t think I ever understood my own place in the system. When I was a naive 14 year old, I’d always felt lucky to be able to frolic in my dance classes or to take the summer trip to Hong Kong because I understood that my parents had worked hard at their jobs to be able to afford this. Being in Brooklyn my entire life and being surrounded by families just like mine, made it hard to grasp that it wasn’t like this all over. Commuting to high school in Tribeca completely flipped me. At one side, I had a classmate that scarfed down all school meals because he couldn’t afford to eat outside of it. On another side, I had a classmate waking up five minutes before class only to stroll in on time because his parents got him an apartment right next to school, on the 17th floor, overlooking the Hudson River. So where did I drop in all of this? Smack middle. But it feels like it’s dropping with every conscious year.
Likewise, Thomas Piketty’s groundbreaking book strikes me in a lot of different ways. Sometimes, I wholeheartedly agree with him. For example, I do think that family wealth plays a factor in inequality. Money-wise, it’s simple and inheritance based. But besides that, wealthier families have more privileges. For me, I had the privilege of taking SAT prep classes to prepare of college. For others, they had the privilege of having legacy in the college of which their parents attended. Of course, I do believe that our economic elite is not entirely composed of those who got there because of their family. I want to believe that those who possessed talent and slaved away got there too. But in reality, those meritocratic people must make up a small percentage.
Other ways in which Piketty rallies me to his cause are the six graphs in which he displays his data. They are great graphs I can easily understand but discouraging once I do. The terrible thing is realizing how skewed income and wealth is in the most developed countries. In the US in particular, how screwed are we that only 1% of our population holds 30% of our wealth and the trend shows no sign of stopping? If a Great Recession doesn’t set back inequality at all, what will? Another depression? And if so, would the 1% even suffer more than the rest of the 99%?
Piketty’s solution is to set a global tax to redistribute wealth. He also suggests a “80% tax rate on incomes above $500,000 or so”. This is where I have to disagree. Economists are supposed to be logical right? A global tax? Even for an optimist like me, it seems like complete wishful thinking. First of all, I don’t think anybody has the right to impose things onto the entire world. Sure, it may be for the greater good but there are consequences when this sets a precedent. The suggested tax rates are also too much. Why will I work hard if I know everything I earn will hardly even get back to me? Perhaps President Bartlet of the TV show West Wing was right in his reply when asked why low-income voters would vote against a tax hike on the rich: “It doesn’t matter if most voters don’t benefit, they all believe that someday they will. That’s the problem with the American Dream, it makes everyone concerned for the day they’re gonna be rich.”
Piketty has done a great job in fueling the inequality fire but his proposed solutions are far-fetched. President Obama has announced that he wants to increase taxes on the rich but with an opposing Congress, it’s going to be a long, uphill battle that may never be won. With a domestic tax already severely debated, how much push would there need to be for a global one?
Stella Kong
