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Does anyone think that the economy can be fixed by incentivizing redistribution of wealth?

It seems to me that one of the biggest problems in our economy is the vast income gap, leaving some with all, and most with nothing. In reality, there is enough abundance for everyone, but the wealth stagnates when it it held prisoner by the super rich. These people could never possibly spend all their money, so they keep it in banks/money markets/stocks. Banks loan the money out to entrepreneurs and potential home owners and the like. When the banks do this, they charge interest to the people, becoming self-made middle-men. Removing this step and forcing the wealthy to redistribute their wealth how they see fit is a fair solution to the uneven distribution of resources. Those who control a lot of the money would be encouraged to spend their overabundant liquid capital. If your taxes show you having over "x amount" of "money in the bank" so to speak, you will have a choice between re-investing your money or paying an increased tax rate.They can choose to reduce their liquid assets by:
- investing in new businesses and infrastructure (creating jobs)
- buying cars, ipads, and pontoons (also stimulating the economy)
- purchasing government bonds (helping alleviate some of the more pressing debt issues)
- granting vouchers for charity donations, allowing you to keep a larger percentage of otherwise taxable money

If they refuse to invest or spend enough of their money, they will be charged a tax penalty.

I think it's a good idea, and I would love some feedback from someone who has a really good understanding of economics. If you think it's a good idea, share it! No one else will fix these problems for us!

  • Feb 7 2012: A progressive tax system doesn't work. In the USA approximately 50% of the population don't pay taxes, meaning they get a refund on whatever they paid into the system. We talk about incentivising but a progressive tax does the opposite. The harder you work the more that is taken from you. I propose that a standard tax of say...15% be collected on all money earned. OR set an amount of money each person could miniumly make to submit to provide for the common defense. say 4,000 each. This would hopefully create an incentive to work harder because you get to keep more of your hard earn money while also raising the standard for lower income families. Those who work hard are rewarded, those who don't remain at their socioeconomic station.
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    Jan 11 2012: The mechanisms that caused the money to be distributed as it is, if left unaltered would restore the current distribution shortly after redistribution.
    • Jan 31 2012: you are quite right,what needs to be done is a much more progressive tax system.the reason for this is the the elit,s using money as a weapon to control people against the public interest to control government the USA is a prine example of this problem that needs to be addressed worldwide.
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        Jan 31 2012: Hi Michael. I think the word "Free" in Free Enterprise means unhampered, or unconfined. What could be more hampering, or confining than a forced redistribution of wealth? Such surgery might be successful but the patient will not survive. I suspect every free enterprise economy has a sizeable difference between lowest income/net worth and highest income/net worth brackets. It is an organic function of the system.
  • Jan 11 2012: I think the simplest way to help the redistribution wealth is to just increase the tax bands to cover larger sums of money at a higher taxation rate and have savings, stocks and tied up collateral taken into account.

    An 86% tax rate for those with over 100 Billion dollars of value, savings and income would surely generate a far bigger income and benefit to society than, lets say, letting a minimum wage employee keep an extra $25 a week.
    • Jan 30 2012: It may not do much to benefit the guy who is getting taxed at 86% though.
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    Jan 31 2012: there are times of progress and there are times of dog eats dog. in times of progress, people concentrate on production and solutions. the game is hugely positive sum, and everyone gains. other times progress is stalled, and people can only split up what is there. the cake is fixed in size or even shrinking. one man's gain is another man's loss. in such times, fierce fight over wealth breaks out, and people start to talk about "redistribution" which is a metaphor for armed robbery.

    the right question to ask is not how to steal more, and from who. but how to switch from redistribution economy to progressing economy. more precisely, what prevents the economy from growing.
  • Jan 30 2012: So in your system having money in the bank would be taxed? Not just the income on it, but the actual deposit? Why on earth would I want to keep my money in a US bank?
  • Jan 11 2012: Nope.

    I think it will be about developing more local economies.
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    Jan 11 2012: hold on Ill call the IRS and see what they have to say..