in the U.S.strictly does there have to be poverty people who can't support themselves 4 there to be rich peeps

Question

what would happen if you capped the amount someone could earn a year in order to help people who can't seem to get off the ground say 5 million was the cap

it's ok for them to crap a brick as long as its a gold one

and thats one of my points would there be poverty if they did not
and say there were standards stuff that you could not have more than 6 kids unless they were all at once you had to do certain things with your money like save for retirement and provide for your family school food and the basics

less money driven crime would be the reward and incentive

Answer 1

It has been tried, it doesn't work. It is very deceptive why it doesn't work however.

First, let's clarify your thinking on poverty. If you look at poverty in 1810 or in 2006, it has a very different meaning. A poor person in Somalia or America 200 years ago is in a different position than a poor person in America today. The difference is the amount of goods and services that can be produced for the same amount of labor time and capital invested. Knowledge has multiplied national income 10 fold in two hundred years.

Second, the demand curve really forces some people to be relatively poor.

Third, and this is the important issue, the multiplication ten fold could not have happened under your regime. At best, you would trap poor people in today's standard of living.

Now why it wouldn't work. Capping income eliminates the incentive to work past a certain point or to invest money beyond a certain point. There is no reason to do so and so people do not do so. Since capital is absolutely necessary for production capital must be available. Further, very little capital is in the form of money. A farmer's tractor is capital. If a farmer cannot earn more from two tractors than one, then a farmer will own one. This means there are fewer factory workers to produce a second tractor since no one wants it. Which means more unemployment, which means more poverty.

The other problem is on the other end. If you cannot work and survive to at least a minimum standard then why work? It disconnects reward from work. That is always a bad idea. Look at the history of the Soviet Union to see how badly that idea went.

Your idea has noble intent, but it amounts to theft from the rich or the hardest best workers. Why would anyone want to discourage the hardest best workers from producing as much for the economy as they could?

Finally, 5 million dollars is a pretty low cap. It sounds high to you because to you five million dollars is quite large, but to Donald Trump it is chump change. He could blow that and not miss it. However under the current rules half of his money already goes to the governments of the US whether state, local or federal. More if you consider his properties' property tax.

The sad part of capitalist society is that there must be people whose talents are not demanded who will never be able to make it off the ground. However, be honest with yourself, would you be willing to dedicated thousands of dollars of your income for things you do not want? Would you support ballet in favor of movies because more people could be talented at it than movies? What about watch makers or blacksmiths? Some people hold talents that have no economic value. Some people lack basic life skills. Now society does pay people to learn basic life skills and invests a lot in it. But some people are trapped, but it cannot be the job of government to remove them from the trap if that trap is possessing skills that no one wants.

In the end, you would see people who could earn higher incomes living in other countries and taking the jobs they would have created with them in order to earn the higher amounts. I am sure Canada would welcome them with open arms.

Answer 2

Both the American people and the politicians are becoming more and more sensitive to the gap between people who make too much and those who make too little. The question, however, is how to help those at the bottom, and at the same help them help themselves. Simply giving people money (robbing Peter to pay Paul) is not the answer. There are all sorts of theories of income tax but it is generally acknowledged that those who make make more should pay more tax. The tax revenues could be used to train the poor for jobs which pay a decent wage or salary, moving them toward the skilled or semi-skilled ranks of society. One chronic problem with some of the rich is that they use all sorts of loop-holes to pay as little tax as possible. The United States does assist the poor through food-stamps and Medicaid (health programs for those who cannot afford private insurance) but it does not have the Welfare State of Europe because many Americans are committed to the principle of economic self-help. John Kenneth Galbraith liked to quote the motto that we should comfort the afflicted and afflict the comfortable. How to achieve this while still preserving the economic dynamism of America which is fuelled by incentives and rewards is the difficult question: to help the poor while not interfering too much with those who create wealth and reap the reward of doing so.

Answer 3

I like your idea. If that were put into practice, you'd see people "about to crap a brick" out of panic. There are so many people who are used to living above 5 million, they couldn't take it if they had to live below that.

Answer 4

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Answer 5

You are describing socialism. It does not work. Been proven throughout history.