Wednesday, July 20, 2011
Why there is always the poor in rich countries is because officials are stealing peoples money? I think so?
That's really not it. What it truly causes that are two things: the rich people of the country usually get that way because they love money, so naturally they want to keep as much of it as possible. But to do that they have to support the power brokers so they will pass laws that protect their wealth. Here's the first reason there are poor in rich countries: the rich send the jobs overseas (which the politicians allow), so it increases competition for jobs in the home country. This in effect lowers wages. This phenomena has occurred in the US since the 1980's and continues today - growth in wages is stagnant when adjusted for inflation.The second reason involves taxes. Laws such as tax cuts for the super rich - like the current ones Bush installed in America. Bush enacted the tax cuts but chose to keep on spending and doubled the national debt, which the country is paying for now. Budgets are getting slashed and people are losing jobs and competition again increases. Additionally, many of the benefits of greater taxation serve as freebies or reduced costs to the general population (transportation, health care, parks services) so they have more money to spend elsewhere. Plus it also can create good paying jobs for these different services. The problem today is that the highest income tax rate in America is currently 35% (but the rich only paid 17% due to loopholes in 2009) while in 1950 it was 90%. America's heyday was built on this. There are more poor in the US than ever before. The phenomena above has eroded the middle class in the US to the point today that 5% of the people control 90% of the wealth. The other 10% is for the remaining 95% to fight over.
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