Time for Some Science

Now that the “We are the 99%” movements are still heating up this cold weather season I thought it would be a good time to apply some science, not politics, to the problem.

Feedback effects, also known as the “snowball effect”, play an important role in all aspects of human endeavor. As a snow ball rolls down a hill and starts to gather snow it becomes larger, heavier and faster so it picks up more snow becoming larger, heavier and faster and so on. That is a positive feedback.  The negative feedback happens when the snowball becomes too large and then breaks into smaller and smaller pieces.

The popular game of Monopoly (who hasn’t played it?) is a good example of economic feedback.  The more money someone makes in Monopoly the more they can make and---the ending is always the same.  One person ends up owning everything.  The rest are bummed.

Real life economics works the same way.  The more money someone has the more they can make and so on.  There is a strong positive feedback that is at work.  This is nobody’s fault; it is just what happens as gradually the wealth of a society becomes concentrated in the hands of fewer and fewer people.

This is normally not a good thing for everyone (rich and poor included) because this limits the opportunity for innovation and keeps talented people from reaching their full potential.  After all, the wealthy have no monopoly on brains-----and are way fewer in number.  Most of the brains that are going to help all of us are in your homes and those of your neighbors.

The income inequality, that has become greater in our society, is the result of our policy of lowering taxes on the higher incomes and greatly cutting down the inheritance tax. The lowering of the inheritance tax only benefitted the very wealthy has almost all of us are under the $5,000,000 limit for taxation.

If a balanced and satisfied society is important then the larger incomes need to be taxed at a higher rate than lower incomes.  This isn’t politics, this is mathematics.  Remember, Monopoly is played with a “flat tax” on everyone regardless of what they make.