What you want, redistribution, will hurt the poor the most. Trickle AROUND from the most successful always works...always has, always will.
Stated again, having Buffet keep his money will be more productive than sending it to the government.
What does Michael Jordan tell us about income inequality in the United
States? The U.S. has greater income inequality than nearly all other developed
nations, and the former basketball star earned far more in most years than the
typical American earns in a lifetime. So is our system unfair and stacked
against the middle class? First, some historical perspective.
"From the time of Pericles until the end of the 18th century in London—2,300
years," notes Harvard Prof. Lawrence Summers, "standards of living on Earth
increased perhaps 100%." In the U.S. since 1790, by contrast, real per capita
gross domestic product has increased nearly 4,000%. Quality of life, in other
words, increased 40 times more in 220 years of American history than it had
globally over two millennia. In 2012, a typical American in the bottom fifth of
the income distribution has a far higher quality of life—and life
expectancy—than the average member of the top 1% in 1790.
Critics today often point to the 1950s as the last years before American
society became so divided between haves and have-nots. At the end of that
decade, America's "Gini coefficient"—the most common measure of income
inequality, running from 0 (least unequal) to 1 (most unequal)—was 0.37. Today
it is 0.45.
But in 1959, more than 20% of families fell below the poverty line. In 2010
that figure was just over 13%. Real per capita GDP today is 270% higher than it
was in 1959. A family in the bottom fifth of the income distribution today makes
the same amount in real terms as a family earning the median income in 1950. So
inequality might have increased, but so too—dramatically—has quality of
Even over the last two decades, while real income has essentially stagnated
for the bottom fifth of earners, basic conveniences have become far more
affordable. In 1992, only 20% of American families below the poverty line had a
dishwasher—50% had air conditioning and 60% owned a microwave. When the Census
Bureau last surveyed these figures in 2005, those figures were 37%, 79% and 91%,
respectively. Critics who minimize the importance of these conveniences likely
have never had to do without them.
And that brings us to Michael Jordan, who starred for the Chicago Bulls from
1984 to 1998. In 1986, the Bulls' median player salary was $300,000. The team's
lowest-paid player made $135,000, and its highest-paid player made $806,000. The
team's Gini coefficient was 0.36. But Jordan's superstardom increased the team's
popularity and revenues, and by 1998 salaries looked different. The median
income was $2.3 million, the lowest was $500,000, and the highest (Jordan's) was
$33 million. The Gini coefficient had nearly doubled, to 0.67.
Jordan's salary of $33 million consumed over half the payroll, but everyone
was better off. The median player in 1998 made more than seven times what the
median player made in 1986, while the income of the lowest-paid player in 1998
quadrupled that of his 1986 peer.
Detractors would suggest that this situation is anomalous to sports, that
many of today's wealthy inherited their money or acquired it without adding
commensurate value to society. But consider another basketball player, Rashard
Lewis of the Washington Wizards.
Lewis was the second-highest paid player in the National Basketball
Association in 2012, making $22.1 million—even though he appeared in fewer than
half of his team's games and performed poorly when he did. Is it fair that Lewis
was compensated so handsomely? More pertinently, if his team could repossess a
portion of his salary and redistribute it more "fairly" to deserving players
following the season, would it benefit the franchise?
Perhaps it would in the short term, as the team could reward players and
temporarily strengthen morale. But top players would be disincentivized to play
for the team in the future, knowing that such repossession could also happen to
them. And without an objective measure of overall player performance, the team
could one day decide that even a high-performing player was overcompensated and
therefore should see some of his proceeds redistributed to his teammates. The
team would quickly become uncompetitive.
Certainly there are reasons for concern if lower-income Americans aren't able
to save or acquire sufficient capital to pursue innovative ideas, or to see
their children attend decent schools. They will suffer, and the country will
lose out on significant intellectual capital and growth opportunities. But this
should not be confused with inequality.
Equality is not a good in itself and shouldn't be analyzed in a vacuum. If we
remember that, perhaps a century from now low-income Americans will pity the
living standards of today's 1%.