Rising Inequality – Why Don’t We Care?

There’s an interesting “Room for Debate” series in the NY Times titled “Rising Wealth Inequality – Should we Care?“.   The series was sparked by an intriguing survey by Michael Norton and Dan Ariely that found that Americans generally estimate that wealth distribution is far more equal than it actually is and, if given a choice, they would select an even more equitable distribution as being the ideal scenario.  The graph below shows the results of the survey.

Income Distribution 

Of course there will always be a uneven distribution of wealth, and that in and of itself is not a bad thing.  Systems such as communism and socialism have proven to be an ineffective way of raising standards of living, whereas capitalism has done a pretty good job on the whole.  But are the wealthiest 1% or 10% of our nation (or of any nation) actually contributing to their society in a manner proportionate with their wealth?  Are they wealthy because they’re reaping the rewards of their hard work, or is it a matter of inheritance, loopholes, and offshore accounts?

It seems that the economic theory known as “trickle-down economics” – in which you give the wealthy more of their money through a lowering of taxes in the belief that they will spend more, thus fueling economic growth – has largely been proven to be bogus.  The wealthy spend a proportionately smaller share of their income than do people further down the socioeconomic ladder.  The rest goes into investments.

What most confuses me is why so many people who are middle class or lower, are against raising taxes on the ultra-wealthy.  They seem to hold a belief that they may one day be in that top few percent and have to pay that “too high” a marginal tax rate, when in reality their only realistic chance of becoming a millionaire, let alone a billionaire, is to win the lottery.  Heck, even Warren Buffet, one of the nation’s wealthiest men, says he needs to be paying a higher tax rate.

The debate series in the NY Times lays out the different perspectives, but I’m curious to hear yours:

Why don’t people seem to care about rising inequality?  Is the rising inequality something we should be concerned about?  Is that lack of caring about it also something we should be concerned about?


Pity the Poor Wine Drinkers in Thailand

Tawn and I are wine drinkers.  I wouldn’t call ourselves “aficionados” and there’s a lot we don’t know about wine, but we enjoy a nice bottle and have a small wine cellar at home and like to explore different varietals and vintners.  Sadly, though, the tropical paradise of Thailand is no paradise for wine drinkers’ wallets. 


Wine, extremely little of which is produced locally, faces a hefty import duty on top of which the government places an even heftier excise tax, since wine is, in their judgement, a luxury good.  Beer and cheap Mekong whisky, however, apparently are not.

Recently I was commenting longingly on a post by Gary in which he dined at a “wine-centric” place in Glendale called Palate Food + Wine.  They had these wonderful wines at very reasonable prices – $9 here, $17 there – and that was after restaurant markup.  In my comment, I complained about our 300% duties here in Thailand.  That got me curious: what, exactly, are the duties, taxes and tariffs on wines here in Thailand? 

A little research and I found a USDA Foreign Agricultural Service Global Agricultural Information Network Report about wine in Thailand.  This is the US Department of Agriculture’s effort to educate US based producers on export opportunities.  Here is what I learned about the duty, tariff and tax burden on imported wines:

Wine Tariffs

That’s a 390% effective duty, tariff and tax burden!  Outrageous!  If there is any good news out of all of this, Free Trade Agreements signed with Australia and New Zealand are moving their tariffs (currently 24% and 18%, respectively) to zero over the next half-dozen years.  But that is only the tariffs, not the excise tax, etc.

Is it any wonder that when I’m back in the US (not to mention visiting Australia), I try to have wine with every meal?