The Distribution of Wealth in America

I guess this sort of thinking started this past fall, corresponding with the presidential election.  I go to a University that is highly conservative which is a good thing because I have conservative views as well.  But this political election, to be honest, really upset me because of the misunderstanding of economics.

I still am rather new in my economic understanding, so forgive me if this sounds really simplified.  Actually, screw that.  It's my blog and I'll do whatever the hell I want.

Okay, so my issue with the past election has been the notion that President Obama practices a redistribution of wealth system, and that Mr. Romney and other conservatives do not.  This is not true. Both parties redistribute wealth among the country, but manage to do so in different ways.

Liberals attempt to achieve this by a progressive tax, which takes a greater % of wealth from rich and gives it back to the poor through numerous social programs, such as welfare.  Conservatives do the same thing, but they do this by lowering taxes for the rich in an attempt to create savings which can be reinvested back into their respective companies.  The hope is that the company will be more profitable, and employ more workers.  My issue with this system is that people have a marginal propensity to save, meaning, that given $10, people will save $5 and spend $5.  This means that the money saved by this wealthy individual will not all be reinvested back into the company, because a portion of it is saved or spent by the owner.

This is, in fact, a redistribution of wealth. The issue with both is that the liberal plan funds those who are not working, and the conservative plan is inefficient while posing little incentive to invest money

My proposal is one that is simple, but ultimately effective.  I believe that there should be a flat tax, and that the government should not impose a higher tax on individuals just because they are wealthy.  Whether you make $500,000, or $40,000 your tax rate should be the same.  A separate tax rate is like saying if you get a speeding ticket, the amount of money you pay should be different according to your economic well being.  Simply put, that's a whole lot of bull shit.

Additionally, I think those on welfare should have to work in some fashion to earn their welfare paycheck.  There has to be some sort of government infrastructure we can send people to work on that others do not want to do.  Possibly something with agriculture to keep food prices down, and keep efficiency levels high.  That way, it is a self sustaining system which can create profit and induce desire for work.