Welfare

Re Death Reveals Harsh Side of a 'Model' in Japan By NORIMITSU ONISHI in today's NY Times:

A quote from the article: "As a widening income gap has pushed up welfare rolls in recent years, struggling cities like Kitakyushu have been under intense pressure to tighten eligibility."

War is not the only example of man's inhumanity to man. The way modern, industrialized nations like the U.S. and Japan handle income inequality is another.

As the article depicts, some indigent persons have starved to death in Japan, because their welfare programs are, in a word, stingy. But at least the income tax system in Japan is very progressive.

Whereas in the U.S., our welfare programs are generous, but our income tax system is not progressive. (Just witness the low 15% tax rate on billionaire private equity and hedge fund managers.)

The fallacy which undelies the ideologies in both the U.S. and Japan is that the rich are entitled to their wealth and the poor deserve their poverty.

The missing idea in all this is that technology is the real underpinning of all modern wealth creation, and the fruits of technology should be shared because without government-sponsored education and research, technology would not be as advanced as it is today.

Just one small example proves this point. How much lower would aggregate world GDP be were it not for the American government's role in creating the internet?

Therefore, a large portion of the fruits of technology belong to the governments which paid for the research and development of the technologies, and which subsidized (directly and/or indirectly) the educations of many of today's billionaires.

That being said, modern governments should get a return on their investments by taxing the "winners" at a high rate.

One of the outcomes of technology is producing more goods and services with less labor. Therefore, governments (which helped create modern technology, directly and/or indirectly) have an obligation to help the "losers" in today's advanced economies.