Why Do You Ignore Pareto's Unbreakable 20/80 Law and Income Taxes?
Sociologist/economist Vilfredo Pareto in the late 19th century discovered his curious, unexplained, and apparently universal law regarding income distribution: 20% of the population gets 80% of the wealth, in every society, no matter what the legal order.
Anti-capitalist critics can should "unfair" till the cows come home, but it will not change reality. Reforms will only change the members of the upper 20% -- and hardly any of the upper 1%.
This is true everywhere. The reformers never provide statistics on income distribution pre- and post-reform. They never bother to ask. If they did, they would discover the truth: the reforms produced no relative change.
The top 25% of all income taxpayers in the United States pay over 80% of the revenue generated by the income tax. The bottom half pay under 5%. This doesn't change, year after year. It will not change.
Yet this is not just an American phenomenon. It exists in every nation ever investigated by economic statisticians. The only factor that can marginally ameliorate the effects of this law on the poor. This is why every nation needs tax cuts and the abolition of, or drastic budget-cutting in, regulatory agencies.
The Pareto phenomenon affects many institutions, not just business and taxation. No one knows why. Richard Koch has written extensively on this phenomenon. He has a website devoted to it.
Jim Wallis has been oblivious to all this. He will read this article soon enough, but I predict that he will not respond to it by providing statistical evidence to the contrary regarding the actual tax burden. He will cry out against tax cuts for the rich.
If he ever told his readers the truth -- that no tax policy, no matter how heavily the rich are taxed has yet to change this distribution -- he would not sound like much of a prophet. He would also have to recommend a specific tax reform that would equalize incomes. No such policy has ever been discovered.
So, he carefully avoids the entire issue. He continues to attack all attempts to reduce taxes on the rich. This is how he makes his living and his reputation.
Someday, there will be an honest and well-informed welfare State promoter who will report on Pareto's law. He will then have two choices: tell his readers that tax laws have never overcome the effects of Pareto's law, or else show that tax law changes did overcome it in a specific national case. That will be the first known case.