Why Is Their Income Inequality

How bad is income inequality in USA?

It’s way worse than what people think. Consider the differences between poor and middle class:Transportation: Poor takes the bus or walks. Middle class has an SUV and a car.Homes: An unfurnished apartment with less than ample heat and hot water; middle class will have a furnished apartment with a gym, heat, hot water, in-house laundry, and more.Food: Ever look at the nutrition label of food from the dollar store? It’s all sugar and no nutrition. Middle class spends more on Starbucks in a week than the poor spends on food.Work: Most deaths and severe injuries are on lower paying jobs with no insurance. When you get hurt, the company does everything in it’s power to block payment. Middle class gets sick days, benefits, and if there was an injury, workers compensation.Vacation: Poor can go years working two jobs and never take a more than 2 days off. They work on Christmas, miss New Years Eve, and every other holiday.Healthcare: Poor people en masse got demoted from full time to part time so that companies didn’t have to cover health care under ACA. ‘nuff said.I don’t care how much people talk about “hard work” and “being smart,” there is no good reason a person working two jobs shouldn’t be able to pay rent, eat food every day, and take a day off from work. It’s sick, sad, and gross, and whoever denies this reality is just ignorant or is a pathological liar.

Why is there so much income inequality in Hollywood?

For the most part people in Hollywood fall into two categoriesThey are in the entertainment industryThey want to be in the entertainment industryThose in the second category show up with a dream but often little else.  There is this rags to riches myth about Hollywood that is often perpetuated by Hollywood.  A young man/women hops of the bus from Indiana and is "discovered".  The reality is that most successful people in Hollywood, and in general worked very hard to get where they are and continue to do so.  Most people who make a living as actors are people who began studying their craft at a young age and continued in college and beyond.  When they showed up in Hollywood they had much more than a dream, they had talent, skill and experience and sometimes they make it.  For some reason people think that anyone can (included themselves) can act and that is not the case.  It is a learned skill.The dreamers with little skill and no resources cause a huge imbalance of income as do the huge successes in Hollywood.As a side note - I assume when you say Hollywood you are not strictly talking about the city of Hollywood.  Not too many of the very wealthy/famous people live in the city.  There are too many beautiful beaches and canyons in the area to put up with living in Hollywood if you can afford it.

Why is there so much income inequality in the Philippines?

For the same reasons there is so much in the USA and at around the same levels. The World Factbook However it is not nearly as high as many of its fast growing Asian neighbors, e.g. China, Malaysia, and Hong Kong, and even slightly lower than Singapore. In fact, it looks like for East/Southeast Asian countries, higher inequality correlates with higher growth, though this does not hold true world wide. (A lot of Africa has high inequality and low growth.)

What are the reasons for income inequality?

The dominant perspective on wage inequality suggests it comes down to differences in talent and determination in individuals. What if, instead, the salary spectrum is dependent not so much on individuals, but on the companies they work for?In a recent study, Jason Furman, chairman of the President's Council of Economic Advisers, and I found that capital returns are diverging sharply. The share of companies that reap annual returns of more than 25 percent or even 50 percent is growing. It's plausible that some of those substantial returns are shared with the companies' employees. And that may well be playing an important role in growing wage inequality. Among the top nonfinancial U.S. companies that are publicly traded, capital returns have diverged over the past three decades. Excluding goodwill, for example, the 90th percentile of the return on invested capital has risen roughly fivefold, from about 20 percent in the mid-1980s to an eye-popping 100 percent in 2014. In other words, the top 10 percent of publicly traded nonfinancial firms earned 20 percent or more on their invested capital in the 1980s, and 100 percent or more in 2014.Two features of these high-return companies stand out: They are disproportionately in health care and information technology -- from 2010 to 2014, two-thirds of firms with returns above 45 percent were in these sectors. And they are persistent. Among companies that, in 2003, had a return on invested capital in excess of 25 percent, only 15 percent had a return below that threshold in 2013. The vast majority remained in the 25-percent-plus bucket.All this could help explain why Americans' earnings are becoming more unequal:  some companies could generate consistently supernormal returns. Their employees would share some of those returns by earning higher wages. That could also explain why most of the rise in wage inequality has occurred because of bigger gaps in the average pay at different firms, rather than a rise in gaps within each firm.Are these rocketship companies just better at what they do than their competition, thereby allowing for such longstanding high returns? Or do they enjoy some unwarranted market power?

Why is there so much focus on income inequality and so little on the wealth gap?

Those I hear talking about income inequality tend to be using to argue for higher income taxes.  I suspect that they came up with the solution before the problem.As to an inheritance tax, that is a tougher sell. A proposal would be met with (true) stories of various families forced to sell their small businesses to a larger competitor at fire sale prices because that was the way they afford to cut a check for $500,000 by April 15th. And now you want to double that? Get ready to be asked why you hate small businesses, family farms, the American Dream and apple pie.As a CPA, I welcome the opportunity to make a few more bucks on tax planning, but as an American tax payer I think it is a foolish waste. I'll also point out that the super rich you are probably most concerned with are also far more likely to buy tax planning services.There is also strong argument that the deceased already paid plenty of taxes earning the money...In the cases you're thinking of, I wouldn't worry so much. If the heir receives a huge stack of cash he/she will either invest it in something that creates economic activity in order to pay dividends/interest or the heir will go on a crazy shopping spree putting the money in the hands of people who work for a living. Worst case he/she will pull a Scrooge McDuck and fill their basement with cash, it will still reduce inflation which is regressive tax that hits the financially unsophisticated the hardest.