plucky tree

how the government worsens income inequality

Let’s say you have some friends that are starting a small business. They set themselves up as a Corporation or LLC and are looking for investors. You decide, sure, why not, I’ve got a few thousand dollars saved, I’ll invest.

Well, turns out you probably can’t!

Unless you have a liquid net worth over $1 million or earned more than $200,000 in the last couple years. To buy any shares in a private company, you need to be an “accredited investor”:

SEC: Accredited Investors

If you find some already rich people, they can invest, that’s fine. So, this is one of the many ways that government actually worsens income inequality. When people are clamoring for the government to “do something” to fix this inequality, perhaps they should step back and look at all the ways they have caused it in the first place.