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How Paul Graham Gets It Wrong in “Economic Inequality”

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Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#81

Post by arkaeologic »

danhak wrote: post #16

> Further, there are an abundance of studies that show that reducing economic inequality (even through redistributive means) actually boosts overall prosperity. To me, this sentence and the ones that follow are by far the most salient point. How many Zuckerbergs, Gates, Brins, Pages and Bezos are we missing out on due to the fact that huge swaths of our country do not have the ability to fully explore and develop the…

It seems to be that people are reacting to a potential threat to an axiom of their's. That is: "Income inequality is bad because A,B,C, and should be prevented at all costs." I'm not saying no part of this is founded in reasoning and evidence, but you are right that the author does not actually respond to PG's sentiment. Rather, his reaction is automatic.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#83

Post by zo1 »

zappo2938 wrote: post #25
danhak wrote: post #16

> Further, there are an abundance of studies that show that reducing economic inequality (even through redistributive means) actually boosts overall prosperity. To me, this sentence and the ones that follow are by far the most salient point. How many Zuckerbergs, Gates, Brins, Pages and Bezos are we missing out on due to the fact that huge swaths of our country do not have the ability to fully explore and develop the…

I can't think of anything more democratic than using money to vote on how to best allocate resources. The reward for doing well is to get more money to decide how that should then be allocated. This system works great until it crosses a threshold when the most talented consolidate the ability to decide how to best allocate resources into a small group of people. A small group of billionaires deciding how to allocate…

Progressive taxation is a perfectly acceptable solution. Somewhere, there was some notion that said: "Already-rich people probably make money faster than the less well-off", therefore: "We should tax them more to even things out a little and have an upward push for the less well-off. And on the upside is we have a bit more funding for the state/infrastructure/services.".

The problem now comes that society in general are not happy with the outcomes of the above. It's now less about how to provide for a stable, secure society and infrastructure, and more about how will we "fix everything". I believe the very existence of a state means people will want it to fix things, because it's there.

And now, someone needs to pay for all the "fixing".

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#84

Post by danhak »

zo1 wrote: post #83
zappo2938 wrote: post #25

Earlier quoted context omitted.

I can't think of anything more democratic than using money to vote on how to best allocate resources. The reward for doing well is to get more money to decide how that should then be allocated. This system works great until it crosses a threshold when the most talented consolidate the ability to decide how to best allocate resources into a small group of people. A small group of billionaires deciding how to allocate…

Progressive taxation is a perfectly acceptable solution. Somewhere, there was some notion that said: "Already-rich people probably make money faster than the less well-off", therefore: "We should tax them more to even things out a little and have an upward push for the less well-off. And on the upside is we have a bit more funding for the state/infrastructure/services.". The problem now comes that society in general…

But taxes on inheritance and investment are totally regressive (and have become even more regressive), which undermines the benefits of a progressive system for earned income.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#85

Post by Frondo »

zappo2938 wrote: post #25
danhak wrote: post #16

> Further, there are an abundance of studies that show that reducing economic inequality (even through redistributive means) actually boosts overall prosperity. To me, this sentence and the ones that follow are by far the most salient point. How many Zuckerbergs, Gates, Brins, Pages and Bezos are we missing out on due to the fact that huge swaths of our country do not have the ability to fully explore and develop the…

I can't think of anything more democratic than using money to vote on how to best allocate resources. The reward for doing well is to get more money to decide how that should then be allocated. This system works great until it crosses a threshold when the most talented consolidate the ability to decide how to best allocate resources into a small group of people. A small group of billionaires deciding how to allocate…

One thing that is more democratic than using money to "vote" is using actual voting to vote, whether on policy directly or on politicians who will determine policy.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#86

Post by knughit »

appleflaxen wrote: post #82

Why not a death tax? Give a flat amount to the family (capped at say 5 million), then a flat 100% tax after that No living person pays more taxes Children can get an incredible windfall, but not eye-popping. Tax revenue goes through the roof.

[estate tax]

Bing it.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#87

Post by zo1 »

danhak wrote: post #84
zo1 wrote: post #83

Earlier quoted context omitted.

Progressive taxation is a perfectly acceptable solution. Somewhere, there was some notion that said: "Already-rich people probably make money faster than the less well-off", therefore: "We should tax them more to even things out a little and have an upward push for the less well-off. And on the upside is we have a bit more funding for the state/infrastructure/services.". The problem now comes that society in general…

But taxes on inheritance and investment are totally regressive (and have become even more regressive), which undermines the benefits of a progressive system for earned income.

There are arguably much more "regressive" things out there, that are completely avoidable.

Inheritance tax, on the other hand, usually has a "lower-bound" that prevents the very poor from being affected.

Taxes on investment? You mean, capital gains? Or something like dividends?

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#88

Post by Eeko »

sradu wrote: post #30

Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. The US is fundamentally different than Nordic countries, where socialism appears to be working: * The Nordic countries are tiny compared to the US. * They are highly educated. * Their society is homogenous. It seems like everybody is assuming that th…

What happened in the Nordics is that for the most part of the 1900's, there was a shared border with a huge imperialist and expansionist superpower, trying to convince the world that their economic and social models were superior. It often did it with some very dirty and violent tricks and supported its sympathizers around the world. Especially in neighboring countries.

In order to keep the people from revolting and gaining permanent global competitive advantage by murdering the factory owners, lenders and their families and stealing their property disregarding any repayment plans - the moderate socialists (who saw that the socialist system would be built organically without violence) and the right wing owner & trader classes made an alliance to fringe the hard-core communists.

Bargains were made and benefits established as all parties knew that every satisfied social democrat was much better than a soviet-devout communist. In Finland, there was a very bloody civil war right in the beginning of independence (where the communists lost), two big gunfights in the WW2 and decades of soviet pressure to turn communist.

The social programs and safety nets were established to ensure the survival of capitalism and private property. The problem being solved with reducing economic inequality was not "poverty" like PG claims, but threat of violent revolutions by people who felt unfairness.

The Soviet Union is gone now and thus the left wing these days has much less bargaining power. These are interesting times.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#89

Post by thanatropism »

danhak wrote: post #16

> Further, there are an abundance of studies that show that reducing economic inequality (even through redistributive means) actually boosts overall prosperity. To me, this sentence and the ones that follow are by far the most salient point. How many Zuckerbergs, Gates, Brins, Pages and Bezos are we missing out on due to the fact that huge swaths of our country do not have the ability to fully explore and develop the…

> How many Zuckerbergs, Gates, Brins, Pages and Bezos are we missing out on due to the fact that huge swaths of our country do not have the ability to fully explore and develop their talents?

But this has nothing to do with inequality. It has to do with "too many people below economic level X". If this seems related to inequality it's because you've already bought into the pie fallacy.

Re: How Paul Graham Gets It Wrong in “Economic Inequality”

#90

Post by puredemo »

appleflaxen wrote: post #82

Why not a death tax? Give a flat amount to the family (capped at say 5 million), then a flat 100% tax after that No living person pays more taxes Children can get an incredible windfall, but not eye-popping. Tax revenue goes through the roof.

First, it would be trivial to reroute inheritance funds through trusts or protected business assets, so very few wealthy families would fall victim to this sort of tax in reality. Governments have been trying to steal from the rich for a very long time, and the rich are fairly skilled at protective countermeasures.

Beyond that, your policy comes off as just the most base form of theft. Generational wealth is important, it's core to our survival instincts to look after our offspring when we die -- beyond just their basic needs, we want them to thrive. We want our grandchildren to thrive as well.

Also, generally speaking, I trust the children and grandchildren to spend money in more interesting / authentic ways than our government, who has, for example, the yearly defense budget we carry. And the yearly prison budget we maintain.

What if a child whose rich parents died would have started the largest cancer research center in the US with his billion dollars, but instead that money is seized by your "tax plan" and simply goes toward the defense industry coffers? Is that a net gain? Taking from the rich and giving to Halliburton and Blackwater?

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