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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”

#151

Post by krainboltgreene »

totalrobe wrote: post #55
trav4225 wrote: post #31

"I’m going to be charitable here and assume that PG is not arguing against those that want to, literally, end economic inequality completely [...] I’ve never met anyone arguing for this." Interesting. Perhaps I'm misinterpreting their rhetoric, but my impression has been that many people are arguing for precisely this.

I've also never seen anyone arguing for this. Many argue for specific issues and policies like estate taxes, single payer health, cost of housing and education, but I've never met anyone that thinks everyone should have the same income.

Hey, it's me. The person arguing for this.

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

#152

Post by ryandrake »

mamon wrote: post #130
danhak wrote: post #84

Earlier quoted context omitted.

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.

Inherited wealth shouldn't be taxed at all: the testator has already payed the taxes when he was earning all those money he left. Taxing it again is just plain robbery.

If you're worried about "double taxation" I've got some bad news for you: That money was taxed many, many, many times before. When it was earned through labor? Taxed. When it was spent in a store? Taxed. When the store owner made an investment in a company? Taxed. When that company issued a dividend? Taxed. "Taxing it again" is the normal state of things.

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

#153

Post by js8 »

pandaman wrote: post #150
js8 wrote: post #149

Earlier quoted context omitted.

I seriously can't comment on motivation of Russian bourgeois; still, I would like to explain it, even though I think it's futile. Here's an analogy. Let's say you have a weapon and I don't. And I honestly don't believe either of us should have weapons, because we can live in peace. So I attempt to convince you to give up your weapon, but you think it's an attack, because you cannot read my mind, and you're paranoid t…

I don't see how you are arguing against anything what I've said. Here is a recap of this thread how I see it: OP: I don't see why smart, capable people want to give their money to the government. me (paraphrasing): Theory 1: they don't believe they are going to give the money themselves just like Russian bourgeois did not believe they are going to end up in exile/dead together with the "rich" they had been against (p…

I am just trying to explain that your assumption about the intent of the left is wrong, that's all. You're basing this assumption on bad analogy with Russian revolution and on your fear, while you should base it on, I don't know, actually talking to some people on the left? Again, most of them don't think that revolutionary escalations are a good idea. (Although that's the path history often takes.)

But if you don't want to trust other people, then I don't see how could I convince you.

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

#154

Post by drewgross »

meric wrote: post #131
sytelus wrote: post #124

Earlier quoted context omitted.

No, increased government income is not required to decrease inequality. We just need basic fairness in US. Here are the policies I would suggest: - Capital gains should be taxes at least at same rate as income generated by labor. - Remove incentives from economically unproductive investments such as real estate. For example, discourage home ownership unless its primary residence. - Limit political contributions from…

To encourage the pursuit of financial independence from government at a reasonable retirement age: - Progressive tax on consumption. No tax on labor. - Zero capital gains if total assets is below $2M. To discourage foreign home ownership: - An non-primary residence or foreign investment in real estate can only be leasehold, maximum 25 years. At the end of which the control of property reverts back to the original own…

Even a flat tax on consumption (like the sales tax) is regressive in effect, because the poor spend a greater fraction of their income on consumption. Now, if you suggested a high tax on luxury goods and services, and no tax on necessities like unprepared food, basic clothes, etc. I might be able to get behind that.

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

#155

Post by zappo2938 »

jrochkind1 wrote: post #138
zappo2938 wrote: post #98

Earlier quoted context omitted.

It seems ridiculously simple to me. Let's define wealth equality as 100 people all with 100,000 dollars a piece. Rather than having a small group of people either in a board room on the top floor of 85 Broad St. or a small group of communists allocate resources, let everybody use their money as a vote to decide how to allocate resources. People need to eat so some money will be spent on food. Most people will need tr…

I question your assumption that in the actual real world, having more money has any kind of correlation to being a better decision-maker. Also, more power to people who make the best decisions isn't, I think, what people generally understand 'democracy' to be, in part because there's no "objective" way to determine who are the better decision makers. I also still don't understand why there'd be some 'threshold' (thre…

It's not a threshold of the amount of wealth a person has before he or she makes bad decisions. Have you read James Surowiecki's The Wisdom of Crowds?[1]"Large groups of people are smarter than an elite few, no matter how brilliant—better at solving problems, fostering innovation, coming to wise decisions, even predicting the future." If that is true, no matter how smart or stupid individual people are, a group of 100 people each worth $10,000,000 using their money as a 'vote' will be better at investing than a single billionaire. The Koch brothers have $100 billion between them. They will spend one billion this year on political influence. They control the conservative conversation which has lead to people who follow them controlling a majority of state legislatures, a majority of state governors, the House, the Senate, and the Supreme Court. Those two are not stupid. However, any single person or small group of people with that much power is dangerous no matter how smart they might be. The point isn't to take money from rich people to finally pay for the Iraq war. The point is to take money from the most wealthy to prevent any one person or small group of people from having that much influence. Even the president steps down from power after two terms because our form of democracy doesn't work when someone passes a threshold of power from consolidation. The threshold is an amount of power that is consolidated where a person or small group of people are not longer competitive because they can eliminate all competition. Don't allow the consolidation of wealth into a few too big to fail banks. Break up the banks. Tax inheritance above $10,000,000 90%. Their children can innovate and invest to make money like the rest of us. I don't feel bad for them at all. Have a progressive tax structure using income, capital gains, and corporate taxes to prevent people from acquiring more than $250,000,000. Don't threaten me saying they are going to leave the United States. Please, please, please make them leave. They leave behind Berkeley, Harvard, Princeton, MIT, Cal, Stanford, and every other research school and university which will probably do better without their influence on the faculty. They will leave behind the abundant natural resources and infrastructure which sadly lately under their influence has been neglected. They will leave behind the most productive work force in the world. Americans specialize in management and upper management will see an increase in income without them taking a bulk of it. Please, make them go away.

[1]http://www.amazon.com/The-Wisdom-Crowds-James-Surowiecki/dp/...

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

#156

Post by kamaal »

danhak wrote: post #35
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…

> 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. You are inventing a complete straw man. That is not what I want nor is it what most other people who are concerned about wealth inequality want. What we want are policies that do not make it so absurdly easy for those who already have access to cap…

>>What we want

Who is we?

>>policies that do not make it so absurdly easy for those who already have access to capital to continue to accumulate wealth and influence at an exponential rate

This will happen no matter what policy you implement very simply because if you want a society based on freedom and merit there are various motivations for people to do or not do things, like: choosing careers paths, making decisions to save and invest, how much time they spend on improving personal skills, how hard and how many hours some one is willing to work to achieve what they want etc.

Based on what your value system and what you want in your life, with all the priorities there will always be some one who is frugal, hard working, is making sound financial decisions, working on personal skills and doing all that who will grow exponentially in comparison to others.

>>while those who are not born under such fortunate circumstances live with an ever-increasing disadvantage.

Here is a hint, unless you are born in war torn Syria or are trapped in some African civil war or born with disease you are already in a 'fortunate circumstance'. You may not realize, which is a very different problem altogether. Either there systems like social security designed to handle the exceptions.

>>Of course this is inevitable to some degree due to the nature of compound interest.

A tip, compound interests doesn't work just with money. It works with skills, knowledge, productivity, experience. You literally have to enforce laziness as a law if you want to stop this.

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

#157

Post by wanderingjew »

josephpmay wrote: post #76
OmarIsmail wrote: post #45

It is insane (and also very educational) that so many people are completely missing pg's point - author of this response included. I blame pg a little for using the phrase "income inequality" at all since it seems to be a trigger for many people and shuts down their critical reading and reasoning abilities. Let me try to phrase it in a clearer way. If you focus on reducing "income inequality" then you will reduce inc…

Exactly, and I'm not sure why you're downvoted. PG and the author of this Medium article are basically arguing for the SAME thing. They want policies that allow the poor to have more economic growth opportunity. The main point of contention is the terminology "income inequality."

Are you suggesting that by using the term 'income inequality', PG is not communicating effectively?

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

#158

Post by tim333 »

throwaway_51661 wrote: post #123
icebraining wrote: post #121

Earlier quoted context omitted.

You know, $8M for 200 speeches isn't that much. People like Seth Godin and Malcolm Gladwell make ~$100k per speech, and they're not even former POTUSes.

The amount is not the point. The point is, companies/lobby groups who directly benefitted from Hillary's decisions as a secretary of the state, paid Bill a lot of money to give speeches.

The amount is kind of a point. There are estimates of Putin being worth $200bn http://cnnpressroom.blogs.cnn.com/2015/02/15/putins-net-wort...

Now that's what I call enriching the politicians. The Clinton's money is more like a regular CEO salary.

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

#159

Post by ZenoArrow »

dinkumthinkum wrote: post #147
ZenoArrow wrote: post #39

Earlier quoted context omitted.

If old companies move, new companies would spring up to take their place. The reason this would happen is because the demand is still there. People don't stop buying clothes just because a clothes shop stops trading in their country.

The people in the Cayman's will successfully fulfill that demand, I don't really understand that point.

Explain how.

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

#160

Post by csallen »

js8 wrote: post #128
OmarIsmail wrote: post #45

It is insane (and also very educational) that so many people are completely missing pg's point - author of this response included. I blame pg a little for using the phrase "income inequality" at all since it seems to be a trigger for many people and shuts down their critical reading and reasoning abilities. Let me try to phrase it in a clearer way. If you focus on reducing "income inequality" then you will reduce inc…

I know you mean well, but here's a counterargument. The more unequal societies tend to be less socially coherent and less interested in pushing universal whatever. So it's probably a chicken-egg problem, and the standard way to address a problem like that is to fix both ends at once, little by little. And it's insincere to think that universal access doesn't affect the wealthiest at all. In many cases (not all, it's…

The more unequal societies tend to be less socially coherent and less interested in pushing universal whatever. So it's probably a chicken-egg problem, and the standard way to address a problem like that is to fix both ends at once, little by little.

If the rich are the primary actors against social and economic progress ("universal whatever") and are powerful enough to prevent it, what makes you think we have any chance at stripping them of their wealth? It's akin to attacking the enemy's main castle in order to weaken their small fort. Why not just attack the small fort? If you win against the main castle, then your theory that the small fort was too strong must have been false.

In many cases (not all, it's probably not the case of Y combinator kind of people), the wealthiest got where they are by abusing the poor.

If that's true, why don't we just target those abusers?

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