How Paul Graham Gets It Wrong in “Economic Inequality” • Hacker News Board

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

#161

Post by Apocryphon » Mon, Jan 04, 2016, 8:02 AM UTC

PeterisP wrote: post #137

tahssa wrote: post #17

Earlier quoted context omitted.

Capital accumulation can still happen without wage accumulation. Just don't pay yourself too much and keep the money inside the business. Naturally the money will get spent on building things like tesla.

Tesla happened because individuals were able to take extremely large sums out of an unrelated business (Paypal), as did a huge part of early stage tech investments, funded at that point mainly by individuals who got multimillion exits in their previous businesses. If the money had been kept inside business, then you'd have the innovation rate that internal subsidiaries of IBM achieved, not the innovation rate of the…

Or perhaps with sufficient tax revenue in its coffers, the federal government would be able to properly fund NASA, or a Manhattan Project aimed at reducing oil dependency.

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

#162

Post by meric » Mon, Jan 04, 2016, 8:11 AM UTC

drewgross wrote: post #154

meric wrote: post #131

Earlier quoted context omitted.

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.

It means the marginal tax rate for each dollar a person spends in a year increases with the number of dollars they spend.

An example of a progressive consumption tax bracket:

Dollars spent, marginal tax rate.

$0-$5000: 0%

$5001-$10000: 10%

$10001-$30000: 15%

$30001-$80000: 27%

$80000-$120000: 35%

$150000+: 40%.

So if a person spends $15000 a year, they have to pay an additional $1250 in tax.

They can spend on food, clothes, luxury boats, and are taxed according to the number of dollars they spend.

I don't see how that is regressive in anyway.

This way, as long as the spending of two people are the same, a person who makes and spends $20k a year, and a person who makes $80k and spends $20k a year, and works 5x harder, are both taxed at the same rate. This removes the disincentive to work hard while being frugal.

You can also pair this with a "Universal Basic Income" later on - e.g. first $10000 of spending in a year is -100% tax, meaning completely subsidised by the government.

Welfare could be means-tested on spending rather than income, so folks don't have to worry about losing welfare when they get a job.

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

#163

Post by js8 » Mon, Jan 04, 2016, 8:42 AM UTC

csallen wrote: post #160

js8 wrote: post #128

Earlier quoted context omitted.

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 ch…

I think you have a good point. But I still think polarization of the society is an obstacle that has to be overcome in sync with this. Things like people supporting Donald Trump. I wish I had a good recipe/idea how to reverse that (at least some of these authoritarian trends), but I don't.

So it's more like a distraction is needed at the main castle in order to take the small fort.

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

#164

Post by adamlett » Mon, Jan 04, 2016, 9:40 AM UTC

grahamburger wrote: post #119

adamlett wrote: post #91

Earlier quoted context omitted.

When you say the government "squanders" money on projects like the F-35, it sounds like you think that the money spent just disappears and is gone, and all we're left with are some fighter jets of questionable value. But the money that the government spends goes back into the pockets of private citizens. Who then spend the money again, and spread it around. Silicon Valley, the symbol of entrepreneurship and self-made…

The same thing happens if someone gets rich and sticks their money anywhere but under their mattress.

But that's what they do! The ultrarich of the world can live handsomely off the interest of their fortunes and don't ever have to touch the principal, which just grows and grows.

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

#165

Post by sangnoir » Mon, Jan 04, 2016, 10:18 AM UTC

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…

> Their society is homogenous

Honest question (not directed specifically to you sradu): I've seen this statement pop up now and again, and every time I've seen it, it is referring to Nordic countries. I am beginning to suspect that it's a dog-whistle: am I wrong?

What exactly is being referred to as 'homogenous' and why is it an advantage? What disadvantages are presented by heterogeneity of other countries?

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

#166

Post by zo1 » Mon, Jan 04, 2016, 11:21 AM UTC

adamlett wrote: post #164

grahamburger wrote: post #119

Earlier quoted context omitted.

The same thing happens if someone gets rich and sticks their money anywhere but under their mattress.

But that's what they do! The ultrarich of the world can live handsomely off the interest of their fortunes and don't ever have to touch the principal, which just grows and grows.

That money still goes somewhere. You don't get interest by keeping money under your mattress. You get interest by loaning it out, or the value of something you own increasing. And even if you've "bought" something that appreciates in value, you've anyways lost the physical money which is now being spent by someone else.

Which is almost the same scenario as the one you suggested. So ultimately, it seems your complaint is not of the money being used/spread/churning throughout the economy, rather than being hoarded under the mattress. But rather, it seems you're complaint is with the fact that the rich have it and it's not being taxed for purposes you deem useful.

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

#167

Post by EliRivers » Mon, Jan 04, 2016, 11:25 AM UTC

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…

I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them.

It's because I believe that there are many things that make my life better that I simply could not provide from my own resources but, when my contribution is pooled with everyone else's, become viable and make my life significantly better. Off the top of my head, the transport system, the judicial system and attendant sub-systems, the healthcare system, research investment. Environmental management. Regulation in food production. I'm sure I could come up with many more.

If you didn't understand this, then I'm shocked at your ignorance.

If you did understand this, then why did you ask? Are you taking some kind of ridiculous, hyperbolic extremist view that nobody is advocating, in order to create the illusion of being a child arguing in a playground?

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

#168

Post by zo1 » Mon, Jan 04, 2016, 11:44 AM UTC

zappo2938 wrote: post #155

jrochkind1 wrote: post #138

Earlier quoted context omitted.

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 10…

>"I don't feel bad for them at all. [...]Their children can innovate and invest to make money like the rest of us"

That's a very negative attitude to have towards people with wealth above some magical number you deem "too-much".

People will get very illogical and angry when they see you blatantly stealing from their children. I know I will, because at the end of the day, I work for my progeny. An estate/inheritance tax is not taking away from my well-being, but from that of my children.

So, instead of fixing the problems with your form of governance, you decide to impose even more tyranny over the few who can possibly take advantage of it. The problem is not the money that allows them to possibly take advantage, but the corruptible system you have in place. Use that effort in making it actually noble like it's claimed to be.

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

#169

Post by zo1 » Mon, Jan 04, 2016, 11:53 AM UTC

zappo2938 wrote: post #108

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…

My argument is that not that the state needs to be 'fixing' things. I'm not saying wealthy people should contribute more just because they are wealthy. It is very unhealthy for the whole if money and the amount of power and control that comes with money gets consolidated into the hands of a very few. We don't need billionaires. I'd much, much rather have 10 people with $100,000,000 than one billionaire; even better i…

>"My argument is that not that the state needs to be 'fixing' things."

But that's exactly what you're advocating. According to this entire discussion, the state itself is broken in this case, and you want to use the state to cap/prevent the ultra-rich as a remedy to it being broken. How does that not count as "fixing things"?

>"We don't need billionaires."

Whether we need them or not is irrelevant, they simply exist. Or is their existence something you want to "fix"?

>"With the number of people worth more than $250,000,000 that we have now is just a massive disaster that ended with $15,000,000,000,000 debt on the backs of everybody."

No, sorry, you have no one but your politicians and political system to blame for that. If you know you have a fallible/corruptible system, and don't change it, then the fault is on you. By you I mean you and the general population. Consequently, if your political system means it is slow to change, and is susceptible to the whims of the public that is easily swayed by the media, then you have to rethink democracy.

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

#170

Post by totalrobe » Mon, Jan 04, 2016, 12:21 PM UTC

krainboltgreene wrote: post #151

totalrobe wrote: post #55

Earlier quoted context omitted.

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.

Oh, hi! How would that work?