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The rich are hoarding economic growth

vox.com

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Re: The rich are hoarding economic growth

#141

Post by Deadolus »

gehwartzen wrote: post #95

Nobody seems surprised when all wealth is accumulated by one player at the end of a game of Monopoly. The figures in the article should then also not surprise anyone. This is not some flow in our system, this is the natural progression of capitalism as designed.

Monopoly was actually originally designed to demonstrate the "surprising" effect of accumulation of wealth by a single player (via rents). With the implied moral judgment that this is unfair/unjust: https://en.wikipedia.org/wiki/The_Landlord%27s_Game

edit: via rents, not property taxes

Re: The rich are hoarding economic growth

#143

Post by flatfilefan »

jkroso wrote: post #16

So what caused the change in 1973?

Could it be an oversupply of labor that was caused by the availability of the pill and the following growing immigration asking for lower wages instead of incumbents https://tradingeconomics.com/united-states/labor-force-parti...

Re: The rich are hoarding economic growth

#144

Post by british_india »

seanmcdirmid wrote: post #54
manicdee wrote: post #43

Earlier quoted context omitted.

For every problem there is a solution which is simple, elegant, and completely wrong. So here's my attempt: 1. Remove subsidies including tax writeoffs like depreciation. Either an asset brings value or it doesn't. 2. Tax revenue not profits. Either you make a profit selling a thing or you don't. Fancy tricks like buying an item from a fully owned subsidiary and selling it at a loss to compensate for profits from ser…

> Tax revenue not profits. Either you make a profit selling a thing or you don't. Fancy tricks like buying an item from a fully owned subsidiary and selling it at a loss to compensate for profits from services is not realising the value your services and products bring to the economy You mean, make Apple a Chinese company because being an American one is no longer viable? A VAT would be more reasonable, as it taxes v…

No, stop permitting companies to give their IP to a foreign subsidiary to pay license fees that wipeout their domestic US taxable income

Re: The rich are hoarding economic growth

#145

Post by sokoloff »

mdorazio wrote: post #17
sokoloff wrote: post #3

1% real income growth per year is still fairly substantial IMO. Over a 41 year career, your purchasing power goes up by half, yet that's treated as "stagnating" which implies something far worse than 1% per year.

I think the nuance here is that it's stagnating relative to overall income growth . I.e. 1% isn't terrible if everyone is getting roughly 1%. But that's not the situation - the economy is growing more rapidly than that, but only a tiny percentage of people are seeing big gains for their own incomes.

There's no reason to me to think that the vast majority of people should see substantial real income gains. Money is fundamentally a claim check on someone else's labor and/or resources. If you have more money (in real terms), you have a greater claim on others' resources. That can't stay true for an entire population over a long period of time. It's temporarily true for the US, because we're able to take advantage of labor from other, cheaper places in the world, in the process, making that other place better off as well.

Those of us in the broad swath from 10th to 99th percentile don't really compete for those things that are purchased by the top 0.01%, so I basically don't care how fast their incomes grow, nor how fast the prices of caviar, ski lodges in Jackson Hole, etc. grow.

I care about food, housing, transportation, and education. In competing for those resources, there's fairly broad equity in the charts in the vox article (realizing that people don't stay static on that chart).

Re: The rich are hoarding economic growth

#146

Post by seanmcdirmid »

british_india wrote: post #144
seanmcdirmid wrote: post #54

Earlier quoted context omitted.

> Tax revenue not profits. Either you make a profit selling a thing or you don't. Fancy tricks like buying an item from a fully owned subsidiary and selling it at a loss to compensate for profits from services is not realising the value your services and products bring to the economy You mean, make Apple a Chinese company because being an American one is no longer viable? A VAT would be more reasonable, as it taxes v…

No, stop permitting companies to give their IP to a foreign subsidiary to pay license fees that wipeout their domestic US taxable income

You mean, they should just develop their IP abroad then? Microsoft has a lot of R&D centers in china already, other companies are following suit.

Also, please say that you mean American companies, you obviously don't mean companies like SAP or infosys that the American companies compete with.

Re: The rich are hoarding economic growth

#147

Post by AstralStorm »

JamesBarney wrote: post #113
cs702 wrote: post #25

The title and the tone of the OP are a bit inflammatory for my taste, but the data and graphs from the research paper are eye-opening: most economic growth in the US over the past three decades has indeed gone to the top 1%, and particularly to the top 0.01%, leaving everyone else behind.[1] Here's the money shot: https://cdn.vox-cdn.com/uploads/chorus_asset/file/9013427/Sc... However, rather than debate the causes o…

The cause matters because it tells us what the workable solutions are. For instance say a company's CEO was the only person who got a raise for 30 years. One possibility is the CEO was a real go getter who kept getting better and more valuable at his job and while everyone else stagnated. The other possibility is that the CEO locked all of his employees into non-competes, keeping their salaries low, and freeing up bu…

Both are solved with making marginal gains tax hyperregressive. Said CEO would gain little in either case on his salary. (Making it gains also closes loopholes like getting buildings, deals, land, expensive cars or such.)

Regardless of whether he bargained for it or squashed the employees, someone paid for this gain. With increased productivity they didn't benefit from or with plain old loss.

It probably really is the only way to prevent rich from getting much richer than everyone else and taking it all.

Re: The rich are hoarding economic growth

#148

Post by AstralStorm »

prostoalex wrote: post #44
cs702 wrote: post #25

The title and the tone of the OP are a bit inflammatory for my taste, but the data and graphs from the research paper are eye-opening: most economic growth in the US over the past three decades has indeed gone to the top 1%, and particularly to the top 0.01%, leaving everyone else behind.[1] Here's the money shot: https://cdn.vox-cdn.com/uploads/chorus_asset/file/9013427/Sc... However, rather than debate the causes o…

Current government policies penalize income (39.6% at the top bracket) and subsidize company-sponsored non-monetary benefits (health, dental, vision, meals, commuter benefits, ESPP, 401k matching, ISOs, NSOs), so not all that surprising that workers see less income and more of non-monetary benefits as a result. The workable solution through a tax policy might include reducing the number of brackets for personal incom…

The thing is that the richest could easily have 90% income garnished without even moving this chart one bit.

Re: The rich are hoarding economic growth

#149

Post by AstralStorm »

Frondo wrote: post #119
WhitneyLand wrote: post #85

Earlier quoted context omitted.

Why should we be looking for solutions? To be clear I would agree it's intuitively disturbing and seems "not fair". But do you call for solutions because: 1) There might be a way to have higher productivity than we have now. This can't be why, it's always a goal regardless right? 2) Strategies should be considered than intentionally reduce productivity and/economic growth in order to increase worker compensation. Now…

"Why should we be looking for solutions?" At the end of the day, because I and the other not-ultra-wealthy want that money the ultra-wealth are capturing to be more equitably distributed. The system didn't just end up this way as a quirk of chance--the ultra-wealthy have used their money to influence laws to arrange everything this way. They didn't need a reason to make it this way, except they wanted more. Why even…

Because if we won't there will be hard revolutions and social madness that hasn't been seen since October Revolution.

Sooner or later.

Re: The rich are hoarding economic growth

#150

Post by zaptheimpaler »

WalterBright wrote: post #126
zaptheimpaler wrote: post #125

Earlier quoted context omitted.

My simple point is there are many cases where money better serves society as charity (no return on investment) rather than as an investment. There are cases where the free market fails to solve societal problems - all those charity companies and problems like healthcare/education. I'm tired of seeing the same trope of "the free market solves all problems" when there are clear counterexamples. Its clear as day to me t…

Charity and the free market are not antiethical to each other. Charity is part of the free market. Also, you're arguing that you know better how to spend money than others. Probably about 90% of people feel that way about it, too, and they all have different ideas than you.

I am talking specifically of incentives. Capitalism incentivizes creation of economic value and ideally societal good by rewarding it with money. This particular incentive structure does not reward things like charity because there is no money to be made. People do it for reasons outside of money, which is great but limited to a few since its not really incentivized by the system as a whole. So i would not say charity is part of the free market.. it is orthogonal to the market.

As for the central planning argument that a single planner cannot effectively organize all of society, I agree. But central planners (such as government) already do have some influence in the structure of the economic system, which behaviors are rewarded vs. not.

Don't you think there might be other ways of setting up the world that incentivize behaviors differently? Whatever way has worked so far might not be the best going forward when the problems we are solving at society scale change.

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