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To Understand Rising Inequality, Consider Janitors

nytimes.com

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Re: To Understand Rising Inequality, Consider Janitors

#201

Post by conanbatt »

RealityNow wrote: post #187
choxi wrote: post #180

We should tax wealth, not income. [1] The majority of income the top 0.1% make is from investments and gets taxed as capital gains, only about 15% of their income is taxed as ordinary income. [2][3] We have an economic system where it's dramatically easier to make money the more money you already have. If you have $50M, you can park it in an index fund to get 4% returns and make $2M every year just off of your invest…

I agree, but how would we enforce a wealth tax? Seems like it'd be really easy for rich people to hide their money in assets. What about just printing money? Not ideal obviously, but there'd be no way to avoid the inflation "tax".

There are many ways to protect yourself from inflation. And inflation has also devastating consequences to all assets and incomes.

Re: To Understand Rising Inequality, Consider Janitors

#202

Post by conanbatt »

pcrh wrote: post #170
Taek wrote: post #119

Earlier quoted context omitted.

Taxes aren't the core issue. It's more fundamental than that. Imagine taxing bill gates at 95%. He's still thousands of times more wealthy than your average individual. That's not going to change much, other than that America is going to become highly avoided because of the tax pressures. The real issue is that the fundamental structure of our economy aggregates wealth towards the top. Employees who add millions of d…

Inheritance tax was the original solution to this. Someone could be as rich as Croesus during their lifetime, but on their death returned the money from whence it came. Their offspring could benefit from a generous endowment of a proportion of this wealth, say 10%-20%. Edit: and no sneaking about with Trusts, either.

Inheritance taxes are always avoidable, and they could also have devastating consequences. Even if you could effectively prevent a single coin getting to the hands of your children, that would mean lavish expenditures, not investment.

Re: To Understand Rising Inequality, Consider Janitors

#203

Post by aswanson »

existencebox wrote: post #164
aswanson wrote: post #150

Earlier quoted context omitted.

Great, now rewind and re-run that history but with the Mike Marrkula, Andres Bectolsheim, and Peter Theil being taxed and 90 percent above 400k. How motivated would they have been to risk their capital knowing that 1)They have much less of it 2)What they do make will be taxed at 90 percent 3)Bonds are a safer bet. Further, in this thought experiment, assume that Perkins and Seqouia are much smaller, less successful f…

One would hope that we could draw the appropriate logarithmic taxation curve to constrain risky investment without eliminating it outright. I personally do not see a massive problem with curtailing some of the power/amount of money flowing around in some of these entities; but don't see it as an all or nothing as you suggest. I'd note however that my original point was to emphasize the smallness of most of the initia…

Also, if you could, would you direct me to the sources of some of your readings of history so I can better understand the perspective you presented, especially regarding the 70s and 80s.

Re: To Understand Rising Inequality, Consider Janitors

#204

Post by RyanHamilton »

chrisco255 wrote: post #177
Joe-Z wrote: post #134

Earlier quoted context omitted.

You have to start somewhere though. Changing the "fundamental structure of our economy" takes nothing short of a revolution.

Wealth is not a zero sum game.

Are you sure?

The earth has finite resources. Wealth is a zero sum game. Even if you want to look at things like entertainment that can be reporduced cheaply, musicians and directors need fed, food is limited, therefore even films/music are limited.

Re: To Understand Rising Inequality, Consider Janitors

#205

Post by stickfigure »

arkitaip wrote: post #123
dexterdog wrote: post #107

Earlier quoted context omitted.

So, IOW they cherry-picked what was likely the most driven of the janitors in the past and compared it to a random one today. That seems honest.

It's not even the point of the example and they address that in the article. They point is that the janitor at Kodak had opportunities to advance her career, whereas the janitor working at Apple has none because she doesn't even for the Apple.

If you look for it, you could probably also cherrypick a modern contract janitor that learned how to code in her spare time and now works for Goosoftbook. Especially if you choose a decade-long time period.

Gail's story may be inspiring but it may also be unique, even in the 80s.

Re: To Understand Rising Inequality, Consider Janitors

#206

Post by aninhumer »

X86BSD wrote: post #146
winstonewert wrote: post #99

Earlier quoted context omitted.

Income inequality has been increasing since the 1970s, so I submit the underlying cause cannot have been a policy change in 1986.

Interesting that you noted it started in 1970. Can you think of anything that happened in 1970 that would have started this death spiral of our purchasing power? Perhaps say the severing of our money from gold maybe? Look it's rather simple. You can wax and wane about tax policy until you are blue in the face. The answer lies in the currency, not taxation. I give this example every single time these stories surface.…

>And every year prices go up it's your currency losing more value, more purchasing power.

This is only true if wages don't go up to match it, and if they don't, then we should be asking why not. People should be insisting on raises at least in line with inflation, and if they're not able to get even that, then it suggests a power imbalance.

And besides, currency devaluation isn't some secret conspiracy, or even an inherent property of fiat currency, it's the explicit and stated aim of our monetary policy. Most economists seem to believe a constant low level of inflation is a good thing and so that's what we do. If you disagree, you should argue with that directly. And if you want a stable currency value, I would suggest monetary policy would be far more effective at achieving that than the gold standard.

Re: To Understand Rising Inequality, Consider Janitors

#207

Post by khitchdee »

cantstop99 wrote: post #185
khitchdee wrote: post #44

Earlier quoted context omitted.

Agree. In a capitalist society, this is par for the course. If you try to build systems to remove this inequality, you have to move towards communism since you will then need far more complex control mechanisms.

Um we already have those, they're called _laws_, and strengthening them doesn't mean a slippery slide into communism (whether or not that itself would be a bad thing is another discussion entirely). But thank you for McCarthying this so quickly.

Having a mimimum wage law is one thing, but going further than that and mandating how much who gets paid beyond what the market decides is venturing into the wild west of law making -- you never know what you're going to end up with.

Re: To Understand Rising Inequality, Consider Janitors

#208

Post by zanny »

RealityNow wrote: post #187
choxi wrote: post #180

We should tax wealth, not income. [1] The majority of income the top 0.1% make is from investments and gets taxed as capital gains, only about 15% of their income is taxed as ordinary income. [2][3] We have an economic system where it's dramatically easier to make money the more money you already have. If you have $50M, you can park it in an index fund to get 4% returns and make $2M every year just off of your invest…

I agree, but how would we enforce a wealth tax? Seems like it'd be really easy for rich people to hide their money in assets. What about just printing money? Not ideal obviously, but there'd be no way to avoid the inflation "tax".

You can do a wealth tax by targeting the big ticket items. Rather than invade everyone's home with tax collectors to guesstimate how much every couch cushion you have is worth, you can hit probably 98% of wealth by just taxing the calculated value of owned land and buildings (which is already being appraised for property taxes in most states) and stocks, bonds, and options.

So we already invade your privacy to appraise the former, and the later has to be be public because companies need to know who owns what shares and the trading platforms need to associate users to shares they own. Both can be used by government to provide ownership details.

You would also want to wealth tax companies for total global cash-on-hand assets they have as well. Those are also required to be public record already. That way private business executives cannot tax haven their own stuff under an LLC, and companies like Google / FB are punished for hoarding hundreds of billions in offshore accounts they have no intent to spend or bring back into the states.

Of course, this is all saying "government should do X" which is just for entertainment, pretty much. The US is in no condition to act in the will of the people at all right now anyway, so its all speculation - you would have to fix the broken democracy first.

Re: To Understand Rising Inequality, Consider Janitors

#209

Post by WalterBright »

acidburnNSA wrote: post #199
WalterBright wrote: post #145

Earlier quoted context omitted.

> What fraction of wealth are the richest among us spending and investing rather than saving? 100%. Nobody has a Scrooge McDuck cash vault. Bank deposits are also spent, in the form of depositor's money being loaned out by the bank.

I should said: "Investing in things that help society." Arguably, the bit of money in banks that gets loaned out as mortgages and then repackaged and sold off as mortgage-backed securities which then get bet on with even more leverage as collateralized debt obligations is helping the financial industry middle-men who cash out on the fees a lot. Obviously the classic depositing/loaning service of banks is essential fo…

> Investing in things that help society.

People tend to invest in things with a high rate of return. That high rate signals it is doing things that people want done and are willing to pay for. I.e. it helps society.

> a way to provide capital to people who need it

That's exactly what banks do. My bank branch is plastered with posters trying to sell a loan to everyone who walks in.

> passively invested in banks and things like index funds

If you're arguing those are not productive investments, I don't think that's very defensible.

> how much is not really doing that much.

If you're arguing that rich people tend to invest in low performing investments, that doesn't make much pragmatic sense. People get rich by investing in highly performing investments, not dogs.

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