To Understand Rising Inequality, Consider Janitors • Hacker News Board

Re: To Understand Rising Inequality, Consider Janitors

#211

Post by moe-n » Sun, Sep 03, 2017, 5:18 PM UTC

surfmike wrote: post #175

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…

How would you change it short of overthrowing capitalism? Capitalism, almost by definition, "allows the rich to increase their wealth without actually working" (although of course less wealthy people can do the same). Parent poster proposed a way to help workers by changing the incentives in the system to reinvest more into productivity/research, without throwing out the system that has made our society propsperous.

In the past there wasn't as much pressure on capitalism to be sustainable at a global level. This pressure has increased without anyone doing anything. Which means you just have to wait for one or two more 2008 level meltdowns.

Re: To Understand Rising Inequality, Consider Janitors

#212

Post by WalterBright » Sun, Sep 03, 2017, 5:21 PM UTC

RealityNow wrote: post #190

WalterBright wrote: post #140

Earlier quoted context omitted.

> thrust back into the economy This is another variation on the "rich people hoard cash" theory, which is completely false. Rich people invest all of their money back into the economy. Even bank deposits are invested back into the economy (when the bank loans it out). Scrooge McDuck cash vaults do not exist.

Parking money in index/hedge funds is not "investing it back in the economy". Bank lending is driven by demand, not deposits.

> Parking money in index/hedge funds is not "investing it back in the economy".

Of course it is. What do you think those funds invest in? Piles of cash?

> Bank lending is driven by demand, not deposits.

If that were true, banks wouldn't need deposits and certainly wouldn't offer free checking. They're not charities.

Re: To Understand Rising Inequality, Consider Janitors

#213

Post by tomjen3 » Sun, Sep 03, 2017, 5:21 PM UTC

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…

Rather than tax wealth, tax spending: no taxes on your income, no taxes on anything until you spend it. That way people will have more money to invest in companies allowing the economy to grow and create wealth, and we kill the ludicrous idea that consumption creates wealth, rather than construction. It does have the issue that this hurts poor people, but that is easily solvable with a direct transfer of (electronic) cash.

Re: To Understand Rising Inequality, Consider Janitors

#214

Post by chrisco255 » Sun, Sep 03, 2017, 5:22 PM UTC

mathiasben wrote: post #36

The underlying cause of this whole issue is the changes in tax policy instated in the Tax Reform Act of 1986, previously income was taxed at higher rates unless deductions were utilized which forced those earnings back into the economy creating jobs funding research, etc.. As it's become easier to retain more earnings there's little incentive not to optimize an entire corporation solely with the purpose of generating…

Only if you bring back 1954 tax deduction laws too. Most corporate compensation was in the form of generous expense accounts. People would write off cars, real estate, dining expenses and even travel as a perk. So on paper, income was lower but in reality, executives earned much, much more. The 1986 tax reform act changed all that.

Re: To Understand Rising Inequality, Consider Janitors

#215

Post by mathiasben » Sun, Sep 03, 2017, 5:27 PM UTC

chrisco255 wrote: post #214

mathiasben wrote: post #36

The underlying cause of this whole issue is the changes in tax policy instated in the Tax Reform Act of 1986, previously income was taxed at higher rates unless deductions were utilized which forced those earnings back into the economy creating jobs funding research, etc.. As it's become easier to retain more earnings there's little incentive not to optimize an entire corporation solely with the purpose of generating…

Only if you bring back 1954 tax deduction laws too. Most corporate compensation was in the form of generous expense accounts. People would write off cars, real estate, dining expenses and even travel as a perk. So on paper, income was lower but in reality, executives earned much, much more. The 1986 tax reform act changed all that.

my proposal is to replace the current tax code with the 1954 act.

Re: To Understand Rising Inequality, Consider Janitors

#216

Post by JSONwebtoken » Sun, Sep 03, 2017, 5:28 PM UTC

foepys wrote: post #87

sw00pur wrote: post #83

Earlier quoted context omitted.

That's like if you had two cars and the government took one of them. "What do you need two cars for?"

No, it would be like I had three big houses, two boats, and 10 cars. What do I need half of this for?

Bernie Sanders has three big houses, a boat, several cars, and multi-million dollar book deals. What does he need half that stuff for?

Re: To Understand Rising Inequality, Consider Janitors

#217

Post by tomxor » Sun, Sep 03, 2017, 5:29 PM UTC

> her $16.60 an hour works out to $34,520 a year.

Interesting... I'm developer at a comparably tiny company, I get paid slightly less than her per hour but a larger salary overall, and my rent is less than half of hers (and it's not considered cheap around here).

I know i'm not paid top notch but all I read here is it's hard to be a janitor in expensive places.

[EDIT]

Maybe this is not a fair comparison, I'm not paid hourly, and all I have revealed here is that I work rather a lot of hours. She does 44ish hour weeks, and to be fair as a cleaner you are unlikely to physically be able to work more (consistently).

The ratio of pay to rent is ridiculous though, (that is a fair comparison) my rent is way under half hers. If housing is that expensive in that area then janitors should be paid more...

Re: To Understand Rising Inequality, Consider Janitors

#218

Post by dingaling » Sun, Sep 03, 2017, 5:30 PM UTC

aninhumer wrote: post #206

X86BSD wrote: post #146

Earlier quoted context omitted.

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 in…

> People should be insisting on raises at least in line with inflation

To be blunt, that really is SV cuckoo-land thinking.

In 22 years of employment, 18 in IT with Fortune 100s, I have never had a job in which that was possible.

Why would a company voluntarily increase its personnel costs by the rate of inflation?

Re: To Understand Rising Inequality, Consider Janitors

#219

Post by JamesBarney » Sun, Sep 03, 2017, 5:31 PM UTC

conanbatt wrote: post #200

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…

Maybe we should stop thinking taxes are the solution to inequality. "Cutting all the high trees so the forest looks even".

Taxation is both effective, and far less invasive to markets than many other solutions.(like minimum wages, enforced labor unions, changing the way companies pick or compensate CEOs). So that's why it's brought up so often.

What are some solutions you're aware of that are equally effective and less invasive?

Re: To Understand Rising Inequality, Consider Janitors

#220

Post by choxi » Sun, Sep 03, 2017, 5:32 PM UTC

conanbatt wrote: post #200

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…

Maybe we should stop thinking taxes are the solution to inequality. "Cutting all the high trees so the forest looks even".

Sure, I should have stated my assumption: there will always be inequality in a capitalist economy.

But you can have varying levels of inequality and the extremes are probably not healthy. My suggestion above wouldn't create perfect equality, it just fixes the broken incentives we currently have that reward us for hoarding wealth and penalize us for earning it.