To Understand Rising Inequality, Consider Janitors • Hacker News Board

Re: To Understand Rising Inequality, Consider Janitors

#291

Post by dlp211 » Sun, Sep 03, 2017, 7:40 PM UTC

ericd wrote: post #265

choxi wrote: post #220

Earlier quoted context omitted.

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.

I would suggest that we currently don't do nearly enough saving as a nation, on average, and probably shouldn't further disincentivize that.

Those who can afford to save do, those who can't don't. There isn't someone out there making $50k/yr raising a family saying "if capital gains rates were just a little lower I would save so much of my paycheck". I on the other hand am going to put my money in the markets whether the capital gains rate is 15% or 30% because I have used up all my tax-advantaged account space and still have extra money.

Re: To Understand Rising Inequality, Consider Janitors

#292

Post by nnfy » Sun, Sep 03, 2017, 7:41 PM UTC

erentz wrote: post #286

conanbatt wrote: post #240

Earlier quoted context omitted.

> Taxation is both effective, and far less invasive to markets than many other solutions. I don't really agree with this. Taxes are distortive and doesn't necesarily help inequality. It might even make it worse. But also, there is taxation as a progressive system of government funding, as there is taxation as in "You will never own more than X, because the government will seize it". In terms of solutions, I'm not a p…

They don't have to be. A "death tax" for example that takes 100% of a persons estate at death would be both simple, non distortive, and in terms of equality level the playing field every generation.

Yes, I look forward to being barred from sharing the wealth that I've accumulated with my children and other loved ones. Why should they have any advantage, right? After all, you probably think I didnt do anything myself, right?

Who are you to make that decision for someone?

And, frankly, you're delusional if you think an estate tax is non distortive. The entire meaning of wealth would change for the elderly.

One cannot treat wealth like a zero sum game. More importantly, we need to rid ourselves of this growing crabs in a bucket mentality, because we all suffer when we hold society's best back. Is it "fair" in the sense of absolute wealth? No, but people shouldn't be so focused on their neighbor's plate then theirs is full enough that they can spend hours complaining online about how much more money the 1% have. Perhaps we should redefine fair wealth distribution to rightfully consider merit, which is shockingly absent from the majority view here.

Re: To Understand Rising Inequality, Consider Janitors

#293

Post by fapjacks » Sun, Sep 03, 2017, 7:41 PM UTC

scarface74 wrote: post #263

Buttons840 wrote: post #225

Earlier quoted context omitted.

Well. After they've already taken in 400k they could continue to take in money at about 40k per year. If you want to know why people are willing to work for 40k a year, there are lots of people you could ask in our society.

Have you ever thought that while you're looking at 400K a year as excessive, there are millions of people like the janitors who think our $130K+ tech salaries should also be taxed more heavily and redistributed?

That's part of the problem. Janitors think we're part of the big wealthy one percent, when we're bringing home far more similar wages than the actually wealthy folks. The problem is that the truth differs so greatly from everyone's perception. And how can anybody expect to solve a problem when we can't identify the constituents properly?

Re: To Understand Rising Inequality, Consider Janitors

#294

Post by firebones » Sun, Sep 03, 2017, 7:42 PM UTC

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.…

Not 100% sure that I understand your point about silver. Is it that you believe it has retained its buying power? (Setting aside that the silver in a pre-1964 quarter could only buy about 36 ounces of milk in 1970 given the $1.15/gal retail price then.)

Let's say that on Jan 1, 1970, you took your pre-1964 quarter and pulled out the 6.25 grams of silver in at the price of $12.37 a troy ounce. You'd get $2.48.

If you put that $2.48 in a money market earning just half the fed discount rate for the last 47 years, it'd be worth $7.99 today. The silver would be worth $3.37. (The currency would likely be a lot more that $7.99, because the difference between money market rates and fed discount rate historically hasn't been as high as the very conservative 50% markdown I used here.)

There are a lot of moving parts in an economy that affect cost of living. A lot of stuff has changed since 1970 beyond going off the gold standard. Massive productivity changes, energy and raw material price shocks, demographic changes, policies and laws changing behaviors all across the individual and business landscape. It's difficult to isolate one individual factor as the sole cause.

Re: To Understand Rising Inequality, Consider Janitors

#295

Post by samsonradu » Sun, Sep 03, 2017, 7:43 PM UTC

WalterBright wrote: post #166

collyw wrote: post #158

Earlier quoted context omitted.

Why do tax havens exist then?

Reagan didn't get rid of all of the tax shelters. But the idea that tax havens (i.e. tax shelters) are relatively crummy investments remains. The reason Apple, etc., invest a lot of their cash overseas is not because those are better investments, but because the US corporate taxes are so much higher those foreign investments become more attractive. Level the taxes, and the money will be reinvested back in the US.

Media keeps telling us Apple is not investing, but hoarding cash overseas to avoid the taxation. Care to elaborate how and what they are investing in?

Re: To Understand Rising Inequality, Consider Janitors

#296

Post by pcrh » Sun, Sep 03, 2017, 7:43 PM UTC

conanbatt wrote: post #276

pcrh wrote: post #238

Earlier quoted context omitted.

Tax avoidance is a perennial problem, to be sure. There's always an "arms race" between the taxers and the avoiders, but that isn't a reason not to have taxes in the first place.

In the context of evaluating a tax, the ability to avoid it and the difficulty to apply it is definitely one key design concept. A tax on people that eat their brocoli would be highly impractical!

You're correct in that it's foolish to institute an uncollectable tax, but I don't think inheritance tax necessarily falls into that category any more than, say, capital gains taxes.

Re: To Understand Rising Inequality, Consider Janitors

#297

Post by fapjacks » Sun, Sep 03, 2017, 7:44 PM UTC

dozzie wrote: post #148

scarface74 wrote: post #64

Earlier quoted context omitted.

What incentive would anyone have in making more then 400K a year if you were going to be taxed at 90%?

> What incentive would anyone have in making more then 400K a year if you were going to be taxed at 90%? I would be quite happy to earn more, and then 400K a year, as you say, even if he was taxed at 90%.

Right, it's so ridiculous that people act like suddenly there would be a dearth of people "willing" to work for $400k salaries. Like raising the tax rate would suddenly dry up the pool of people wanting to be millionaires. Gimme a break!

Re: To Understand Rising Inequality, Consider Janitors

#298

Post by greglindahl » Sun, Sep 03, 2017, 7:45 PM UTC

dingaling wrote: post #218

aninhumer wrote: post #206

Earlier quoted context omitted.

>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?

Before I moved to SV, I saw a lot of companies that gave COLAs. You might go easy on the insults, in addition to not generalizing from your personal observations to an entire country's economy.

Re: To Understand Rising Inequality, Consider Janitors

#299

Post by dlp211 » Sun, Sep 03, 2017, 7:46 PM UTC

mamon wrote: post #227

RealityNow wrote: post #187

Earlier quoted context omitted.

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".

For starters you could just swap the tax rates: make income tax of 15% and capital gains tax of 35%.

That is such a simplification of income tax though. For example a family of 4 making $50k/yr pays about $40 in federal income taxes. If that same family make $75k it goes up to about $2500. Both of those as a percentage of income are far below 15%. Hell, I made more than the SS max last year and my effective tax rate was below 15%. See Mike Pence as another example, guy made over $100k and had an effective rate of something like 12%.

Re: To Understand Rising Inequality, Consider Janitors

#300

Post by [deleted] » Sun, Sep 03, 2017, 7:46 PM UTC

microcolonel wrote: post #255

_delirium wrote: post #253

Earlier quoted context omitted.

Strong social safety nets of the Scandinavian variety do reduce post-transfer poverty (less so inequality), mostly by truncating the bottom of the income curve with a floor. You can get rid of poverty pretty much by definition if you have sufficient income transfers so that everyone's income is above the povery line. E.g. if your national poverty line is $13k, if you guarantee $13k incomes, no more poverty, at least…

> Strong social safety nets of the Scandinavian variety do reduce post-transfer poverty (less so inequality) Granted Scandinavian countries, now more just Norway and Denmark, tend to have very low potential for poverty in general. The rate would likely be comparatively low even without the programmes. Norway and Denmark have both considerably reduced entitlements over the years to relieve the enormous stress they put…

[deleted]