Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

To Understand Rising Inequality, Consider Janitors

nytimes.com

Post reply on HN
Print view View original

341–350 of 694 posts

Re: To Understand Rising Inequality, Consider Janitors

#341

Post by esarbe »

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".

This is a very interesting analogy. Because I've learned in ecology that from time to time a forest needs a good fire to allow for new growth.

Re: To Understand Rising Inequality, Consider Janitors

#342

Post by jaggederest »

solidsnack9000 wrote: post #325
esarbe wrote: post #321

What strikes me the most when looking at many of the comments here is the blatant disregard for human suffering that extreme inequality and the resulting poverty cause. The current economical status quo is accepted as a given and all the harm it causes is dismissed with the shrug of a shoulder. "It can't be helped, the poor sods should have made better life choices to avoid ending up as janitor" is the attitude by wh…

As long as we accept the need for people to be janitors, we must accept that becoming a janitor is not a "mistake", it's a useful thing that we all want to see happen for some people. We can't on the one hand say, that we need people to do this job and on the other hand say, "tough luck" to those that do it.

Doing janitorial work is not a mistake, but being a janitor for 40 years certainly is.

It's not the core job, it's the fact that there's zero growth or mobility even possible that is the issue.

Re: To Understand Rising Inequality, Consider Janitors

#343

Post by ericd »

mathiasben wrote: post #183
WalterBright wrote: post #160

Earlier quoted context omitted.

I'm curious where you think their money is.

invested in siloed low risk fixed income vehicles ensuring that the funds don't circulate through the broader economy.

Low risk fixed income doesn't currently keep up with inflation.

Re: To Understand Rising Inequality, Consider Janitors

#344

Post by TimPC »

jordanb wrote: post #334
TimPC wrote: post #327

Earlier quoted context omitted.

Taxing wealth is a deeply invasive bureaucratic nightmare. Having individuals be legally required to produce a balance sheet of all their assets for the government every year seems quite problematic. This would get into issues of having people be required to re-establish the fair price of all their collectables, etc. It's also a deeply dangerous attack on retirement. Instead of being taxed on the gains from your weal…

This is basically the point of the estate tax: people are already producing a balance sheet of all the wealth for the purpose of distrusting it to the heirs. So tax the wealth when the estate changes hands and all the accounting is going to be done anyway.

Not once per year. The ongoing balance sheet is highly problematic. Any assets that don't need to be updated would represent giant loopholes and potentially areas where bubbles would be inflated as capital moves into assets that grow whose growth isn't adequately accounted for.

Re: To Understand Rising Inequality, Consider Janitors

#345

Post by aoeuasdf1 »

eli_gottlieb wrote: post #285
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%?

Why should people be incentivized to take home more than 400k/year? Why not reinvest that money in the business and have the executives take home only $150k/year?

Suppose you have two options:

- Work for MEGACORP and produce $400k/year of value

- Develop a new business which has a 30% chance of succeeding. If it succeeds, you estimate it will be worth $50M.

Suppose the marginal tax rate for income above $400k/year is 40%, and you want to maximize your expected earnings (say, to donate to a charity you think is particularly effective). Which option is rational?

Now suppose the marginal tax rate for income above $400k/year is 100%. Now no matter how high we change that $50M number to be, it's always better to just work for $MEGACORP, because you get a guaranteed paycheck.

This is known as a distortion, and is the true cost of taxes. I personally don't care too much where the wealth people creates goes, and I'd like to see less income inequality - but let's not kill the golden goose while we're at it. There are far less distortionary taxes than extremely high income tax rates.

Re: To Understand Rising Inequality, Consider Janitors

#346

Post by [deleted] »

esarbe wrote: post #341
conanbatt wrote: post #200

Earlier quoted context omitted.

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

This is a very interesting analogy. Because I've learned in ecology that from time to time a forest needs a good fire to allow for new growth.

[deleted]

Re: To Understand Rising Inequality, Consider Janitors

#347

Post by deepnotderp »

scarface74 wrote: post #64
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…

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

See, people aren't advocating such high taxes on people making 400K a year, they're advocating it for people making 4 million+ a year.

This is a major misconception I see on both sides of the argument, (but definitely more of an issue on the "rah rah Laissez-faire crowd") the worry isn't really about the "1%" who are doctors and engineers who make ~$250K/year after working hard, the worry is really the people who make 20 million dollars a year with nowhere near a proportional value add.

Re: To Understand Rising Inequality, Consider Janitors

#348

Post by vadym909 »

stale2002 wrote: post #275
vadym909 wrote: post #96

Earlier quoted context omitted.

The regulations already exist. Companies aren't allowed to classify contractors if they do work similar to a fulltime employee or what would be considered full-time work. Like work long term at the company site. The outsourcing happens by finding and taking advantage of loopholes with contracts, firing contractors after 18 months and betting the costs to settle a lawsuit is cheaper than paying benefits to 10s of thou…

Sure, you can't hire somebody as a contractor to do full time work, but you can absolutely hire a different firm to do the work. Those workers should be full time workers for the cleaning firm, but it doesn't mean that they are full time workers for Apple.

That is the loophole. Technically, it is possible to hire an outsourced firm to do the work if it is 100% turnkey outsourced and done outside of Apple. You often see this type of outsourcing happen with legal and creative type work.

However, more often, the contractors are onsite and doing exactly what other Apple employees do and are managed by fulltime employees of Apple. In this case the law says those contractors should have been classified as employees of Apple not the contracting firm, even if their employment contract says otherwise. see Vizcaino v. Microsoft Corp

Re: To Understand Rising Inequality, Consider Janitors

#349

Post by pcrh »

conanbatt wrote: post #331
pcrh wrote: post #296

Earlier quoted context omitted.

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.

Is paying for your kids education inheritance? Are pre-paid company contracts for a lifetime inheritance? etc etc. There are some definite difficulties in implementation. But even then, my argument is that it could be a really harmful tax if it could be applied at all.

The evidence is that allowing large inheritances is harmful to society at large. It allows for an accumulation of economic influence within too few hands, and the creation of an entrenched elite. The "Founding Fathers" of the US were particularly opposed to it for this reason.

One would have to balance the "harm" caused to the children of wealthy people for not inheriting wealth (mostly when they are around 50-60 yr old themselves), with the harm caused to society at large.

Re: To Understand Rising Inequality, Consider Janitors

#350

Post by ericd »

Buttons840 wrote: post #225
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%?

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.

The marginal utility of money decreases drastically as you climb, so someone who is already making 400k obviously isn't going to do double the work to make an additional $40k.
Post reply on HN