Love when threads like these dissolve into "How can we further overcomplicate tax law to benefit to ultimately benefit the government"
To Understand Rising Inequality, Consider Janitors
381–390 of 694 posts
Re: To Understand Rising Inequality, Consider Janitors
#382We 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…
Wealth, or more generally, rent-producing assets:
https://www.vanityfair.com/news/2017/09/the-obscure-economis...
Re: To Understand Rising Inequality, Consider Janitors
#383Earlier quoted context omitted.
The argument against income tax is that it penalizes earners, and rewards not working. Sure, that is a reductionist argument but so was yours. The real argument against taxing wealth is that it isn't really feasible; you'd just encourage banking in other countries or buying up a lot of land. I also agree that capital gains being taxed at a lower rate is insane and makes sense only when you realize that's how politici…
Assuming wealth is earned, why would you want to tax it? It already was taxed when the individual was working. Inherited wealth is another matter.
Check your assuption.
Re: To Understand Rising Inequality, Consider Janitors
#384Earlier quoted context omitted.
Wealth tax is a good idea that’s very hard to implement effectively. Many countries have tried it only to give up on it (Germany, Sweden). France has a comprehensive wealth tax but it raises less than 2% of total tax reciepts, suggesting it’s not doing much. It’s very difficult to prevent the wealthy from finding ways to hide wealth.
This is part of the reason some want to tax consumption more aggressively. "Wealth" that isn't used is really just a collection of expensive large numbers. Sooner or later, when that wealth is used, it can be taxed as consumption and/or real property.
Except it doesn't work that way because cost basis gets reset during inheritance which is a huge give away to the most wealthy families. It is also the reason for an Estate Tax.
Re: To Understand Rising Inequality, Consider Janitors
#385Earlier quoted context omitted.
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.
Two arguments against a death tax: the inability to apply it, and the results of an effective one: In Argentina, the state collects a heft tax on property transfers when the propietor dies. So basically all property is donated from parents to children in-life. Poorer property owners that cant afford or dont know better, or people stricken with tragedy in an early death are likely the ones that pay the most of that ta…
Actually forcing people to spend their money before death would be really good for the economy (despite you picking illegal activities for the negative connotation.)
And the real solution isn't a 100% tax but 100% tax over some lower amount, say $50,000 along with lowering the yearly gift tax exemption.
Inherited wealth is anathema to meritocracies.
Re: To Understand Rising Inequality, Consider Janitors
#386Earlier quoted context omitted.
The reason for inequality is that people are not equal. The work they do produce is not equal in value. More people can do a janitor's job, and/or do without a janitor, so the value of a janitor's work is less. More supply, elastic demand, means lower price point. Through technology, some people are able to produce much more than others, so inequality is inevitable unless there is a balancing force (aka taxation).
Indeed, the value of keeping toilets sanitary is far greater than that of creating the next web app. "This work is essential to the health of the population, but because of something to do with marginal economics and supply and demand and weak labor laws and class power and reserve supply of labor, I don't have to pay a proper wage, or even treat them like human beings!"
Diamonds are also more expensive than water. But of course water is more valuable than diamonds.
Price is not about total value provided to society but about the marginal value of one more diamond, 1 more gallon of water, 1 more janitor or 1 more programmer.
Re: To Understand Rising Inequality, Consider Janitors
#387Gail Evans worked as a janitor at Kodak in the 1980s. "She received more than four weeks of paid vacation per year, reimbursement of some tuition costs to go to college part time, and a bonus payment every March... A manager learned that Ms. Evans was taking computer classes while she was working as a janitor and asked her to teach some other employees how to use spreadsheet software to track inventory... Less than a…
This is why it's so upsetting that companies in Silicon Valley (Google, Facebook, Apple, all of them) hire cooks/janitors/bus drivers/etc from 3rd party companies and offer them none of the benefits their full employees get. Just doing that would be a huge pipeline, and would play no small part in addressing the diversity problem they all claim to be preoccupied with (but don't do much about).
I am not a lawyer, but it's my understanding that companies need to treat contractors substantially different from full time employees or get in trouble for basically having full time employees that they don't pay employment taxes on.
So the choice is more like:
* keep cafeteria workers on the payroll
* hire a specialized company to run the cafeteria
...the middle ground would be to require all vendors provide minimum benefits of some sort (vacation, sick days, etc.). But that wouldn't make it feasible to offer a temp event worker a data maintenance role. That would basically be poaching another company's worker.
Re: To Understand Rising Inequality, Consider Janitors
#388A number of the ideas in this thread are a little crazy. I wonder what is the economic potential of a tax that is vested over the people who propose it and their families. For example, it would be like "if you propose taxing wealth at 80%, the government goes into your house and your family's houses to take 80% of your wealth as a 5 year experiment."
"Oh you live in a 300k dollar house? Confiscated! We are moving you to a tiny house valued at 60k with all others who think like you"
I wonder if that would help folks come up with more sensical solutions. We could vote on the ideas, and the winners get the ideas implemented on themselves first!
Re: To Understand Rising Inequality, Consider Janitors
#389Earlier quoted context omitted.
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.
With the assumption that the State is the best ward for your money. Do you fully trust the State to be willing and able to stamp out inequality?
Why must we 'fully' trust the state? We just have to trust it more than the markets.
Re: To Understand Rising Inequality, Consider Janitors
#390This story reminded me of something I've often wanted to know when people start talking about economic inequality metrics, namely, how many of those in poverty when entering the workforce will remain in poverty their whole life? To me the longitudinal information here is the most significant metric i.e. what does wealth movement look like for individuals over their lifetime. Virtually everyone in their teens and earl…
I've heard from smarter people than me that your parents' level of economic attainment is the best predictor of your economic attainment. Everyone may be broke in their twenties, but some of those 20 somethings presumably got a leg up from being in a good (pre, elementary, secondary, post-secondary) school and can ask mom and pop for help on the down payment for a home, etc. Suspect that's still the case, though the…
> your parents' level of economic attainment is the best predictor of your economic attainment
I've read that marital status of you biological parents and the marital statuses of the parents in your neighborhood are also great predictors.