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To Understand Rising Inequality, Consider Janitors

nytimes.com

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Re: To Understand Rising Inequality, Consider Janitors

#471

Post by ams6110 »

mathiasben wrote: post #135
coredog64 wrote: post #128

Earlier quoted context omitted.

And, due to deductions, literally no one paid that rate. Realized tax rate was lower, combined with a bunch of dead weight losses as people optimized for tax avoidance.

yes, very few paid the top rate. but that's the point, the excess income was being thrust back into the economy, driving innovation and creating jobs not just languishing in someone's bank account.

> languishing in someone's bank account

Money in bank accounts is loaned to others and "thrust back" into the economy.

Money in other investments (stocks, bonds) also funds economic activity.

Your argument only makes sense if the wealthy are hoarding cash under their mattresses, which is not what they do.

Re: To Understand Rising Inequality, Consider Janitors

#472

Post by sokoloff »

whack wrote: post #305
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…

The real problem though isn't wealth inequality, it's income inequality. If someone has a billion dollars that's invested in various stocks, and never tries to withdraw that money, leave him alone. The day he decides to sell his investments and start buying private jets, that's the time to tax him on his income. The argument against a wealth tax, is that it penalizes savers, and rewards spenders. Which is not what we…

> The real problem though isn't wealth inequality, it's income inequality.

I disagree. Wealth provides financial security to an even greater degree than high current income. Wealth provides the means to move your family to a place where they will be safe and thrive. Wealth provides a means to start the next generation with a leg up, financially, socially, and academically. High current income can go away next year for most people and is often not portable to a new city or country. High current wealth is far more durable.

I don't think it's the billionaires that are the only "problem". Those with 50+ million USD also live a life essentially devoid of the concerns of financial catastrophe.

I see an incredible amount of logistical challenges in implementing an annual wealth tax (though some countries already do so), but far fewer philosophical problems, even though I am overwhelmingly likely to be one of those targeted by a wealth tax (low single digit millionaire household from 25 years of working, saving, and investing).

I think it good social policy to institute an additional amount of drag on wealth accumulation, preferably by directly taxing it (annually or upon transfer), rather than further penalizing productive income-generating activities that are already taxed at nearly 50%.

Re: To Understand Rising Inequality, Consider Janitors

#473

Post by banned1 »

0xbear wrote: post #464
Nomentatus wrote: post #448

Earlier quoted context omitted.

Sometimes the exact opposite of a profound error is also a profound error. We certainly have established that socialism can be implemented in a catastrophic fashion; it's harder to prove a negative (that nothing resembling socialism can work.) I share your skepticism, though.

There are always theoreticians who don't really know what they're talking about, but do offer their utterly worthless advice. I'm not talking about you, or anybody else on this thread in particular. Without sufficient pushback, sooner or later these people screw things up for everybody, including themselves, and the poor are hit the hardest by the fallout 100% of the time. When it becomes obvious that they screwed th…

There is no point in trying to convince the masses of liberally-inspired, rich privileged people who have never had the courage to face and understand the arguments of the other side, or the masses of liberally-inspired poor people who rather than work to improve themselves see themselves as victims and see the others as the source of the solution to their problems.

Here is an interesting point:

http://stuartschneiderman.blogspot.com/2016/11/the-problem-w...

Re: To Understand Rising Inequality, Consider Janitors

#474

Post by jessaustin »

fapjacks wrote: post #301
tchaffee wrote: post #189

Earlier quoted context omitted.

Universal healthcare helped get me over there and it's one of the reasons I'll settle down there. I think all the socialized services are great. Excellent value for the taxes you pay.

Yes! This is another huge misconception about raising taxes: The American government is massively wasteful in spending! We get so little value for the taxes we pay! People don't want to contribute even more money to the wasteful spending, which I can totally understand, but it doesn't have to be that way! In Sweden for example, you get tremendous value for the taxes you pay. The tax rate is higher, but you really do…

If it could be guaranteed that a particular program would be administered by Swedes, I'd be more likely to support it...

Re: To Understand Rising Inequality, Consider Janitors

#475

Post by jedharris »

aoeusnth1 wrote: post #457
point78 wrote: post #433

Earlier quoted context omitted.

And their wealth was distributed evenly? Hell yeah the poor would have it better, is this a trick question?

No, the hypothetical was if the wealthiest disappeared, along with all their wealth.

What could this mean? For example if some rich person had a few billion in T-bills or Apple stock, when they disappeared what would happen to those? If that ownership just vaporized, the national debt or Apple's shares outstanding would fall. In effect US Citizens or Apple shareholders would be wealthier.

The only other option I can see is that some tiny percentage of the country or of Apple would disappear. But what part, specifically?

This comment to me is characteristic of thinking of ownership in far too simplistic terms. Very rich people don't actually own productive things, they just own rights to income streams.

There are certain exceptions, such as the Koch brothers who do own their companies. If those companies disappeared that would also be a net benefit to US citizens.

Re: To Understand Rising Inequality, Consider Janitors

#476

Post by ams6110 »

lancewiggs wrote: post #423
chrisco255 wrote: post #241

Earlier quoted context omitted.

So you can sell PayPal one day for $200 million and have the capital to build a space ship company and the first viable fully electric car manufacturer.

Sadly Musk is an outlier. Very few entrepreneurs have had his impact on the world.

Anyone with his wealth is by definition an outlier.

Re: To Understand Rising Inequality, Consider Janitors

#477

Post by conanbatt »

dredmorbius wrote: post #415
conanbatt wrote: post #331

Earlier quoted context omitted.

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.

Why should education be privately financed? Why should there be a need to privately pay for your children's basic (or university) education?

There isn't a need, there is a desire.

Re: To Understand Rising Inequality, Consider Janitors

#478

Post by ams6110 »

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?

The people who build houses, boats, and cars might be pretty happy about it.

Re: To Understand Rising Inequality, Consider Janitors

#479

Post by hsitz »

erentz wrote: post #318
Turing_Machine wrote: post #306

Earlier quoted context omitted.

Hmm... wouldn't that just result in people transferring the assets to their heirs before they died?

Could do. That might be captured sufficiently by the gift tax though. A bigger issue could be evasion through establishing trusts and the like.

The U.S. has a "unified" gift and inheritance tax. If you give away $5M while you're alive and die with an estate of $5M you (1) pay no tax on gifts while alive, and (2) your estate pays tax based on an estate size of $10M at the time of your death. There are a few wrinkles (e.g., (1) annual per-person exempt gifts of $14k/person, and (2) you do start paying tax on gifts while you're alive once total gifts pass a certain value), and gifting during lifetime has some advantages (e.g., getting growing assets out of your estate while they have a lower value), but that's generally the way it works. Gift tax and inheritance tax operate on a "unified" basis.

Re: To Understand Rising Inequality, Consider Janitors

#480

Post by 0xbear »

banned1 wrote: post #473
0xbear wrote: post #464

Earlier quoted context omitted.

There are always theoreticians who don't really know what they're talking about, but do offer their utterly worthless advice. I'm not talking about you, or anybody else on this thread in particular. Without sufficient pushback, sooner or later these people screw things up for everybody, including themselves, and the poor are hit the hardest by the fallout 100% of the time. When it becomes obvious that they screwed th…

There is no point in trying to convince the masses of liberally-inspired, rich privileged people who have never had the courage to face and understand the arguments of the other side, or the masses of liberally-inspired poor people who rather than work to improve themselves see themselves as victims and see the others as the source of the solution to their problems. Here is an interesting point: http://stuartschneide…

Ironically, the lack of ability to blame someone else for one's misfortune was the only good thing about USSR style socialism. When everyone is poor, you can't blame the rich for anything.
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