Never mind the 1 percent Let's talk about the 0.01 percent (2017) • Hacker News Board

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#61

Post by sharpneli » Sat, Nov 30, 2019, 4:45 PM UTC

hannasanarion wrote: post #42

sharpneli wrote: post #33

Earlier quoted context omitted.

It actually does come about ”naturally”. You just need compound interest and bit of randomness. See https://journals.plos.org/plosone/article?id=10.1371/journal... This does not mean it’s good. The source even presents some methods of avoiding it. But the key point is that it doesn’t need some sort of conspiracy of the rich to happen. It will happen inevitably without being anyones fault if steps are not taken to add…

What you also need is self-multiplying investments and a lack of wealth, income, and capital gains taxes. The current financial system didn't happen by accident. It was intentionally built in the 1980s by the Reagan administration, at the behest of rich Republican donors. It was not inevitable, it was engineered.

It will just slow it a bit. A non progressive capital gains tax even at 99.999% will still lead to power law distribution. And I don’t think anyone would say a tax that high is exactly done at behest of the rich. (EDIT: compound interest literally is self multiplying investment)

One has to rather specifically design a progressive taxation system to avoid a power law.

Read the paper. The conditions for power law are very simple.

I live in Finland. A place one hardly can say is friendly to the rich. Yet we too have a power law, just with different constants than what US has.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#62

Post by hannasanarion » Sat, Nov 30, 2019, 4:45 PM UTC

algaeontoast wrote: post #51

hannasanarion wrote: post #35

Earlier quoted context omitted.

Proven when? Proven how? You think that the ultra-rich don't have an "us-vs-them" mentality? You think that they aren't lobbying and fighting and advertising and campaigning to keep their unearned wealth and power for themselves?

I’m not super rich but I wouldn’t call their wealth “unearned”. Why are you privy to their money? The rich have an us vs them mentality because the media demonizes them for working hard. I dislike rich people as much as anyone but the productive response isn’t rage. Rage gives the rich even more power and reason to look for more reasons to hide their wealth and exploit. If you’re so convinced the rich have “harmed” y…

Bill Gates hasn't worked in 15 years, but his wealth has more than doubled.

He has literally sat around doing nothing, occasionally traveling to Africa to boost his PR, and got more money than the median American could make in a million years. How did he "earn" that?

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#63

Post by Mountain_Skies » Sat, Nov 30, 2019, 4:46 PM UTC

algaeontoast wrote: post #25

dijit wrote: post #9

Wasn’t that always the case. Nobody cares about the guy earning 250k/y. It’s the handful of people who control 90% of all wealth. “1%” was a catchy soundbite but it was always the 0.0001%

Yeah, I really don’t understand why the bracket of “extreme wealth” is $250k? I’d be all for adding some bracket for earners over $1MM or over a certain amount of capital gains tax. However, a lot of people rely on capital gains for their retirement, so a tax on that money would negatively affect anyone who puts money in the stock market for retirement... Taxing the super rich is a great idea, but at the end of the d…

Unfortunately there is little agreement on which programs aren't working or aren't needed.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#64

Post by wyldfire » Sat, Nov 30, 2019, 4:46 PM UTC

Ma8ee wrote: post #38

refurb wrote: post #28

I’d love to see an analysis of who the top 0.01% are, in terms of income. My guess is the people who make the list this year, drop off the next and never end up on it again. The top people (again income) are the folks that sell their company or equity stake. It’s a huge windfall, but they never make that much again.

My guess is the opposite. The top people are the owners of very large, very often inherited, fortunes. Few people leave that group and few people enter it.

> very large, very often inherited, fortunes

The article addresses inherited wealth:

> On the 2016 rich list, two-thirds were self-made and one-third had inherited at least part of their fortune. More than 10 percent were immigrants to the US.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#65

Post by rklaehn » Sat, Nov 30, 2019, 4:47 PM UTC

richardwhiuk wrote: post #10

Enginerrrd wrote: post #7

Earlier quoted context omitted.

What is the point exactly? No policy is going to change the fact that the natural equilibrium for such systems is a Pareto distribution, AKA it follows a power law. We can definitely hope to change the constants of the distribution, but to fundamentally change such a distribution would really be a fool's errand.

Is there any theoretical reasoning for expecting a Pareto distribution to result? Would a distribution closer to normal not be equally valid?

Write a simulation where you have n entities with an equal amount of resources. Now choose two entities at random and let them "trade", where the outcome is random but fair. You will get a "wealth distribution" that is not a gaussian normal around the average but more like a poisson distribution. And this is even with no difference in competence of the market participants.

You can add various corrective terms to make get "equality of outcome", but to get to a gaussian distribution around the average you need really drastic/totalitarian measures.

The best system from a pure math POV would be a flat tax combined with universal basic income. But unfortunately it is naive to assume that this is politically viable.

Politics largely is selling a particular group an advantage over the general population in exchange for votes. And a flat tax / basic income system is just too simple for that.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#66

Post by lucaspm98 » Sat, Nov 30, 2019, 4:47 PM UTC

hannasanarion wrote: post #31

hacker_9 wrote: post #8

If you provide a service people want/need, you are going to end up with more money.. It's not rocket science. This is how the capitalist cogs turn.

What "Service" does Bill Gates provide? He hasn't worked in 15 years, but his net worth has more than doubled.

Is that a serious question? Bill Gates provided a very valuable service that runs most personal computers to this day along with productivity tools that have improved almost every business in the world. He also built one of the largest companies in the world that now employs over 100 thousand people. If there is anyone who should be disproportionately rewarded it would be Bill Gates. He now has a large fortune, which after paying the highest tax rates possible he can invest in other companies further adding to the economy or give away to improve the world altruistically.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#67

Post by rapind » Sat, Nov 30, 2019, 4:48 PM UTC

airstrike wrote: post #53

rapind wrote: post #44

Earlier quoted context omitted.

The real issue should be the multiplier on CEO pay and boards. 300x or more is pretty obviously ridiculous. Hard work should be rewarding, but is anyone really working 300 times harder than the delivery guy? I could believe 10x I guess.

It's not about how hard you work, but how hard it is to find someone else to do that job. Anyone can deliver packages.

You're just describing our psuedo free market society. Why stop there? It's who you know, it's luck, it's timing, it's who you're paying off, it's who you're lobbying, it's how much money you already have, etc.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#68

Post by annoyingnoob » Sat, Nov 30, 2019, 4:48 PM UTC

nnnmnten wrote: post #45

Here in Denmark the highest tax bracket applies to almost 10% of the Danish population. The Top 1%, Top 0.01% and billionaires are not taxed more than the Top 10%. I belong to the Top 10% and I'm fine with that. Why do Americans focus so much on the "ultra-rich" and the billionaires when you can build a successful welfare state by just taxing the Top 10% a little more?

Its because those that control the majority of the money also control the majority of the power. Us plebs don't have the power to fix the tax code. The US tax code is a mess and its very unbalanced, where the folks in the upper middle pay all of the taxes with the outliers on either side paying very little (on a percentage basis).

I know a few folks in the top percentiles that feel like they pay the same number of dollars or more than everyone else - they see this as fair. They seem to miss the fact that they get to keep a larger percentage of their money every year. If you get to keep more of your money every year than everyone else then its easier to build your wealth at the expense of everyone else.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#69

Post by bradleyjg » Sat, Nov 30, 2019, 4:49 PM UTC

The purpose of these exercises is always to push the perceived issue on to some other. So if you are union tradesman in NYC pulling down $90k/year you don't want to hear about the top quintile, you'd rather talk about the top 5%. If you are software engineer making $250k you don't want to talk about the top 5% but instead point to the 1%. If you are a specialist physician making $600k/year (or the subsidized journalist child of specialist physician) then it's not really about the 1% but instead about the .1%.

And so forth and so on. This is far more about resentments and insecurities than policy.

The fact of the matter is if you want to re-adjust the economic landscape towards the poor in a meaningful way it is going to realistically require harming the economic interest of all the current winners -- from the $90k/year tradesman all the way up to Jeff Bezos. In all likelihood it will probably also mean higher prices for goods and services as well as higher unemployment. Maybe those trade-offs are totally worth it, but we should be adults about these things and not pretend there's some magic policy that's going to make everything great for everyone except some tiny cabal of not-us that's probably evil anyway.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#70

Post by hannasanarion » Sat, Nov 30, 2019, 4:50 PM UTC

lucaspm98 wrote: post #66

hannasanarion wrote: post #31

Earlier quoted context omitted.

What "Service" does Bill Gates provide? He hasn't worked in 15 years, but his net worth has more than doubled.

Is that a serious question? Bill Gates provided a very valuable service that runs most personal computers to this day along with productivity tools that have improved almost every business in the world. He also built one of the largest companies in the world that now employs over 100 thousand people. If there is anyone who should be disproportionately rewarded it would be Bill Gates. He now has a large fortune, which…

Yeah, and he stopped doing all that in 2004. Why does he deserve the profits from the hard work done by thousands of engineers to make Vista, 7, 8, and 10, which he had absolutely nothing to do with?