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)

#101

Post by appleiigs » Sat, Nov 30, 2019, 5:26 PM UTC

hailwren wrote: post #95

georgeburdell wrote: post #88

As the article notes, an increasingly common path to the 1% is through skilled labor. I think this type of earner would have more in common with a 50%er than a 0.1%er. My family has been in the 1% for a few years and we’re just bottom-rung individual contributors at FAANGs. 50% of our net worth is in our house. We don’t run or have stakes in any private businesses. No investment properties. The only thing that sets u…

I was skeptical, then I checked [1] and apparently even if you separate by state you only need a household income of $512k to be in the top 1%. High, but certainly not unfathomably so to HN readers. 1 - https://www.cnbc.com/2018/07/27/how-much-you-have-to-earn-to...

Important to note it's household income. If a family has 2 software devs at a FAANG (not the OP specifically), quite likely to get to 1% with work experience. If they are doing a european vacation, bathroom and a car one 1 year, definitely top 5%.

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

#102

Post by analog31 » Sat, Nov 30, 2019, 5:29 PM UTC

uoaei wrote: post #77

odiroot wrote: post #32

Earlier quoted context omitted.

Unfortunately that's not always the case. Living in Germany, I've heard and read (good example /de/ subreddit) loads of hate against middle and upper-middle class people. People who are nowhere near close to being rich. This is also a group that's being taxed as much as the actual rich, or in practice even more, because the rich can afford to "optimise" their taxes. There's a sizeable group of people that just cannot…

Lots of people "work hard", and almost none of them are rich. So obviously it's not "working hard" that gives you that money. At some point very early on, your money starts making money and you cease to do "work" to make that number grow. It seems inappropriate to equivocate capital gains with gainful employment.

Indeed, and for many of us, it's not just our money that makes money, but our education, which is largely a form of wealth passed from one generation to the next. I would be nowhere without the education that my parents paid for, out of the money that they made from their education.

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

#103

Post by tomaskafka » Sat, Nov 30, 2019, 5:29 PM UTC

rklaehn wrote: post #41

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%

On the contrary: you always target exactly "the guy earning 250k/y". Because people earning a lot of money but still earning through work are the easiest to target, since they can not just move somewhere else easily.

This. I'd love to see a histogram of tax revenue by income bracket.

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

#104

Post by patja » Sat, Nov 30, 2019, 5:31 PM UTC

allovernow wrote: post #36

>Smith, Yagan, Zidar, and Zwick find that the 1 percent’s income is being driven by owner-managers, mostly of small and medium-sized companies—specifically S corporations, partnerships, and limited liability companies. These are talented managers: the researchers find that profits of companies run by these 1 percent-ers are far higher than those of businesses owned by people in the top 5-–10 percent >“The demand for…

I agree that the aggregate standards and quality of life are much improved over 20, 40, or 60 years ago, but I don't share your satisfaction with the status quo. I would prefer we made some changes that enabled the poor to be housed and receive more than emergency room reactive access to health care. No man is an island, and a devotion to meritocracy can blind you to the reality that the accomplishments attributed to merit and hard work are often simply correlated to the ZIP code where you spent your childhood.

In a nation with as much wealth as we enjoy, it is shameful how we relegate our neighbors to defecating on sidewalks, living in tents with no heat or plumbing, and raving in the streets due to lack of mental health care.

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

#105

Post by jmpman » Sat, Nov 30, 2019, 5:34 PM UTC

swebs wrote: post #21

3fe9a03ccd14ca5 wrote: post #6

My issue with all of these discussions is that they invariably present ideas that are just too complicated, and our tax code is just too complicated as it is. Create a system that can be applied evenly, and fairly, from the top to the bottom and then I think you’ve got a great and novel idea.

The Fair Tax plan was a neat idea. Tax everyone at X percent, while giving everyone back Y dollars per month as a form of UBI. The values of X and Y are chosen so those below the poverty line gain more money than they are taxed. https://en.wikipedia.org/wiki/FairTax

Although these tax systems likely poll well, all tax systems are just transfer functions. Any tax system which results in significantly reduced taxes for the >1% raises my suspicions. If you couples this system with an inheritance tax of 100% for greater than $10M, I’m interested.

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

#106

Post by peteradio » Sat, Nov 30, 2019, 5:38 PM UTC

sharpneli wrote: post #61

hannasanarion wrote: post #42

Earlier quoted context omitted.

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 v…

Nobody cares that its a power law, its the particular constants that lead to the incredible disparity no?

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

#107

Post by patja » Sat, Nov 30, 2019, 5:39 PM UTC

Razengan wrote: post #98

Having a guaranteed basic income, free money, or whatever you want to call it, would assuage a lot of the resentment surrounding the perceptions of effort, luck, opportunity, merit, worth, earnings, taxes, parentage, connections etcetera that inevitably come up in these discussions, as they have on this post.

I also find this idea appealing. Reading the end of Gehttoside was an eye opener where the author describes how getting on SSDI (argued as being a limited form of basic income) for being unemployable (disabled) due to their history gang banging gave some former gangsters enough financial breathing room that they could break the cycle of relying on crime to get by. Sounds a little Polyanna-ish but it does have the ring of truth.

What are your thoughts on the counter-arguments that basic income will lead to a dystopian future where an underclass just sullenly gets by as dependents of the state. Plenty of scifi speculative descriptions of this future are a bit scary, but are they just scare-mongering?

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

#108

Post by jquery » Sat, Nov 30, 2019, 5:47 PM UTC

I’m not convinced that markets don’t work when high pay is involved. If this was true, there is a fortune to be made by creating a mutual fund that invests in companies that avoid superstar pay tiers. Does anyone know of such a fund? How is its performance?

I think we evolved the emotion of envy in a time when being rich meant hoarding. Markets break that evolutionary intuition.

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

#109

Post by jogjayr » Sat, Nov 30, 2019, 5:48 PM UTC

ghouse wrote: post #96

The tax code enables and reinforces outlier wealth using tired arguments like "encouraging investment" and "double taxation." United States centric observations: For example, charging lower tax rates on capital gains than ordinary income promotes a concentration of wealth to people with wealth. Suggesting this is purposeful policy for society to encourage investment is comical -- what else would wealthy people do wit…

> charging lower tax rates on capital gains than ordinary income

I don't have a problem with the idea. It recognizes that income derived from investments is riskier than income from a paycheck, and applies a discount.

The problem is with the execution. Why is the top rate for cap gains only 20% - even if you earn $10b, but 37% for a mere $510k in ordinary income? Surely there should be some amount of cap gains that can be taxed at 37%. Maybe it's $5m instead of $510k (to recognize the riskiness of the income stream) but it shouldn't cap out at 20%. Simply put, why aren't there more tax brackets for cap gains and other investment income?

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

#110

Post by zxcmx » Sat, Nov 30, 2019, 5:53 PM UTC

Enginerrrd wrote: post #37

conception wrote: post #14

Earlier quoted context omitted.

The point is that extreme wealth distributions push towards non-democratic societies. You like democracy, you like policies that promote it. Also, “you can never change how it is!” is a nirvana fallacy; you certainly can make things better. It’s been done before.

I'm fine with changing the alpha value, and finding an optimal alpha value is actually what we should be doing IMO. But we can't act like it's not gonna still be close to some type of power law distribution at the end of the day.

The wealth distributions we see have a mathematical flavour to them but are the result of a system created and governed by humans.

In fact vast disparities in wealth can only be created and sustained through significant social effort.

It takes an incredible degree of social co-ordination for multi billionaires to exist. Outside of a strong rule of law you have be to a strongman or warlord to keep your hands on all that stuff.

As a society we could choose to cap wealth. For example we could say "it's illegal for an individual to own more than a billion dollars worth of assets". The excess would effectively be tax.

I can immediately think of a huge number of problems with this (oh no, all the multi billionaires leave!, offshoring, transfers between family members, "schemes" in general) but it's obviously possible to pass this kind of law, were there the social will to do it.

It is not possible to amass huge assets without deep support from society at large. Police, judges, guards and the goodwill of the public are ensuring the safety of the billionaire's property.