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

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

#141

Post by tracer4201 »

jogjayr wrote: post #109
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 c…

Working for someone, even at a FAANG, inherently also has risks. You don’t know the manager, the org, the team, etc when you first join. You have some ideas about the culture perhaps, but we take risks in our careers all the time.

The argument that one is riskier than the other and therefore entitled to lower tax rates doesn’t make sense to me.

Sure, investing in an asset might be riskier if you’re randomly throwing darts, but I thought these folks were all about personal responsibility.

To be clear, I work at a FAANG. My total comp was is near half a million, a significant chunk of which is equity. The only risk I take is not cashing out immediately and waiting a year for the long term capital gains tax. I don’t necessarily provide more output or value than someone like a teacher. The equity I sold this year was in the hundreds of thousands and I paid less taxes on it than what most teachers probably pay. It doesn’t make any sense, and this system in my opinion isn’t sustainable. The inequality is going to lead to conflict.

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

#142

Post by mistermann »

hailwren wrote: post #99
blunte wrote: post #83

Earlier quoted context omitted.

> disproportionate contributions Do you really argue that the people in the top 0.01% are contributing to society at a rate hundreds or thousands of times higher than the rest of the people? And in the case of heirs, such as the Walton family, are they contributing so vastly more than the guy who mows people's lawns during the day and cooks their dinners in a restaurant at night? Or how about the Renaissance folks. T…

Why should it be a linear relationship? If talent is normally distributed then supply should decrease exponentially. Assuming that a company can afford it, wouldn't this make a linear demand produce an exponential forcing on salary?

I think the main point of contention here is how everything is divvied up at the end of the day. What you are discussing (supply & demand, and the specific outcomes that occur) I think can be fairly described as the result of pure nature itself, whereas the article is also taking into consideration ~"society's opinion" on how the fruits of what people produce should be distributed.

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

#143

Post by mistermann »

stale2002 wrote: post #127
blunte wrote: post #83

Earlier quoted context omitted.

> disproportionate contributions Do you really argue that the people in the top 0.01% are contributing to society at a rate hundreds or thousands of times higher than the rest of the people? And in the case of heirs, such as the Walton family, are they contributing so vastly more than the guy who mows people's lawns during the day and cooks their dinners in a restaurant at night? Or how about the Renaissance folks. T…

> Do you really argue that the people in the top 0.01% are contributing to society at a rate hundreds or thousands of times higher than the rest of the people? Yes. That is because of of the impact of their actions. Let's take the example of a CEO of a major company. The difference between a good CEO, and a great CEO might only change the value of a company by 1%. But 1% of a 100 billion dollar company, is 1 billion…

> Yes. That is because of of the impact of their actions.

If you consider a measurement of their financial compensation to be proportional to their contribution to society. In reality, the actual impact of their actions is unknown - such things are beyond our ability to measure, we can only speculate.

> therefore this value needs to be incentivized

Technically, it doesn't need to be incentivized. Life would carry on if it wasn't, perhaps even with a better outcome. It is not possible to know what the outcome would be.

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

#144

Post by 6gvONxR4sf7o »

lostdog wrote: post #133
6gvONxR4sf7o wrote: post #128

Earlier quoted context omitted.

>Oh wait, let's talk nurses and schoolteachers. They pretty clearly contribute very heavily to society, and they get paid pretty poorly. Are they really contributing less, by factors of tens or hundreds, than Larry Ellison? I've been thinking about this lately. A schoolteacher generates huge value for dozens of people per year. A CEO of a big firm may generate tiny value for millions or billions of people per year. I…

You are giving the CEO credit for everything positive that the company does. Shouldn't some of the credit go to the workers? Not to mention, many companies are a net negative to society.

No I'm not giving the CEO credit for everything positive that the company does. I said the CEO may generate tiny value for millions or billions of people.

As a thought experiment, imagine a CEO of company making $5B/year of nebulous undefined "value" with 250M customers (roughly Spotify-ish?). That company's "value" per customer is about $20/year. Compared to a teacher, I think this company's impact per "customer" rounds basically to zero. Suppose the CEO is able to raise that "value" by 0.14%. Compared to the workers, it's still basically zero. Being less than three cents per customer per year, it's truly absurd compared to any teacher's impact per student per year. But it increases the company's $5B/yr by about $7M/yr.

This is a CEO who creates (relatively speaking) practically none of the value of the firm, which in turn creates (relatively speaking) practically no value per customer, and yet because they just have so many customers the CEO has created $7M/year of value in this thought experiment. That's the average 0.01% household income.

Small value over many people just seems to have more range than large value over few people.

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

#145

Post by jlokier »

geofft wrote: post #87
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…

So get rid of indefinite compound interest. Generational wealth has always struck me as fundamentally unjust, for the basic reason that you don't get to pick your parents. I see the argument that a man is entitled to the sweat of his brow; we can debate just how to define what is his sweat vs. infrastructural sweat, but the underlying point seems fair enough. I do not see the argument that a man is entitled to the sw…

> I do not see the argument that a man is entitled to the sweat of his father's brow.

I expect most people would agree.

However, views change drastically when you turn it around.

A great many people feel entitled to use the sweat of their own brow to provide for their own children. This includes providing an inheritance, especially a house.

Few people are happy to provide from their own work equally for everyone's children without any special benefit to their own.

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

#146

Post by Applejinx »

known wrote: post #54

Appropriate Inheritance tax can cure it;

Surprisingly tiny Wealth Tax is even more effective at curing it. The part that's interesting is not where it's transferred from one entity to another, it's the extremity of the phenomenon in the first place.

The distributions we currently see have no excuse or purpose. It's fine talking about the value of exceptional individuals, but if a Jeff Bezos is even ten thousand times better than your average schmoe, never mind 'millions of times better', then he would be able to have his influence without the aggregated power given him through accumulation of capital.

Never mind whether his dumb kid deserves to have the accumulated power of entire countries abstracted into the form of capital: HE himself has no business possessing that kind of power on top of his functional exceptionalness. He can damned well fend for himself, and will likely still be a big winner and have all he could wish. He has no right to the accumulated power our system awards him, on top of what he can do with his own intelligence and efforts. It's a magnifying effect, fully exploited by just the sort of person Bezos is.

Concerns of inheritance only highlight the problem. The parent is not that much superior to the dumb kid, and humans do not merit so much importance (as 'exceptional individuals') as our system claims they do. The BEST you can hope for is a crazy person like Elon Musk, aiming for some quixotic goal while they blunder around causing damage… and that's a best case scenario.

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

#147

Post by lucaspm98 »

hannasanarion wrote: post #70
lucaspm98 wrote: post #66

Earlier quoted context omitted.

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?

So your ownership of a company should be taken away if you don't actively manage it? Would you advocate against me being able to own my 10 shares of Microsoft stock and profiting from the hard work of the engineers? People of all levels of wealth offer their capital to companies in exchange for some return on their investment. Bill Gates provided disproportionate value to the economy and was rewarded as such. He then has large amounts of capital to invest in companies that need it, which he is compensated for. I don't understand what's wrong with this. Bill Gates is one of the best examples of the 0.01% benefiting society.

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

#148

Post by [deleted] »

stale2002 wrote: post #129
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.

The difference between a good and a bad CEO might only change the value of a company by 1%. But it turns out that 1% of 100 billion dollars, is 1 billion dollars. The reason why CEOs get paid so much is not because of how hard they work, it is because the effect of their actions is massive, and eaking out that extra 1% is worth it.

[deleted]

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

#149

Post by lucaspm98 »

fnord77 wrote: post #92

being ultra-wealthy gives a person tremendous amounts of political power. the ultra-wealthy are literally an unelected shadow ruling class.

There is definitely some truth in this. However, what would you proposed to either prevent people from becoming ultra-wealthy or prevent them from having political power?

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

#150

Post by lucaspm98 »

hannasanarion wrote: post #62
algaeontoast wrote: post #51

Earlier quoted context omitted.

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?

Well didn't he have his money invested in Microsoft, providing them the capital to grow significantly in those 15 years? That's providing a lot of value in my opinion.
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