Of the 1%, by the 1%, for the 1% • Hacker News Board

Re: Of the 1%, by the 1%, for the 1%

#61

Post by tesseract » Sun, Apr 03, 2011, 3:17 PM UTC

Mz wrote: post #49

ladon86 wrote: post #24

Earlier quoted context omitted.

Well it's definitely not cost of housing, which is very expensive here. For the most part you can expect to pay a lot more for a much smaller house in the UK compared to the US. I'm not sure where it is that we make up the difference in costs, or if indeed we do.

As a guess: Healthcare. My understanding is that it is largely covered by the government in the UK but consumes somewhere in the neighborhood of 20% of US incomes (figure remembered off the top of my head -- I really want to say about 22% but that implies more accuracy than I feel confident implying). So that one item alone should make a quite large impact on actual outcomes.

Does that take into account that in the US a lot of healthcare spending is done by employers and thus wouldn't even be included in incomes?

Re: Of the 1%, by the 1%, for the 1%

#62

Post by Mz » Sun, Apr 03, 2011, 4:47 PM UTC

hga wrote: post #56

Mz wrote: post #49

Earlier quoted context omitted.

As a guess: Healthcare. My understanding is that it is largely covered by the government in the UK but consumes somewhere in the neighborhood of 20% of US incomes (figure remembered off the top of my head -- I really want to say about 22% but that implies more accuracy than I feel confident implying). So that one item alone should make a quite large impact on actual outcomes.

But, assuming we've been talking about before tax incomes, the mechanism by which you pay for your health care doesn't matter for the purposes of this discussion, does it? I.e. the U.K. has higher individual tax rates in part to cover the NHS's expenses. That said, the U.K. spends a lot less as a percentage of GDP on health care, but then they have a substantially lower per capita GDP. ADDED: off the top of my head,…

That said, the U.K. spends a lot less as a percentage of GDP on health care, but then they have a substantially lower per capita GDP.

As someone who has a life-threatening medical condition (and also spends a lot of time talking to others with serious conditions), I will note that being unhealthy has a great many costs involved that go far beyond whatever is spent on doctors and drugs. The very high healthcare costs in the US are not merely a financial cost. They are an indicator of general poor health in the US: High levels of obesity, high blood pressure, heart disease, diabetes and on and on. People who are ill have less energy and mental focus for the tasks of day-to-day living and often spend more money on lower quality products, like eating microwave meals and fast food instead of cooking from scratch.

In fact, the degree to which my local grocery store is an utter madhouse right before American holidays that revolve around a big meal where extended family is typically invited suggests to me and others that I have spoken with that most Americans just don't much cook. I was a homemaker for 2 decades and the degree to which I shopped daily for fresh meats and produce and cooked for dinner what I had bought fresh earlier that afternoon drew frequent remarks from people who worked at the grocery store and who wished their wife would cook like I did. I have gotten myself a great deal healthier than doctors think is possible for my condition and dietary changes are a big part of how I accomplished that. It is well known that Europe has a food culture in a way that is unknown here in the US. I strongly suspect that the emphasis on eating well in Europe is linked both to having a high quality of life without a very high salary and to lower overall healthcare costs.

/soapbox

Re: Of the 1%, by the 1%, for the 1%

#63

Post by Mz » Sun, Apr 03, 2011, 4:52 PM UTC

tesseract wrote: post #61

Mz wrote: post #49

Earlier quoted context omitted.

As a guess: Healthcare. My understanding is that it is largely covered by the government in the UK but consumes somewhere in the neighborhood of 20% of US incomes (figure remembered off the top of my head -- I really want to say about 22% but that implies more accuracy than I feel confident implying). So that one item alone should make a quite large impact on actual outcomes.

Does that take into account that in the US a lot of healthcare spending is done by employers and thus wouldn't even be included in incomes?

If you are chronically ill, you are going to have "costs" beyond whatever such studies measure as 'healthcare costs'. I was unemployable for year and years until I finally got a proper diagnosis and began getting my condition under control. The single biggest cost savings I have experienced with getting well is that my food budget has shrunk dramatically. My ex was career military. I had very few out-of-pocket "medical" expenses (co-pays for doctor's visits or for prescription drugs). My health problems did enormous damage to our budget anyway. Anyone spending in the neighborhood of 20% of their income on medical care is not healthy. Please see my other reply if you really want to read more of my rant on the topic.

Peace.

Re: Of the 1%, by the 1%, for the 1%

#64

Post by gersh » Sun, Apr 03, 2011, 5:05 PM UTC

cagey wrote: post #41

hootmon wrote: post #26

Just consider this. Most tax money goes toward providing defense, Which is just a nice word for protecting the property of the wealthy. The more property you have, then the more value you receive, thus the more, not less, you should pay. Its called welfare for the rich. Our taxes go towards securing their position and goods. Say hello to that boot rushing down on you.

> Most tax money goes toward providing defense It seems like (FY2010) 20% of Federal expenditures go toward defense, and 58% go to entitlement programs (which (I speculate) the 1% wealthiest do NOT receive disproportionate benefit from). Source: http://globaleconomicanalysis.blogspot.com/2011/03/usa-incor... second graph

From that chart, it appears the problem is the healthcare industry is getting too much money. Medicare is expensive along with the tax deduction for health insurance. If we could get down healthcare costs, it would solve the problem.

Re: Of the 1%, by the 1%, for the 1%

#65

Post by pg » Sun, Apr 03, 2011, 5:42 PM UTC

drgolf wrote: post #13

pg wrote: post #3

This is written more like a speech by a politician than as an attempt at analysis. The type of economic inequality that successful startups yield, and which accounts for a lot of the entries in the Forbes 400, is described merely as a theory cherished by the rich, and dismissed with evidence it would be a compliment to call anecdotal. And while there's a lot of talk about how the rich own the government, he doesn't e…

It lacks in analysis because it's an opinion piece for a general audience, hence the use of anecdotes. Its not an academic article. No offense, but your articles often use anecdotes to make a point. For example, you write: "As anyone who has worked for the government knows, the important thing is not to make the right choices, but to make choices that can be justified later if they fail." What evidence do you have of…

I'm not complaining about the fact that this is, like my essays, in the form of an essay rather than an academic paper. I'm saying that it's a piece of advocacy rather than an attempt to figure out the truth.

That's an important distinction. In advocacy, you start already knowing the conclusion you want to reach, and you try as hard as you can to convince the audience of it, the way a lawyer or a politician would. Whereas an essay, as the name implies, starts with a question, and from there you try to follow the truth wherever it leads.

I wrote about this in "The Age of the Essay" (http://paulgraham.com/essay.html).

There is not a mathematically sharp distinction between the two approaches, of course. A lawyer or politician will use the truth when it suits his purpose. And an essayist trying to follow the truth will inevitably have biases that cause him not to follow the truth as far down some roads as others. But though the two approaches form a continuum, and writers sometimes drift along it in the middle of a given piece, the distinction is a meaningful one.

Re: Of the 1%, by the 1%, for the 1%

#66

Post by chairface » Sun, Apr 03, 2011, 5:48 PM UTC

lusis wrote: post #44

henrikschroder wrote: post #34

Earlier quoted context omitted.

The main criticism isn't that "the rich" have a lot of the income and assets, or that their share is increasing, it's that the rest of the people are getting less. The american society as a whole is getting richer, but the majority of the members of that society are getting poorer. Is that really the way things should be? On the other hand, this piece only talks about inflation-adjusted net income. If you compare the…

Wealth isn't a fixed pool of stuff. Me having more wealth isn't taking away from someone else.

Nor is that what henrikschroder is claiming. I understand him to be saying that the majority of Americans have declining incomes, adjusted for inflation, over some recent period of time. Could be true, but I'd like to see numbers.

Re: Of the 1%, by the 1%, for the 1%

#67

Post by pg » Sun, Apr 03, 2011, 6:18 PM UTC

qq66 wrote: post #25

pg wrote: post #3

This is written more like a speech by a politician than as an attempt at analysis. The type of economic inequality that successful startups yield, and which accounts for a lot of the entries in the Forbes 400, is described merely as a theory cherished by the rich, and dismissed with evidence it would be a compliment to call anecdotal. And while there's a lot of talk about how the rich own the government, he doesn't e…

The Forbes 400 is mostly entrepreneurs but the "Forbes 40,000" is mostly financiers, only a small fraction of whom create net positive value.

I don't see any reason to assume the distribution of outcomes for financiers is flatter than that for entrepreneurs. Is there something about finance that should make that so?

Re: Of the 1%, by the 1%, for the 1%

#68

Post by alnayyir » Sun, Apr 03, 2011, 7:02 PM UTC

tesseract wrote: post #22

alnayyir wrote: post #17

Earlier quoted context omitted.

>, and they probably can't afford a house. I moved to the bay area recently, and I'm an engineer. I was kind of wondering how people actually live out here. I came here from New York, so I get how people can rent for their whole lives, but I had thought that there'd be more reasonable home ownership in the bay area. Not so. :\

I'm a recent (last few months) migrant to the bay area. I have to say, for a city that hates capitalists, San Francisco sure is expensive. (hmm, maybe there's some causation there?)

Stow the politics, this is NOT the place

Re: Of the 1%, by the 1%, for the 1%

#69

Post by cstross » Sun, Apr 03, 2011, 7:13 PM UTC

gaius wrote: post #18

moultano wrote: post #8

Earlier quoted context omitted.

250k of household income puts you at the 98.3 percentile, so any two married valley engineers probably qualify, and they probably can't afford a house. http://en.wikipedia.org/wiki/Household_income_in_the_United_...

Same situation here in the UK - you become one of the hated "rich" at about GBP 37k where income tax goes up to 40%. Nowhere in the Home Counties is that enough to get a mortgage even on a 1-bedroom flat, let alone a house. A super-tax of 50% kicks in at GBP 150k - but an ordinary family home costs around GBP 500k. As normal in politics, the middle classes are being raped for the benefit of those at the top and at th…

Not exactly.

Firstly, the average London salary is £33,187; in Birmingham it's £25,273. An average middle-class household income should therefore be somewhere in the £30K-£60K range.

The 40% marginal income tax rate does indeed kick in at a very low level compared to the USA -- at £37K -- because it has barely risen for about 20 years. But inflation has pushed a lot of regular workers into that territory, and far from a high tax payer being one of the "hated rich", it's just another burden born by the middle class. (For "hated rich" status you need to aspire to the 50% marginal rate, which kicks in on income over £150,000 a year.)

Meanwhile, the average home in the UK costs £232,628, but that's heavily skewed by London and the South-East -- in the West Midlands (Birmingham) for example, it's £177,690.

What we've got is a situation where the marginal rate of income tax rises steeply much earlier than in, say, the USA -- but there is (or was) a much higher level of social services. For example, that tax rate includes free healthcare and primary/secondary education. And property taxes are much lower than in the USA, because education comes out of central government funds.

Source: http://www.payscale.com/research/UK/Country=United_Kingdom/S...

Source: http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_pric...

Re: Of the 1%, by the 1%, for the 1%

#70

Post by henrikschroder » Sun, Apr 03, 2011, 7:16 PM UTC

chairface wrote: post #66

lusis wrote: post #44

Earlier quoted context omitted.

Wealth isn't a fixed pool of stuff. Me having more wealth isn't taking away from someone else.

Nor is that what henrikschroder is claiming. I understand him to be saying that the majority of Americans have declining incomes, adjusted for inflation, over some recent period of time. Could be true, but I'd like to see numbers.

Exactly, I've even seen some articles here on HN that were about this, but a quick googling seems to say that the jury is kinda out on that one. If you look at wikipedia the incomes for the lower percentiles are pretty flat, but not really declining.

shrug