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Are super-rich people just better at making money?

pudding.cool

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Re: Are super-rich people just better at making money?

#221

Earlier quoted context omitted.

Ah, the mythical "super-rich" who could fund all of our solutions, if only we could prise their money out of their clutching hands! It's funny how they always exist, even in countries like the UK and France which in reality have taxed them out of existence, and payscales are absurdly compressed compared to the US. Careful what you wish for, you are someone else's "super rich".

>the UK and France which in reality have taxed them out of existence You're making it sound like billionaires are an endangered species there. :) Last time I checked there's more than enough billionaires living in the UK and France[1]. [1] https://en.wikipedia.org/wiki/Bernard_Arnault

That's the very definition of cherry picking.

Try this dataset instead:

https://en.wikipedia.org/wiki/List_of_countries_by_number_of...

Re: Are super-rich people just better at making money?

#222
post #209
post #91

Earlier quoted context omitted.

In the real world, there is more than one sandwich seller and they compete with each other. When was the last time you non-consensually bought a sandwich? Even homeless people on the street will sometimes refuse free food, so the idea that sandwich-sellers can set any arbitrary price they want or people will starve is just not something that happens in practice. Indeed, sandwiches are abundant and affordable.

People tend to think about monopolies in terms of single companies, but they're more commonly a systemic thing. Housing: Most voters are homeowners, with the shared incentive to increase the price of housing in their town through restrictive policies. This ignores the interesting conversation about whether NIMBY actually increases property values, but most people believe they do. They don't even have to be explicit a…

Those are all industries that are heavily regulated and/or subsidized by the government. I’m not saying the free market is the perfect answer to everything, but none of those are a free market.

Re: Are super-rich people just better at making money?

#223
Unless you come from a wealthy situation, the only way to get rich is luck. That's it.

Hard work is worthless, just ask people in the third-world work 18 hours for a pittance to survive.

Of course luck may require certain knowledge, wherewithal and timing. You don't win a lotto without waking up at the right time, driving to the right shop and buying the right ticket.

Re: Are super-rich people just better at making money?

#224
post #131
post #99

Earlier quoted context omitted.

> Buying a second, third, fourth home? It's too easy for the ultra-rich to find loopholes in any rules. If there is a tax on homeownership, they will simply not own any home but will own some corporate entity that own the asset. See ? No secondary residence. Just an investment in a corporation that happens to home a bunch of houses.

Why should corporations be allowed to purchase homes in the first place? Remove that or heavily tax it.

I don't think its that unreasonable that big apartment complexes are owned by corporations.

Re: Are super-rich people just better at making money?

#226
post #176
post #47

Earlier quoted context omitted.

As a practical matter, it is very difficult to tax wealth (and even harder to do it fairly.) I don't think the issue is lack of will but lack of plan that actually works in the face of assets with unclear value and/or difficult to liquidate. And this doesn't just affect the ultra rich but people like SWE too. How much is the stock you have in the non-public company you work at really worth? SWE are probably one of th…

I mean... you could start by taxing realized capital gains at >20% It's hard for me to give an argument like "this is difficult" credence when we already have a capital gains tax that's lower than most income taxes. I will buy this is difficult when you raise that number to 50% and we still have the same issues.

Taxing realized capital gains would be what i consider taxing income not wealth.

I agree that taxing realized capital gains is relatively easy.

Re: Are super-rich people just better at making money?

#227
post #166

Earlier quoted context omitted.

This focus on super-rich individuals is totally misguided. What's important is the economic system. Rich individuals are simply a nauseating side-effect of capitalism. Nobody really likes it, but there simply isn't anything better. The burden of proof is on the complainers. Even Marxist-sympathetic Peter Singer gets it. >Look, I think it would be better if you had an economic system in which we didn’t have billionair…

I don't get the productivity argument. What productivity is enabled by billionaires or even individuals? Noam Chomsky has covered this, but most corporations benefit extensively from decades of government funded research and development. The socialist driven productivity is there, it's just that we slap capitalism on it at the end and think it was that that got us here.

I think this is referring to a widely used mental model in economics whereby you look at the allocation of resources "other than money". So if you look at a piece of farmland, you look at how many people it feeds and not so much at the fact that person X owns it and person Y needs to pay X for food. The fact that X becomes richer as a side-effect of Y not having to starve triggers our sense of injustice, but at the end, what really matters is that everyone gets fed. If, trying to right such injustices, you end up with an economic system where that piece of land feeds fewer people, you might have done yourself a disservice.

Re: Are super-rich people just better at making money?

#228

I am a devout capitalist with an accounting degree and an MBA. I believe the theory and data indicates that wealth is a mix of (in order): luck, family wealth, social ability, attractiveness, height, intelligence, natural abilities which align well with making money (conscientiousness, ability to delay gratification, affinity for work in scalable professions like IT, etc), culture, place of residence, likelihood of s…

> I believe the theory and data indicates that wealth is a mix of (in order): luck, family wealth, social ability, attractiveness, height, intelligence, natural abilities which align well with making money (conscientiousness, ability to delay gratification, affinity for work in scalable professions like IT, etc), culture, place of residence, likelihood of sociopathy, and many more.

One could argue that most (if not all) of these factors still come down to being lucky

Re: Are super-rich people just better at making money?

#229

Earlier quoted context omitted.

No, but it's a decent approximation. Even in the case of "creating wealth", the person with more money usually gets a bigger share of the money simply because they had more money. This being Hacker News, I think we all are too close to the tech startup model, which is certainly far more equitable than others; but a lot of companies do not share fairly the value created between workers and owners.

> simply because they had more money It's because they took on more risk. The bigger the risk, the bigger the payout. The safer the investment, the lower the payout. > do not share fairly the value created between workers and owners. They do if one considers risk.

There are several things here.

One is that you're only considering direct monetary risk. For example, imagine a person that starts a business with X dollars, which will usually be a percentage of their wealth. This person hires an employee at a salary that's barely above their living expenses, but with the idea to ascend as the company grows. If the company goes bust, who loses more? The owner still has money, the person living paycheck to paycheck might not have enough funds to live until they find a new job and they have probably lost money because they didn't go for a higher paying job (with less upside but more safety).

Two, the risk/benefit ratio is not fairly distributed either. If I have a hundred dollars in the bank I cannot really access any investment opportunity, like creating a business, that could multiply that money with the same risk.

Three, thinking only in relative terms is a mistake, even if risk/benefit ratios were evenly distributed, because not all people have the same relative expenses. For example, assume both person A and B get into a stock that after a year gives them a 50% profit. Person A invests their emergency fund, which is $1000 bucks. Person B is far more wealthy and invests $100k, and they still have a lot of money leftover. Here, A is actually taking on more risk because losing that thousand dollars means they might not have enough money to fix their car or pay for health treatment. Person B, if they lose that money, it will hurt but it won't really change their living situation. And when the profits come, A has $500 more, which is not that much and probably goes into the emergency fund again; but B has earned $50k and probably has enough to go on a super nice vacation and still have a lot leftover. In other words, even if the risk/benefit ratio is the same, the actual consequences are not equal. Having more money makes the same ratios far more beneficial in practice.

Re: Are super-rich people just better at making money?

#230
post #3

To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…

Your assumption is that the state will apply that money optimally (or at least more optimally than the super rich - also, notice you didn’t define what super rich are). Looking at historical and present data, I can be absolutely sure that the state will mismanage that money in almost every country. I’m Portuguese, my government is collecting more ~ 25% taxes than it collected 6 years ago when the current ruling party…

That implies that privately owned organizations manage money well, which is not the case either. The larger an organization is, the more inefficiencies it accumulates. Plus, don't forget that states usually provide a lot of subsidies to companies and also pay businesses/consultants to do some of their work.
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