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Billionaires amass more through inheritance than wealth creation, says UBS

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Re: Billionaires amass more through inheritance than wealth creation, says UBS

#301

Post by lapcat »

DennisP wrote: post #297
lapcat wrote: post #229

Earlier quoted context omitted.

> it could be that the writer was more interested in pushing a political view than getting clicks. The report comes from the Union Bank of Switzerland. https://www.ubs.com/global/en/media/display-page-ndp/en-2023... "UBS manages the largest amount of private wealth in the world, counting approximately half of the world's billionaires among its clients." https://en.wikipedia.org/wiki/UBS Also keep in mind that some of…

I don't dispute the content of the report, but the report doesn't have the misleading title we were talking about; in fact, the first line says "For the first time in nine editions of the report..." My only complaint is that the title at FT makes it sound like it's always this way.

I dispute that the title is misleading. People seem to expect too much from an article title. You can't get all of the nuance in just a few words.

The subtitle is "A survey of the global elite shows the ‘great transfer’ between generations has overtaken entrepreneurship", and the first sentence of the article is "New members of the global super-rich gained more of their assets through inheritance than through wealth creation this year — the first time that this has been recorded by Swiss bank UBS in its nine years of surveying global billionaires."

Nobody is getting misled.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#302

Post by lapcat »

DennisP wrote: post #299
lapcat wrote: post #264

Earlier quoted context omitted.

We'll see what happens when they actually die. In any case, they're giving their money "away" to "foundations" controlled by billionaire families. The money is still inherited, and these foundations can be seen as tax shelters.

I've spent some time googling how foundations work and while there are various structures, a common theme is that it's not that cushy. The bulk of the money has to actually go to charity, otherwise you pay the normal taxes. And they keep an eye out for tricks like having the foundation pay absurd salaries to your relatives.

The foundation doesn't have to be cushy in itself. The family members already inherit enough money to satisfy all of their material desires. You don't even need to be a billionaire to satisfy all of your material desires. Beyond a certain point, wealth is simply power, and the foundations give power to the families.

What I see from the billionaires is a desire to undermine democratically elected governments, starving them of funding by cutting taxes, and making them dysfunctional by financing the campaigns of dysfunctional politicians. When the masses lose faith in democratically elected governments, the so-called "charitable" foundations swoop in to become the trusted providers of social services to the masses. The ultimate result is the elimination of democracy and the restoration of hereditary aristocracy, with the foundations ruling the world as undemocratic governments.

I would be more impressed if billionaires gave away 99% of their wealth to somewhere that is completely out of the control of themselves and their families.

The world's wealthiest people aren't looking to buy more stuff. There are only so many mansions and yachts you can buy before you'd had enough with that and get bored. For the purposes of buying stuff, wealth has diminishing returns. What they're looking for in accumulating unlimited wealth is to increase their power relative to everyone else, to perpetuate social inequality. Power is a kind of zero sum game, because if we all accumulate the same amount, we're still all equal.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#304

Post by andrewjl »

AnthonyMouse wrote: post #209
abeppu wrote: post #59

Earlier quoted context omitted.

I also think it's worth calling out that his follow-up, "Capital and Ideology" in its latter sections includes several suggestions for counteracting the trend to increasing inequality. One of these is basically that _every_ person should have a windfall inheritance when they're in their early adulthood, which would give them opportunities to pursue education, try starting a business, or whatever else. And naturally,…

> And naturally, this needs to be funded by taxes on the very wealthy. This is the part where the math never works out. If you look at the richest people, they have something like tens to low hundreds of billions of dollars. Which is less than the amount of money the federal government already spends every week. If you taxed the top 100 billionaires at a rate of 100%, it would fund the existing federal government (an…

The math doesn't work out by design due to favorably shaped policies. A sizable amount of wealth is hidden away extra-jurisdictionally or consists of intentionally undervalued assets or isn't captured in statistics.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#305

Post by Epa095 »

NovemberWhiskey wrote: post #298
Epa095 wrote: post #285

Earlier quoted context omitted.

$10M sounds like a lot, because it is a lot. It's so much that if you make the median US income, you have to make it for ~300 years -tax free- to save up $10M. It's 50 years, tax free, on a good developer salary. It's so much that with 5% interest rate you can pay those $120k in tax and still get $380k a year, placing you among the top 5% wage earners in the US, while doing nothing more than own. Is so much, that whe…

I mean, sure if you completely ignore investment returns; otherwise your numbers are bogus. The “safe” rate of retirement drawdown is generally accepted as 4% because inflation, bad years in the markets etc. In case it isn’t obvious, taxing wealth is basically taxing the older people in society, because they had more of a chance to accumulate wealth. Hitting people at retirement with a 25% marginal tax increase is ju…

Use 4% then. You're left with 280k (400-120) a year. That's 9 times the median US income, and very close to being in the top 5% income. Not to mention that capital tax is usually lower than income tax.

Even ignoring investment returns completely, $10M is enough for anyone to live extremely comfortable the rest of their life, just using this money!

Taxing the very rich (as the top 1% is) is reasonable, also when they are retired.

You speak as if the money itself can't be used, only the returns. As if it's somehow 'not a lot of money' if it's not possible to live indefinitely on the capital gains alone.

But I agree that it's unworkable, but only because this is a powerfull group (wealth is power after all). I think it's completely unrealistic for that reason alone. But it's a good idea, and $10M is a lot of money.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#306

Post by kajecounterhack »

NovemberWhiskey wrote: post #276
jay_kyburz wrote: post #231

Earlier quoted context omitted.

I wonder if that's really true, I'm going to do some web searches latter because I think its interesting, but I doubt a young person who has an online only tech job, and can therefore live anywhere, could even afford an undeveloped parcel of land in the middle of nowhere.

Yes, they could - much of the land in the US sells for hundreds of dollars per acre.

I think the point is that humans need a lot of infrastructure to live. Reliable water/sewage, internet connectivity, schools / day cares if you have kids, access to healthy food (google "food deserts"), etc.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#307

Post by ryandrake »

AnthonyMouse wrote: post #209
abeppu wrote: post #59

Earlier quoted context omitted.

I also think it's worth calling out that his follow-up, "Capital and Ideology" in its latter sections includes several suggestions for counteracting the trend to increasing inequality. One of these is basically that _every_ person should have a windfall inheritance when they're in their early adulthood, which would give them opportunities to pursue education, try starting a business, or whatever else. And naturally,…

> And naturally, this needs to be funded by taxes on the very wealthy. This is the part where the math never works out. If you look at the richest people, they have something like tens to low hundreds of billions of dollars. Which is less than the amount of money the federal government already spends every week. If you taxed the top 100 billionaires at a rate of 100%, it would fund the existing federal government (an…

> If you taxed the top 100 billionaires at a rate of 100%, it would fund the existing federal government (and no new programs) for about a year, and then there would be nothing left for next year.

The point to taxing billionaires is not that "the government needs their money to spend". The government will spend the money anyway regardless of whether it has it. The point to taxing billionaires is to even things out and nudge society to be more equal counter to market forces continuously concentrating wealth. I'd fully support a tax on billionaires where the money just gets burned in a furnace.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#308

Post by kajecounterhack »

zozbot234 wrote: post #181
kajecounterhack wrote: post #159

Earlier quoted context omitted.

> But I would argue the world is not zero-sum. Modern life for middle class or poor class people is a lot better than the vast majority of history Zero sum is not a binary. For things where we are able to increase output using technological progress to the point where supply sufficiently meets demand, sure, it doesn't feel zero sum. Nobody is arguing that we need to fix that -- the challenge is actually preserving th…

> Housing and land in particular are really tough. Housing and land are not "tough". There's plenty of dirt cheap land even in highly developed countries; it just happens to be outside the most popular locations. But if we want housing to become both cheap and livable we must invest in those "unpopular" places, even as we also try to build more housing in the more high-demand locations. There's just no avoiding that.

My point stands. Getting investment into those places is tough. Towns and cities don't construct themselves. Construction is especially sensitive to monetary policy.

Land by itself is not useful -- if you can't make a living what's the point of having land? Land is most useful when it's in proximity to opportunity, and opportunity-adjacent land is scarce and only getting scarcer.

Re: Billionaires amass more through inheritance than wealth creation, says UBS

#310

Post by rufus_foreman »

lapcat wrote: post #302
DennisP wrote: post #299

Earlier quoted context omitted.

I've spent some time googling how foundations work and while there are various structures, a common theme is that it's not that cushy. The bulk of the money has to actually go to charity, otherwise you pay the normal taxes. And they keep an eye out for tricks like having the foundation pay absurd salaries to your relatives.

The foundation doesn't have to be cushy in itself. The family members already inherit enough money to satisfy all of their material desires. You don't even need to be a billionaire to satisfy all of your material desires. Beyond a certain point, wealth is simply power, and the foundations give power to the families. What I see from the billionaires is a desire to undermine democratically elected governments, starving…

>> I would be more impressed if billionaires gave away 99% of their wealth to somewhere that is completely out of the control of themselves and their families

Warren Buffett has already given away stock worth more than his current net worth, and the main beneficiary has been the Bill & Melinda Gates Foundation. His will gives more than 99% of his remaining net worth to philanthropy.

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