There's something ironic about charging $75/month for this article.
$75 a month seems ludacris
Growing income inequality is driving public mistrust
21–30 of 41 posts
Re: Growing income inequality is driving public mistrust
#22Curious to not see inheritance/estate taxes listed among the possible solutions here, but I guess that a "wealth tax" could indirectly address this by whittling away at large fortunes over time while people are still alive. This may help avoid the issue of people using trusts to sidestep estate taxes (although I'm sure they would find a way!). More generally, I highly recommend any of Thomas Piketty's books for detai…
I agree.
Inheritance is extremely unmeritocratic yet is somehow completely acceptable even among hardcore libertarians. Why?
Most 'tax the rich' talk revolves around income. But real rich people don't make an income. They make capital gains or take loans against assets. It's a complete red herring.
Gifts and inheritance should be the target of any fair-minded individual. As with any power passed down by familial connection, it leads to a less efficient use of resources. We have all of history to tell us it's a bad idea.
People who earn their wealth in life have, as good as any, a justification to know something of how to allocate it. That is, in the ideal society where wealth is a reward for growing the economic pie. We're not there yet. But this is the closet thing we've got.
People who inherit their wealth have no such justification. Let wealth die with the person.
Re: Growing income inequality is driving public mistrust
#23Chamath Palihapitiya had some interesting comments about this topic that I think you guys might enjoy:
Narrative violation for the "progressive" left: The American Dream is alive and well.
12% of American Families are now Millionaires "Perhaps most noteworthy, there really are a lot of true millionaires. About 16 million American families—just over 12%—have wealth exceeding $1 million, up from 9.8 million families in 2019. Nearly eight million families are multimillionaires, i.e., their wealth exceeds $2 million, up from 4.7 million."
Who are mini-millionaires? "They generally earn between $150,000 and $250,000 a year. Rather than being left behind as all the gains in the economy accrue to billionaires, they have in fact seen bigger wealth gains over the past three years than the top 10% of families."
Who saw the biggest gains in wealth? "Indeed, the biggest wealth gains between 2019 and 2022 were among the approximately 13 million families in the 80th to 90th percentile of the income distribution. Their median wealth jumped 69% from 2019, adjusted for inflation, to $747,000 in 2022." https://twitter.com/chamath/status/1718016818118553622
here is a snippet from the allinpodcast thats related.. https://www.instagram.com/reel/C1VXuOAyBqz/
definitely worth the 2 mins
Re: Growing income inequality is driving public mistrust
#24Curious to not see inheritance/estate taxes listed among the possible solutions here, but I guess that a "wealth tax" could indirectly address this by whittling away at large fortunes over time while people are still alive. This may help avoid the issue of people using trusts to sidestep estate taxes (although I'm sure they would find a way!). More generally, I highly recommend any of Thomas Piketty's books for detai…
I'm not an expert here but my understanding is that most generational wealth is gone by the third generation anyway. Even if you outlawed inheritance entirely it seems like it wouldn't make a huge marginal difference?
That is a truism that applies mainly to the US, if it applies anywhere. The US differs from a lot of places in, say, Europe in that partible inheritance is almost universally practiced. That is, inheritances are divided equally between children. This accelerates the drawdown of the fortune.
In Europe I have heard it is more common, although perhaps not a norm, to practice a meritocratic form of primogeniture. One child, who is not necessarily the eldest son but who is seen as the best steward, is chosen to receive most of the fortune, and is trained how to maintain it. Other children may receive much smaller amounts.
The fortune is much more likely to persist if not divided, preventing the liquidation of large holdings and more importantly managing expectations among the gaggle of heirs about how much they'll get.
Re: Growing income inequality is driving public mistrust
#25I can't read the article so I'm just going by the headline... I was thinking about this over Christmas break. My wife and I live in Hammond, IN, a poor town near Gary and we were visiting my in-laws in Boca Raton, FL. Until then, I had thought of income inequality in terms of billionaires and outliers. But as I walked the beautiful sidewalks along the pristine manicured landscapes between the gorgeous library I was w…
The billionaires really, really want you to perceive this distinction as a real inequality problem. When people making $30K are resenting/fighting people making $300K, the people making $300M are sitting back and laughing. There's really not much of a difference between the lifestyles of Hammond, IN vs. Boca Raton, FL. I mean, there's a difference, but the difference is tiny compared to the difference between them an…
What's interesting is in my neighborhood I've seen growing inequality at the ground level over the past 20 years. We are an old neighborhood of decaying middle class housing still occupied by the elderly remnants of long-term owners. As the elderly move out they are replaced by one of three possibilities:
1. A large immigrant family moving in with one family to a room, sometimes sublet to several families, with no maintenance being done and the house falling apart.
2. An upper middle class family typically with Teslas moving in and doing a full remodel of the house.
3. An upper class family tearing down the old house and building a 6,000-10,000 sqft+ mansion for the husband, wife, and zero to two children.
In the first case above, the poorer section, city services, roads, shopping continues to decay, with ever more liquor stores, massage parlors, pawn shops, tire repair, and used auto lots. This is by and large the largest area and population of the neighborhood.
In the second case above, roads are repaired, a few new restaurants, but largely a decaying infrastructure. A large area but not as big in area or population as #1.
In the third case above, all new roads. New full rebuilt shopping. A new school. A new public library. The smallest area by far, but once you enter it, it's a different world. Literally one side of the street is nightly robbery dilapidated midrise, and the other side behind the walls with their own police force are new mansions that start at $3m.
Note what's missing from the above: the middle class. They don't exist here. They die off and are replaced, largely by the lower class. I've seen this happen on the ground, over the years. Inequality at the ground level. And it's still going on: absolutely no new building or improvements for the poorest, a little renovation for those with salaried jobs, and continuous rebuilding of luxury mansions for the upper crust.
Doesn't seem sustainable from the Piketty perspective. I only hope it can be resolved peacefully. I'd even be fine with we all get new things but some get nicer ones than others. But this, you get the same thing, worse even, every year, and we get more and more and more, doesn't fit well with human sense of decency.
Re: Growing income inequality is driving public mistrust
#26Earlier quoted context omitted.
> The billionaires really, really want you to perceive this distinction as a real inequality problem. When people making $30K are resenting/fighting people making $300K, the people making $300M are sitting back and laughing. But that is inequality, too. Just as a thought experiment, if you were to take the global GDP and spread it perfectly evenly over every person on the planet, you'd have less than $13k per capita.…
I’m disgusted that there are 5-10,000 luxury yachts in the world while infants are dying of malnutrition and people have to worry about feeding their kids while attempting to save for retirement on salaries that have hardly moved for anyone except a few fortunate elites since the 80s.
> on salaries that have hardly moved for anyone except a few fortunate elites since the 80s.
I assume you're talking about salaries in the USA, and this is largely because global salaries have risen to take more of their fair share of the pie. At the same time, this has put a lot of pressure on US labor.
The postwar period from 1945 to around 1980 in the USA was historically aberrant. In 1970, the USA's share of global GDP was 38%. In 2023 it was around 15.5%.
Globally, living standards have skyrocketed since the 80s.
https://ourworldindata.org/a-history-of-global-living-condit...
Re: Growing income inequality is driving public mistrust
#27Curious to not see inheritance/estate taxes listed among the possible solutions here, but I guess that a "wealth tax" could indirectly address this by whittling away at large fortunes over time while people are still alive. This may help avoid the issue of people using trusts to sidestep estate taxes (although I'm sure they would find a way!). More generally, I highly recommend any of Thomas Piketty's books for detai…
I agree. Inheritance is extremely unmeritocratic yet is somehow completely acceptable even among hardcore libertarians. Why? Most 'tax the rich' talk revolves around income. But real rich people don't make an income. They make capital gains or take loans against assets. It's a complete red herring. Gifts and inheritance should be the target of any fair-minded individual. As with any power passed down by familial conn…
> yet is somehow completely acceptable even among hardcore libertarians. Why?
A common area of concern for libertarians is the balance of power between citizens and government. In this case, the power of the government to take your (or your family's) stuff after you die, despite you already having paid taxes on it.
Through a libertarian lens the government "stepping in to make everything fair" can be viewed as unwarranted interference. Especially when a politician's idea of "fairness" might not square up with yours and be subject to political winds.
(I have some libertarian leanings but wouldn't call myself one, overall I believe wealth and inheritance taxes make sense, the big question is "what rate").
Re: Growing income inequality is driving public mistrust
#28Earlier quoted context omitted.
The billionaires really, really want you to perceive this distinction as a real inequality problem. When people making $30K are resenting/fighting people making $300K, the people making $300M are sitting back and laughing. There's really not much of a difference between the lifestyles of Hammond, IN vs. Boca Raton, FL. I mean, there's a difference, but the difference is tiny compared to the difference between them an…
What's interesting is in my neighborhood I've seen growing inequality at the ground level over the past 20 years. We are an old neighborhood of decaying middle class housing still occupied by the elderly remnants of long-term owners. As the elderly move out they are replaced by one of three possibilities: 1. A large immigrant family moving in with one family to a room, sometimes sublet to several families, with no ma…
The natural end state of our trajectory is an Elysium-like class system where a tiny few have everything, physically separated/secured from the remaining billions who have nothing. And rest assured: The billionaire class is actively working to bring about this end state. I'm sure as far as they are concerned, that end state is fully sustainable if they have effective-enough physical security and control/coercion of the population.
Re: Growing income inequality is driving public mistrust
#29Earlier quoted context omitted.
I agree. Inheritance is extremely unmeritocratic yet is somehow completely acceptable even among hardcore libertarians. Why? Most 'tax the rich' talk revolves around income. But real rich people don't make an income. They make capital gains or take loans against assets. It's a complete red herring. Gifts and inheritance should be the target of any fair-minded individual. As with any power passed down by familial conn…
> yet is somehow completely acceptable even among hardcore libertarians. Why? A common area of concern for libertarians is the balance of power between citizens and government. In this case, the power of the government to take your (or your family's) stuff after you die, despite you already having paid taxes on it. Through a libertarian lens the government "stepping in to make everything fair" can be viewed as unwarr…
A fair point. However, unless they are the kind of libertarian that believes in no tax, the government is still going to tax something. And in doing so will decide who is taxed and who isn't. Taxing fundamentally must answer the question of what is fair to tax.
I believe the reason that income is taxed is mainly because it's much easier than wealth for governments to determine and is generally more liquid.
I guess my issue with inheritance is less economic and more moral. It just doesn't seem to fit with modern values yet is untouched as a debate topic. I'm curious as to why that could be.
Re: Growing income inequality is driving public mistrust
#30Earlier quoted context omitted.
> yet is somehow completely acceptable even among hardcore libertarians. Why? A common area of concern for libertarians is the balance of power between citizens and government. In this case, the power of the government to take your (or your family's) stuff after you die, despite you already having paid taxes on it. Through a libertarian lens the government "stepping in to make everything fair" can be viewed as unwarr…
A fair point. However, unless they are the kind of libertarian that believes in no tax, the government is still going to tax something. And in doing so will decide who is taxed and who isn't. Taxing fundamentally must answer the question of what is fair to tax. I believe the reason that income is taxed is mainly because it's much easier than wealth for governments to determine and is generally more liquid. I guess my…
People want to make sure their loved ones are taken care of / will be financially secure, even after they die. This is a fairly core desire.
Family businesses, family farms, family homes - if you hit people there you have to expect an emotional reaction.
People who think "bigger than individuals" - their families, their communities, their churches, their businesses, how to build up productivity and abundance in those spheres. Some people view economic activity as a multi-generational effort and the government stepping in to take everything just because an individual happens to die is kind of a norms violation.
[I get that none of this justifies generations of economic parasites never having to lift a finger, which is why I think the implementation details matter a lot].