Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why Inequality Matters

gatesnotes.com

Post reply on HN
Print view View original

81–90 of 462 posts

Re: Why Inequality Matters

#81

Post by davidw »

couchand wrote: post #44
Shinkei wrote: post #39

Earlier quoted context omitted.

The problem with any consumption tax is that wealthier people spend a smaller percentage of their income on needs compared to lower classes. If you make it progressive, they will just buy their most expensive items overseas and never (or hide?) the import and avoid the tax. Anytime you try to regulate, there will be people making big money trying to find workarounds. Anyway, taxing in this way imposes a moral judgeme…

Why do people always use the term punish when talking about taxes? Taxes are levied, you're only punished if you fail to pay.

Taxes, among other things, can be used to discourage "bad" behavior - like smoking, or burning carbon, or other stuff that has costs for society at large ("externalities").

By and large, the more you tax something, the more you discourage it.

Re: Why Inequality Matters

#82

Post by marcosdumay »

saalweachter wrote: post #42
r0h1n wrote: post #10

I must say Bill Gates, in his post Microsoft avatar, continues to surprise me constantly. This is a refreshingly candid and sanguine review of Piketty's book from someone who was a ruthless capitalist not so long ago. Gates rightly (and self-servingly) also points out that Piketty does not consider philanthropy as a means to correct some of capitalism's imbalances. Here's a few of Gates' conclusions: > Piketty is rig…

The problem with differentiating between the "good investor" and the "lavish lifestyle guy" is that the good investor is actually the one that you (rather, Piketty) need to be most worried about. People worried about inequality aren't (just) worried about the morality of consumption -- a fat cat sitting atop a mountain of cash drinking champagne and eating caviar while the peasants starve. They're worried about maint…

The elephant that everybody pretends that isn't in the room is that what you just called weapons is the ability to create wealth. Do we really need to take it away from everybody?

Recently, capitalists aren't the ones disrupting the economy in the US, here in Brazil, in the PIIGS, or any other place that I looked. That position is always held by people with power, but little capacity of creating wealth themselves. At general, I think Bill Gates is right, and there's little scrutiny over the distributive phenomena in an economy.

If I had to choose, I'd tax consumption (with a VAT) and redistribute a fixed rate of it by a basic income. But that's mostly because of procedural simplicity and resistance to corruption. I don't think Piketty's ideas are complete enough to base a taxation system upon them.

Re: Why Inequality Matters

#83

Post by crdoconnor »

noarchy wrote: post #51
esfandia wrote: post #16

Philanthropy strikes me as anti-democratic. Why should the rich get to choose which causes are more deserving of their generosity? Let the elected government pool the money and make this determination.

>Philanthropy strikes me as anti-democratic. Why should the rich get to choose which causes are more deserving of their generosity? Let the elected government pool the money and make this determination. The reason the rich get to choose is because it is their money. Just as you can decide, today, to donate your money to the charity of your choosing. And really, this isn't any different from asking why the rich (or yo…

>The reason the rich get to choose is because it is their money.

This presumes that most, if not all of the money gained by the rich is justly earned. I would take serious issue with this.

Re: Why Inequality Matters

#84

Post by taeric »

bsbechtel wrote: post #66
taeric wrote: post #47

Earlier quoted context omitted.

Seems like a very small amount of evidence to base such a large idea on. You could probably form the same argument against the more modern consumption taxes. Since for many this translates to a sales tax, and not the early excise taxes that are covered under the same category. (Right?) Though, your argument falls more heavily on the mistake Gates seems to have also made. The type of wealth that the book refers to as…

>This is somewhat important, because much of what would have been the "old money" in the US was effectively disrupted by massive technology changes. This is the point I am trying to make...if this old money had been reinvesting in technology over the past 150 years, it might have been possible to maintain it. Fortunately in the US, the mechanisms were not in place for the government to help these rentiers maintain th…

Right, but now we have investment vehicles where you can effectively invest in investments alone.

No longer must you invest in a rail company and do all you can to make them do well. You can literally invest in the volatility of said rail company. Further, yes, you can invest in manipulating the government to make sure that company does well.

But, without the government, you could likely also just invest directly in competitors to keep them down such that said company still does well. I know, this would still be preferable to keep disallowed, but the hypothesis was an abstaining government. What level of activity counts as abstaining?

Re: Why Inequality Matters

#85

Post by noarchy »

crdoconnor wrote: post #83
noarchy wrote: post #51

Earlier quoted context omitted.

>Philanthropy strikes me as anti-democratic. Why should the rich get to choose which causes are more deserving of their generosity? Let the elected government pool the money and make this determination. The reason the rich get to choose is because it is their money. Just as you can decide, today, to donate your money to the charity of your choosing. And really, this isn't any different from asking why the rich (or yo…

>The reason the rich get to choose is because it is their money. This presumes that most, if not all of the money gained by the rich is justly earned. I would take serious issue with this.

>This presumes that most, if not all of the money gained by the rich is justly earned. I would take serious issue with this.

Case by case, you may or may not have a point. Is the alternative to have the state take the money and spend as it wishes? In such a case, is the money "justly earned" if it was taken by force?

Re: Why Inequality Matters

#86

Post by crdoconnor »

Joeboy wrote: post #23

> I think we’d be best off with a progressive tax on consumption In theory I like the idea of a "tax on consumption", because it suggests a penalty on conspicuous consumption and wasteful spending. In practice, taxes on consumption are seen as regressive, ie. they affect the poor more than the rich. Is there a way to tax "bad" consumption, without penalizing people who "consume" a large proportion of their income sim…

>In theory I like the idea of a "tax on consumption", because it suggests a penalty on conspicuous consumption and wasteful spending.

If you want a penalty on conspicuous consumption then simply levy taxes on items which count as conspicuous consumption - yachts, private jets, houses > $2 million USD, super cars, etc.

It would probably not be a huge list and it wouldn't be a complicated rule. You might miss one or two exceptions, but that's okay.

It would be a LOT simpler than going the other way - taxing everything consumed in the economy and then making exceptions for conspicuous consumption.

Re: Why Inequality Matters

#87

Post by ska »

"I don’t see anyone on the list whose ancestors bought a great parcel of land in 1780 and have been accumulating family wealth by collecting rents ever since."

What you do see though, in the same Fortune 400 list is that 6 of the top 10 people on that list didn't build their companies (in the sense that Bill Gates did), they inherited them.

I don't know how much the current crop Kochs or Waltons are responsible for the current success of their ventures, but this is the type of thing I believe Piketty had in mind as much as the "parcels of land" approach. Also rent seeking is a problem distinct from a rentier class.

Can you argue convincingly that these people would have been just as successful without the advantages of their births? I suspect that would be quite difficult.

Re: Why Inequality Matters

#88

Post by crdoconnor »

noarchy wrote: post #85
crdoconnor wrote: post #83

Earlier quoted context omitted.

>The reason the rich get to choose is because it is their money. This presumes that most, if not all of the money gained by the rich is justly earned. I would take serious issue with this.

>This presumes that most, if not all of the money gained by the rich is justly earned. I would take serious issue with this. Case by case, you may or may not have a point. Is the alternative to have the state take the money and spend as it wishes? In such a case, is the money "justly earned" if it was taken by force?

It's a mistake to think that states 'spend' your taxes. They don't really.

It helps to think of states as machines that print money which they spend at one end and run an incinerator into which they put all of your taxes at the other.

The clear implication of this is that:

* Spending is inflationary

* Taxes are there to clamp down on inflation.

* Taxes are there to change behavior in a socially conscious way (e.g. tax cigarettes to reduce smoking // tax breaks for wind farms).

Your cash is debt. It is not something you own like a house. It is a social relationship subject to intermediation by the government under democratic oversight.

Re: Why Inequality Matters

#89

Post by georgeecollins »

I like his comparison of how the emergence of the auto industry was a way new wealth was created by entrepreneurs and old wealth was destroyed through bad investments. He says he sees a similarity in tech booms. There is a real value in the frothyness of tech bubbles. Capital can't accumulate forever. People need to be convinced to make bad investments. In that sense unsuccessful VCs serve a useful purpose.

Re: Why Inequality Matters

#90

Post by simonh »

saalweachter wrote: post #42
r0h1n wrote: post #10

I must say Bill Gates, in his post Microsoft avatar, continues to surprise me constantly. This is a refreshingly candid and sanguine review of Piketty's book from someone who was a ruthless capitalist not so long ago. Gates rightly (and self-servingly) also points out that Piketty does not consider philanthropy as a means to correct some of capitalism's imbalances. Here's a few of Gates' conclusions: > Piketty is rig…

The problem with differentiating between the "good investor" and the "lavish lifestyle guy" is that the good investor is actually the one that you (rather, Piketty) need to be most worried about. People worried about inequality aren't (just) worried about the morality of consumption -- a fat cat sitting atop a mountain of cash drinking champagne and eating caviar while the peasants starve. They're worried about maint…

Interesting argument, but surely you don't think the world needs less investment? So if you're going to tax away money that would otherwise be invested in creating businesses and jobs, what do you think should be done with it instead? Or do you think the state is a more efficient investor of capital?

I do agree that wealth is a potent weapon, but that's why capitalism works best when markets, and politics are well regulated. The degree and form of regulation is a perennial problem, but it's an unavoidable one.

Post reply on HN