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Why Inequality Matters

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Re: Why Inequality Matters

#111

Post by Htsthbjig »

bsbechtel wrote: post #12

>High levels of inequality are a problem—messing up economic incentives, tilting democracies in favor of powerful interests, and undercutting the ideal that all people are created equal. I agree with generally all of Gates' thoughts here, but there are two actors to consider when discussing how to address problems associated with inequality - the government, and those who own capital. There is an implicit assumption…

"The risk with a powerful government that can do this is it can be bought."

A government can be bought?, your implicit assumption is that a government powerful enough will serve the interest of others and this is bad.

The problem for me is that a government powerful enough will serve their OWN interest, the personal interest of the people in power, and this is bad.

Part of my family comes from a former communist country.

In theory, it was "the government of the people", in practice it was the biggest concentration of power ever in so few hands, the politburo. And the people there had nothing to do with those that generated wealth.

In theory those in the politburo were not rich, in practice they could do or get whatever they wanted. Money was not needed for that.

Only one political party, only one company for the entire nation.

This meant you could be the best worker in the world, if someone high enough wants you to sweep streets, you seep streets or starve.

Not only that, if your brother mother or your sister does something the party does no like(like not getting in bed with someone up), you will pay for it too.

People in change of the police(Beria) will rape hundreds of young women and we will only know decades after with zero consequences to those that took part on it.

When taxes become too high, over 50% of what you earn, you become a slave of government. The problem is that for people like Piketty taxes are never high enough.

Mr Thomas Piketty is French. What we see in countries like France is that 60% of the economy is public. They become more and more communist-central planned.

Money is wasted in those societies in terrible malinvestments(like the Great Leap Forward or Qualitative easings), and they never have enough as they are the most incompetent people around until society collapse.

If you can buy the government, then you are lucky, it means the power is not monopolized in only one place.

Re: Why Inequality Matters

#112

Post by brandonmenc »

judk wrote: post #97
protonfish wrote: post #25

Earlier quoted context omitted.

I'm no supply-side economist, or advocate of Brave New World consumerism, but I believe that taxing the purchase of actual consumer products would not have a positive effect on the economy of the country. I believe a healthy economy is an active one. An incentive to remove money from active circulation (hoarding) could have long-term negative repercussions. And a country where the government encourages the average pe…

Paying someone to do worthless work (lavishing luxury on someone) does not help society much. That's just gaming the numbers, like saying "going to war" helps the economy. Paying someone to alleviate basic needs does. Not all consumption is equal.

> Paying someone to do worthless work (lavishing luxury on someone) does not help society much.

Tell that to the people feeding their families by working at the resort, or in the vineyard, or the tannery.

There is a demand for luxury goods, and there always will be. A tax in the consumption of those goods cuts into the wages of the non-wealthy involved in their production.

Re: Why Inequality Matters

#113

Post by rtpg »

brandonmenc wrote: post #95
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…

> I’m also a big believer in the estate tax As a third-generation American, I find the estate tax, even in its current form, extremely offensive, because it strives to reset every generation to zero instead of letting families establish themselves over time by building on the sacrifice and efforts of the parents. The current level of taxation, even though it's been recently, "graciously" increased, greatly extends th…

An estate of 5 million puts you well into the upper echelons of society.

I have little sympathy for those who the estate tax hits

Re: Why Inequality Matters

#114

Post by tim333 »

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…

One practical approach is to have a high income tax on large incomes with a tax break for income which is invested rather than spent. There is something a little like that in the UK where you can offset 50% of your investment in startup against your income tax bill. I'm not sure how economically efficient that will prove - a lot of the startups go belly up. You'd probably want the income tax a bit higher than the present 40-45% to keep Piketty happy.

Re: Why Inequality Matters

#115

Post by yequalsx »

humanrebar wrote: post #107
yequalsx wrote: post #69

Earlier quoted context omitted.

Regarding your last paragraph. It's a problem if too much money is given to causes that don't really benefit society as a whole. There is also the fact that there are no instances of philanthropy ever being at a high enough amount to provide for the general welfare of all of the poor. Only government programs have ever been enough to do this. Government programs scale better than philanthropic ones. It is true that p…

> Only government programs have ever been enough to do this. Considering "the war on poverty" is 50 years old with no end in sight. I think it's bold to claim that any government has adequately eradicated the symptoms of poverty. And why to philanthropies need to scale? What's wrong with numerous hyperlocal philanthropies that treat the particular needs of their communities?

You seem to be considering only the U.S. government. The Scandinavian countries have done quite well in combating poverty. While the U.S. government has not eradicated poverty it was government programs that ensured that people were fed at decent levels in the U.S. and it was government programs that ensured the eradication, for the most part, of a host of a number of diseases that used to be endemic amongst poor people.

The problem with reliance on hyperlocal philanthropies means that location A may be populated by selfish jerks who given nothing to the least of their brethren while location B does.

Re: Why Inequality Matters

#116

Post by ThomPete »

judk wrote: post #100
ThomPete wrote: post #35

Earlier quoted context omitted.

The problem with Piketty (like with Marx) was not their analysis which I find conventional (in todays perspective). The problem with Pikettys book is his solutions. If only he had stayed away from that it would have had much bigger impact IMHO.

Why?

Because it would have been an invitation to debate with facts that are hard to disagree with.

His solutions on the other hand are easily pulled apart and so that is what many discussions end up focusing on. This is unfortunate.

Re: Why Inequality Matters

#117

Post by Kalium »

mkempe wrote: post #56
GuiA wrote: post #46

> Take a look at the Forbes 400 list of the wealthiest Americans. About half the people on the list are entrepreneurs whose companies did very well (thanks to hard work as well as a lot of luck). Contrary to Piketty’s rentier hypothesis, 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. In America, that old mon…

Maybe these "older countries" should try --for a century or two-- laissez-faire capitalism and a government limited to the protection of individual rights.

And maybe the rest of the world knows something we don't - like where laissez-faire capitalism actually leads.

Hey look, I can toss around unsupported political assertions too!

Re: Why Inequality Matters

#118

Post by brandonmenc »

rtpg wrote: post #113
brandonmenc wrote: post #95

Earlier quoted context omitted.

> I’m also a big believer in the estate tax As a third-generation American, I find the estate tax, even in its current form, extremely offensive, because it strives to reset every generation to zero instead of letting families establish themselves over time by building on the sacrifice and efforts of the parents. The current level of taxation, even though it's been recently, "graciously" increased, greatly extends th…

An estate of 5 million puts you well into the upper echelons of society. I have little sympathy for those who the estate tax hits

My grandmother's uncle left an estate over five million.

She then burned through the entirety of her share paying for her stay in a nursing home when she couldn't speak or wipe her own ass, so the taxpayers didn't have to.

Everything's not as simple as you think.

Re: Why Inequality Matters

#119

Post by Kalium »

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…

This is why a tax on capital is both easier and less regressive. It avoids subjective value judgments on what's "good" or "bad" consumption.

Re: Why Inequality Matters

#120

Post by humanrebar »

ska wrote: post #87

"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 t…

> 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.

But 10 out of the top ten did not have billionaires for grandparents. The Kochs and Waltons are second-generation billionaires. They're not the product of hundreds of years of steadily accumulating wealth. So there's a flaw in the thesis that wealth continues to grow. There's a significant amount of churn in the ranks of the superwealthy.

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