Why Inequality Matters • Hacker News Board

Re: Why Inequality Matters

#161

Post by pjc50 » Thu, Oct 16, 2014, 3:44 PM UTC

brandonmenc wrote: post #145

danielweber wrote: post #133

Earlier quoted context omitted.

> People will say, "wow five million dollars, that's a lot!" Not really. Yes really. I have many issues with the estate tax (and I also have many issues with not having an estate tax), but when you find yourself complaining about how little a million dollars is, you really need to stop before you lose your entire audience.

Yes, a pile of five million dollars is a lot. An estate worth $5M, which is then taxed at 40%, the remainder of which is distributed amongst any number of heirs, each of whom may then be obligated to pay an additional income tax on that - ends up being far less. Especially in a country where you're expected to pay for your own education, health care, and retirement.

expected to pay for your own education, health care, and retirement

In much of Europe the first two and a good chunk of the third are largely provided as public goods. Establishing a reliable "floor" standard in all three makes it much easier for people to truly stand on their own merits rather than being handicapped by parental poverty.

Re: Why Inequality Matters

#162

Post by tormeh » Thu, Oct 16, 2014, 3:47 PM UTC

forgingahead wrote: post #98

saalweachter wrote: post #42

Earlier quoted context omitted.

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…

Currently, 436 people (Reps, Senators and President) control nearly 4 trillion dollars, the budget for this year. What should we do about them?

That America's government does a poor job of representing American society is a separate problem. The way you solve that is by changing the voting system to proportional representation in both the congressional and presidential elections.

How can Americans be so upset at their political situation without even discussing ways in which to change it? Unconstructive complaints is just whining.

Re: Why Inequality Matters

#163

Post by yequalsx » Thu, Oct 16, 2014, 3:48 PM UTC

humanrebar wrote: post #142

yequalsx wrote: post #131

Earlier quoted context omitted.

I suppose you think your grandmother ought to have been able to keep the millions while having society pay for her care. Does that seem fair to you? The estate tax issue is not in any way related to the issue of health care for the elderly.

Nobody said that. It's a fair point that five million dollars isn't as much money as it seems, especially when accounting for healthcare costs. If the government took most of that money, this grandmother would have burnt through the remaining money quickly and ended up on government-assisted healthcare with much less choice about the kinds and quality of care. It's very pertinent.

It was stated that $5 million puts one in the upper echelons of society. This is a true statement. It is also true that a calamity can wipe out that amount of money. I do not believe the issues are related in that I don't think it makes for good public policy to make the taxation threshold for estate taxes to be at the calamity-proof level.

It appears to be possible from what you've said about your grandmother's situation that even if her inheritance was not taxed at all she would have still ended up using up all of her savings on care. If your point wasn't that you believed she should have been able to pass along the millions to her children while receiving care at the expense of society then I don't see how it was relevant.

Re: Why Inequality Matters

#164

Post by cylinder » Thu, Oct 16, 2014, 3:49 PM UTC

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.

Why would someone want to limit government to protecting individual rights? This doesn't make sense at all. Is the minting of money protecting some sort of individual right? What about providing healthcare for the destitute? Are roads some sort of individual right?

Re: Why Inequality Matters

#165

Post by digikata » Thu, Oct 16, 2014, 3:51 PM UTC

Htsthbjig wrote: post #111

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 coun…

I think my concern is that if the power structure is an Oligarchy, it matters little if the label on the government structure is Communism, or Democracy. The worry from increasing inequality in the west is that we are approaching something like the strict power structure of an old communist country, only from the other direction. E.g. the legal system in America seems to apply unevenly to different classes of people.

Re: Why Inequality Matters

#166

Post by astazangasta » Thu, Oct 16, 2014, 3:51 PM UTC

radmuzom wrote: post #80

saalweachter wrote: post #42

Earlier quoted context omitted.

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…

Great comment. Also, those of us who fight against inequality are not fighting for equality at all. What we say is simple - if you have a million dollars and 100 people to share it - rather than 1 person have 990,000 and the remaining 10,000 divided among 99 we want the 1st person to have 800,000 and the remaining 200,000 to be divided among the 99. That way, the first guy can have his $5,000 wine without paying any…

Don't speak for everyone. Personally I think the idea that we need wealth concentration at all is bogus. Investment is already performed by teams of skilled experts on behalf of the wealthy. We don't need individuals who simply perform the function of owning things and reaping the benefits for literally doing nothing. There are better ways we could be allocating capital. We also don't need wealth concentration to encourage people to work. The vast majority of productive people act in the economy for modest rewards and the hope of a middle class life.

The wealthy are obsolete and dangerous; we need to move on as a society from the forms that enable them.

Re: Why Inequality Matters

#167

Post by crdoconnor » Thu, Oct 16, 2014, 3:54 PM UTC

gyardley wrote: post #159

crdoconnor wrote: post #86

Earlier quoted context omitted.

>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 tw…

We've done all this before - in the early 1990s, George HW Bush passed a 10% luxury tax on yachts, private planes, furs and a few other high-value items. Maybe expensive cars, I don't remember perfectly. The government figured these measures would bring in X dollars in new revenue. It actually brought in much less, about 0.5X, as the purchasers of luxury goods changed their behavior. After the cost of unemployment be…

A) The sales pitch to get rid of the tax was super slick. No denying that. The substance was thin, though.

B) Like I said below: the function of a tax is not to bring in revenue, and counting it a success or not because it brought in above "X" amount of revenue is staggeringly dumb. Taxes are there to disincentivize undesirable behavior and clamp down on inflation, not raise funds. Governments sovereign in their own currency are not revenue constrained.

C) The effect removing that tax had on jobs was almost negligible. Look at overall unemployment during that time. Didn't budge.

>The economy's too complex for us

Hm. Apologetics for the ultra-wealthy...

Re: Why Inequality Matters

#168

Post by danielweber » Thu, Oct 16, 2014, 3:54 PM UTC

brandonmenc wrote: post #145

danielweber wrote: post #133

Earlier quoted context omitted.

> People will say, "wow five million dollars, that's a lot!" Not really. Yes really. I have many issues with the estate tax (and I also have many issues with not having an estate tax), but when you find yourself complaining about how little a million dollars is, you really need to stop before you lose your entire audience.

Yes, a pile of five million dollars is a lot. An estate worth $5M, which is then taxed at 40%, the remainder of which is distributed amongst any number of heirs, each of whom may then be obligated to pay an additional income tax on that - ends up being far less. Especially in a country where you're expected to pay for your own education, health care, and retirement.

> An estate worth $5M, which is then taxed at 40%,

That's not how the estate tax works. The first $5 million (or so) is not taxed.

> where you're expected to pay for your own education, health care, and retirement

You can pay for your kids' education directly, no estate tax involved. You can put significant amount of money into 529 savings accounts for your kids and your grandkids, effectively increasing estate tax limitations if (like most upper class) education is a place where you will expend significant resources.

Re: Why Inequality Matters

#169

Post by Marazan » Thu, Oct 16, 2014, 3:55 PM UTC

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…

"Double tax" is a phrase that needs to die in a fire due to it's preposterously disingenuous use.

I work, I get paid, my money is taxed. I buy a chocolate bar, the sale is taxed The money that is spent on the chocolate bar goes in part to the shop who makes a profit (that is taxed) and to the company that made the chocolate bar who make a profit (that is taxed). The company pays the worker that made the chocolate bar (that is taxed) Etc, etc, etc.

Transaction are always being taxed - that's how the tax system works.

Re: Why Inequality Matters

#170

Post by danielweber » Thu, Oct 16, 2014, 3:56 PM UTC

nemo wrote: post #137

saalweachter wrote: post #42

Earlier quoted context omitted.

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…

You can see this in action with Soros and the Koch brothers, both of whom have invested a lot of wealth to directly influence politics and social movements that further their political ideas. Even if you agree with one or the other's political goals, the fact that anyone can have that much sway over the governance of an ostensibly democratic society is a huge mess with serious risks to society and the common good.

Both those parties spend a lot, but you are begging the question of how much effect they have.