Why Inequality Matters • Hacker News Board

Re: Why Inequality Matters

#221

Post by malvim » Thu, Oct 16, 2014, 4:35 PM UTC

loumf wrote: post #171

marcosdumay wrote: post #82

Earlier quoted context omitted.

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…

It's not evident in Gates's review, but one of Piketty's arguments for a wealth tax is just so we can get a better picture of wealth. He goes through great lengths to try to get data on it -- if there was a tax, even a small one, we'd have far greater transparency. He then thinks that this would lead to changes -- because his data, no matter how good you think it is, is arguable and possibly wrong.

Haven't read Piketty - not sure I can handle it with the almost-insignificant knowledge I have about economy - but this argument seems very reasonable.

I've only read people writing ABOUT Piketty's book, and haven't seen anyone put it this way.

I'm from Brazil, and with the upcoming elections people have been all sorts of crazy down here, throwing around whatever "facts" they can find on the internet. One of the main points of disagreement between the two presidential candidates is income distribution, so "data" about it has been all over the news and conversations.

This kind of tax, if only to shed the faintest light on the matter, would definitely help. Even considering that the really wealthy people would not declare everything they have, there's only so much you can hide.

Thank you for this comment.

Re: Why Inequality Matters

#222

Post by IanDrake » Thu, Oct 16, 2014, 4:35 PM UTC

"Imagine three types of wealthy people. One guy is putting his capital into building his business. Then there’s a woman who’s giving most of her wealth to charity. A third person is mostly consuming, spending a lot of money on things like a yacht and plane. While it’s true that the wealth of all three people is contributing to inequality, I would argue that the first two are delivering more value to society than the third."

The problem with this line of thinking is that yachts and planes don't grow on trees. They're built and maintained by people who have jobs (typically well paid jobs) because someone with wealth is paying for it.

So, to me at least, there is only one type of wealthy person who doesn't add value and that is the hoarder.

Re: Why Inequality Matters

#223

Post by mempko » Thu, Oct 16, 2014, 4:35 PM UTC

I am going to repeat here, what I posted on hist site.

Mr Gates,

I am hoping you posted this not only to express your opinion, but to engage in conversation. And it appears you certainly are.

My criticism with your response is that philanthropy distorts economic resources through a similar mechanism that consumption does.

That is, by dictate.

I believe in the idea that people who are affected by decisions made should have a say in those decisions. This is the value of democracy.

And just like consumption of fine wine and jewelry distorts the economy to produce more of those things, philanthropy moves vast economic resources for what I would call "the pet projects of philanthropists". Typically the people affected by the philanthropic expenditures have no say. More often than not, no democracy processes take place.

A king who lives a modest lifestyle, who spends all his wealth on what HE thinks is just and good, is still a king. And I hold contempt for his arrogance.

Re: Why Inequality Matters

#224

Post by Taek » Thu, Oct 16, 2014, 4:35 PM UTC

shadowfox wrote: post #211

Taek wrote: post #177

Earlier quoted context omitted.

One thing that always bothers me about wealth distribution is that you can't simply move wealth around and expect things to get better. People who have wealth are going to be better with that wealth than people who don't. They grew up with wealthy people, have managed the wealth for a long time, have witnessed mistakes and successes, and overall have spent a lot of time contemplating wealth. If you take that wealth a…

> It's an unpopular opinion, but I don't think that everyone should have a roughly equal say in how things go. The average person isn't as well equipped to deal with large problems as the elite are The usual trouble with this sort of idea is who gets to decide the "elite" that makes the decisions. How do you prevent this group from becoming an insular clique and debar other people from similar opportunities etc. Powe…

No I totally agree. I believe that there should be an elite who makes most of the decisions, which is mostly how things are today, but I also believe that there needs to be methods of being sure that the elite are operating in everyon'es best interest, and that they will be replaced if they aren't.

There are a lot of broken incentives. If one of the elite comes to the realization that they are no longer the most useful person for the job, can we trust that they'll step down? Or will they hide this fact from everyone else and continue to enjoy their position of power?

These types of problems are not solved and it's important to keep looking for better solutions. I just don't think that "all people have equal say" is a better solution.

Re: Why Inequality Matters

#225

Post by loumf » Thu, Oct 16, 2014, 4:35 PM UTC

JoeAltmaier wrote: post #157

Omniusaspirer wrote: post #147

Earlier quoted context omitted.

It's just a different mentality towards life and entitlement- there's nothing sad about it. Hitting all your points in order: 1) 1 million dollars is a lot of money to come out of nowhere. It's simply dishonest to pretend that isn't a life changing amount for a middle class family. At the very least it's going to be like you said- modest home paid off(100-500k), car loans all paid off(50k), and student loans paid off…

That's Polyanna thinking, that an estate tax will benefit humanity. What nation do you live in? You trust the govt to spend your wealth, more than say a relative? I don't believe it. And 'wealth' isn't all gold buried in the back yard. Its also investments in businesses (either stocks or directly) as a corporation or even a proprietorship. Who runs the restaurant after you die? The government? Preposterous.

A restaurant would very unlikely be hit by estate tax. For one, it's the VALUE of the restaurant, not the revenue. What do you think the value of a restaurant typically is (especially a family one like you describe) -- probably less than 500k -- certainly no more than a million [1]. Restaurants are a fine way of distributing income to a family who work there, but the value is based on profit after that.

You could own 5 restaurants of that size and not pay estate tax.

[1] http://sellingrestaurants.com/news/how-much-is-a-restaurant-...

Re: Why Inequality Matters

#226

Post by jl6 » Thu, Oct 16, 2014, 4:35 PM UTC

yequalsx wrote: post #22

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 relying, even partially, on philanthropy to correct some of the imbalances of capitalism is that one encounters the free rider problem. There is also the issue where a very wealthy person has as their philanthropic cause something which few others think is a good choice of philanthropy. Such decisions should be made by society as a whole through their elected representatives. I know this wasn't the m…

I wonder if the free rider problem will exist in the zero-privacy everything-public world that we seem to be heading towards. Free riders respond to being outed as free riders.

Re: Why Inequality Matters

#227

Post by loumf » Thu, Oct 16, 2014, 4:36 PM UTC

icebraining wrote: post #209

loumf wrote: post #171

Earlier quoted context omitted.

It's not evident in Gates's review, but one of Piketty's arguments for a wealth tax is just so we can get a better picture of wealth. He goes through great lengths to try to get data on it -- if there was a tax, even a small one, we'd have far greater transparency. He then thinks that this would lead to changes -- because his data, no matter how good you think it is, is arguable and possibly wrong.

Does he make it clear why would the tax be needed? After all, you can impose the same information transparency requirements needed to levy the tax without actually levying it, no?

A tax does it with the force of law using the systems we already have in place. It's the cheapest, easiest, most likely to work way we have of doing this sort of thing.

Re: Why Inequality Matters

#228

Post by brandonmenc » Thu, Oct 16, 2014, 4:36 PM UTC

danielweber wrote: post #168

brandonmenc wrote: post #145

Earlier quoted context omitted.

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 l…

You're right, the first ~$5M is an exemption, and not taxed by the Federal government. My mistake.

Re: Why Inequality Matters

#229

Post by mcelroyian » Thu, Oct 16, 2014, 4:39 PM UTC

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…

While a democracy bestows each citizen with a vote, it is just not true that everyone has a "roughly equal say in how things go". Power, influence and money are all unequal. Martin Luther King had more say in "how things go" than i ever will even though we each can only cast one vote each. The authority rests in each citizen equally but power will always be unequal

Re: Why Inequality Matters

#230

Post by aidenn0 » Thu, Oct 16, 2014, 4:40 PM UTC

paulhauggis wrote: post #199

Marazan wrote: post #169

Earlier quoted context omitted.

"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…

I'm fine with not using the "double tax" phrase, as long as all taxes are included in tax arguments. I have heard here on HN that Denmark and Sweden don't have taxes that are that high..while not including all of the small taxes that you pay on a daily basis..deflating the actual tax rate to make it seem better. Also, Companies actually contribute more in taxes than people like to admit. They pay workers' wages..and…

> Also, Companies actually contribute more in taxes than people like to admit. They pay workers' wages..and those wages include tax money that goes to the government.

That's still a tax on the workers' wages, not a tax on the company. If we shifted all income tax into a payroll tax, then by your definition workers aren't taxed at all? Anything that increases the cost of employing a worker will reduce the marginal net benefit of employing that worker, which will result in either lower salaries, fewer employees or both.