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Why Inequality Matters

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Re: Why Inequality Matters

#371

Post by kchoudhu »

nhaehnle wrote: post #266
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. To really get to the truths behind this opinion, it is important to distinguish one's political goals from the politically implemented policies in pursuit of those goals. I fully agree with you that the average person is…

Bill Gross is incompetent? The guy who used to manage a 2 trillion dollar bond fund? I can think of many economically incompetent people, but Bill Gross is not one of them. A terrible manager, yes, but not incompetent.

Re: Why Inequality Matters

#372

Post by Matumio »

jeffdavis wrote: post #365
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…

I disagree, but I upvoted because I think it perfectly highlights the real difference of opinion. When you say "disarm", you really mean "disarm all but the state". That is very scary to any libertarian-leaning people, even if you are using the word figuratively. It makes sense only if you if you believe the government is so nearly perfect that other influence is counterproductive. Imagine if only the government had…

Collected taxes don't necessarily have to be spent by the government. Have a look at the idea of an unconditional basic income.

Re: Why Inequality Matters

#373

Post by capisce »

k-mcgrady wrote: post #300
nhaehnle wrote: post #295

Earlier quoted context omitted.

That's how I interpret it as well, though I don't see how one would implement this. Would we all have to start collecting all our receipts, even for private purchases? That seems like a headache...

True, a system would need to be put in place. Would it be enough to just look at money going out of your bank account and report that? I guess there would be irregularities if you were sending money as a gift or to charity.

The system would also need to be global, through international cooperation - otherwise one who spends the same amount in one country would end up in a higher tax bracket than one who spends the same amount divided between two countries.

Re: Why Inequality Matters

#374

Post by dragonwriter »

nemo wrote: post #348
webXL wrote: post #184

Earlier quoted context omitted.

Their political ideas aren't their own, and I highly doubt they would put so much of their resources into them if there wasn't a large base of support there already. Government spending in the US as a percentage of GDP has almost flatlined since the early 90s. There was a spike recently, but the previous growth wasn't really sustainable with the quasi-free-market economy everyone (at least in the US) seems to prefer.…

Many people have various political views. Allowing people with huge buckets of cash to use that cash to gain increased representation is fundamentally wrong. A representative government is supposed represent all of its constituents equally, but with the current pay-to-play/pay-to-propagandize/pay-to-astroturf regime it doesn't. We can't actually say with any degree of certainty that that the buckets of cash influenci…

> A representative government is supposed represent all of its constituents equally

Supposed by whom? Certainly, even ignoring ways in which the practice deviates from the overt design, the US government doesn't even pretend to be structured in a way in which all citizens have equal representation.

Re: Why Inequality Matters

#375

Post by e40 »

malvim wrote: post #196
e40 wrote: post #65

Earlier quoted context omitted.

Piketty does not consider philanthropy as a means to correct some of capitalism's imbalances Oh, please. The poor don't benefit from philanthropy. The poor benefit from a more balanced system. This reeks of justification.

Not sure that is entirely correct... What about funding research, for example? Isn't that philanthropy that might benefit everyone, including poor people?

That's an indirect benefit to the poor. The poor need more direct benefits to materially improve their lives.

Re: Why Inequality Matters

#376

Post by lmm »

noarchy wrote: post #236
lmm wrote: post #202

Earlier quoted context omitted.

Everything bottoms out at force; most of us consider taxation as just or more so than the way the rich acquire their money. The state is a bit more legitimate than rich individuals because it's more accountable to the people.

>The state is a bit more legitimate than rich individuals because it's more accountable to the people. That isn't necessarily a universally-accepted idea. Democratic systems have the machinery of accountability, but some of us are not completely convinced that it works ; surely not as-advertised. I know that some will regard the wealth of the rich as having been acquired by some means of trickery or even coercion. An…

Nowhere near 100%. Most people pay their taxes not because they're rationally responding to threat of force but because they think it's the right thing to do.

Re: Why Inequality Matters

#377

Post by jmckib »

tszyn wrote: post #337
jmckib wrote: post #270

Earlier quoted context omitted.

What about the common libertarian viewpoint that we should limit the scope of government so that the rich guys don't have any significant political power to hijack? This comes without the slowing of economic growth that would be caused by higher taxes on capital.

The rich don't need the government to exert influence and rig the game in their favor. For example, they can: - buy up their competitors to create monopolies - use one monopoly to build another one (e.g. "if you buy our competitor's coal, you can't use our railroad") - gain control over natural resources - collude with their competitors - abuse the legal system to kill competitors - hire marketers and fund NGOs for p…

I wasn't suggesting that we scrap the Antitrust Division of the US Department of Justice specifically. You make a good argument that we still need them. However, there are many other areas in which the government could be scaled back without incurring a robber baron scenario. Do some googling for "regulatory capture" and you'll see what I mean. Simplifying the tax code and the bureaucracy that comes with it is one good candidate.

Re: Why Inequality Matters

#378

Post by seanflyon »

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…

> we want the 1st person to have 800,000 and the remaining 200,000 to be divided among the 99

I know you are just throwing out hypothetical numbers but what kind of wealth distribution would you actually want? Wealth is already much more evenly distributed than the numbers you said you want.

http://en.wikipedia.org/wiki/Distribution_of_wealth

Re: Why Inequality Matters

#379

Post by rumcajz »

tim333 wrote: post #122
rumcajz wrote: post #63

In what way would consumption tax address capital accumulation? Also, using 1910-1940 period as an example to show that Piketty is wrong doesn't make much sense given that Piketty's data show that inequality have actually lowered in that particular period.

I guess you'd have to combine the consumption tax with a large estate tax or similar to address capital accumulation.

Capital tax is what Piketty proposes and what Gates argues with.

Re: Why Inequality Matters

#380

Post by marcosdumay »

nhaehnle wrote: post #276
AnthonyMouse wrote: post #248

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? Any time you're considering a tax system you have to consider the incentives it creates for people. If you have a "wealth tax" then we have to consider how the rich will try to avoid it. First, people will convert from savings and investm…

> Most importantly, the only way that a wealth tax is going to do what Piketty wants is if the rate is higher than the typical rate of return on capital. Note that one important reason why Piketty wants a wealth tax is that this would lead to much higher quality data on the wealth distribution (I haven't read the book, but he says so very clearly in his TED talk). > But if it's higher then the economic incentives it…

> As a final thought, the idea of using a VAT to finance a basic income is nice, but it doesn't help against wealth inequality, because poor people generally spend a much higher fraction of their disposable income on stuff on which VAT is paid.

Using VAT to finance a basic income is only useless for redistributing income if income is already well distributed[1]. Otherwise, rich people will pay the majority of it (regressive or not) and poorer people will get better off. You are right that there's always a certain income that (if rich people do really invest it all) the combination will be regressive, but it can always be made big enough that it does not matter.

Also that's ignoring all the other benefits of both the VAT and basic income, in that they are cheaper than the alternatives to administer and easier to control, offer a safety net that actually works, incentive risk taking, creates no barrier for improvement at any level...

[1] Of course, the actual numbers will depend on the VAT rate, and the amount redistributed.

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