More than half of all private wealth has been inherited in most of Europe • Hacker News Board

Re: More than half of all private wealth has been inherited in most of Europe

#111

Post by capisce » Mon, Dec 18, 2017, 7:11 AM UTC

wycs wrote: post #86

ekianjo wrote: post #72

Earlier quoted context omitted.

Relevant part: > If a parent's income had no effect on a child's opportunity for future upward mobility, approximately 20% of poor children who started in the bottom quintile (in the bottom 20% of the US range of incomes) would remain there as poor adults. At the other end of income spectrum, if children were born into wealthy families in the top 20%, only 20% would stay in that top income category if their mobility…

This would all be true if we were all genetically identical. However psychometrics has proven and now cognitive genomics is confirming that valuable mental characteristics have very large genetic components. Intelligence is the capacity to achieve your goals. Intelligence is highly heritable. A goal of most people is to become wealthy. So people who acquire wealth tend to be much more intelligent than average, as wea…

> Wealth distribution would not fix this.

But a certain amount of wealth distribution could improve the life quality of those born with less potential.

Re: More than half of all private wealth has been inherited in most of Europe

#112

Post by jogjayr » Mon, Dec 18, 2017, 7:14 AM UTC

marxwasright wrote: post #41

walshemj wrote: post #31

Earlier quoted context omitted.

I think they where talking not about tbills, guilts or consols but riskier shares

The rise of passive investment strategies has neatly proved that no skill and little luck is required to grow existing capital in the modern society.

OTOH passive investment will only track the market and return an average of 7-10%. Compared to that small-time landlording (which I define as 1-10 units), a popular side-income stream for many working professionals, returns 10-20% in return for higher risk and volatility (you could get bad tenants or have units go vacant).

Also since passive investment requires "no skill and little luck" it's one of the few entry routes into the capital-owning class available to working-class people and middle-class professionals. Anyone can buy an ETF for a couple hundred dollars. You don't need a hot stock tip or a insider lead on an undervalued property. So I'm not sure why one would want to start treating unearned income exactly the same as earned income at the precise point in history that we've learned about the magic of passive investment.

Re: More than half of all private wealth has been inherited in most of Europe

#113

Post by dang » Mon, Dec 18, 2017, 7:41 AM UTC

Johnny555 wrote: post #104

dang wrote: post #85

Earlier quoted context omitted.

I'm sure you were just making polite conversation but it's maybe not so great to follow two pointer hops to someone's personal details. People have many reasons for being sensitive about these things. I've never thought about it before, but your comment made me realize that maybe the best thing is to feel free to mention what's in someone's HN profile but leave it at that. On the other hand, I broke that myself only…

Those that are sensitive about such things shouldn't post such details online, and having that veil of secrecy penetrated and posted publicly might be a wakeup call. There's no point in protecting someone's imaginary privacy, if their personal details are a google search away, they have no privacy and if that's important to them, they shouldn't post their private details in their profile.

Those are good points too, but it's so much more complex than that. To see how, try the thought experiment of someone digging up absolutely everything that can be found online about you and then posting it as a dossier in some place you care about. If that doesn't make you shudder, you're a rare one.

Re: More than half of all private wealth has been inherited in most of Europe

#114

Post by aaronblohowiak » Mon, Dec 18, 2017, 7:55 AM UTC

closeparen wrote: post #94

gbacon wrote: post #54

Earlier quoted context omitted.

How then is it possible that some four in five American millionaires inherited no more than ten thousand dollars, according to The Millionaire Next Door by Thomas Stanley?

A median-income household owning a median-priced house and making the standard 15% 401k contribution will clear "millionaire" by retirement age, easily.

And yet “Fifty-seven percent of Americans don't have enough cash to cover a $500 unexpected expense”. We suck at saving as a country.

Re: More than half of all private wealth has been inherited in most of Europe

#115

Post by crdoconnor » Mon, Dec 18, 2017, 7:59 AM UTC

jogjayr wrote: post #17

crdoconnor wrote: post #10

Earlier quoted context omitted.

Most of this wealth probably has nothing to do with merit. For every Steve Jobs there's a whole bunch of people who did nothing more than sit on property that appreciated in value and yielded rents. The tax system seems to prefer this to actually earning money for some reason.

> The tax system seems to prefer this to actually earning money for some reason. The tax system favors unearned income over earned income to adjust for risk. If you work a job you're guaranteed to be paid for the hours you worked (assuming an honest employer). Investments have no guarantees and you could lose all the money you put in. There's an argument to be made that the top tax rate for unearned income is too low…

So you think that siphoning wealth through gambling deserves better tax treatment than creating it through working?

Re: More than half of all private wealth has been inherited in most of Europe

#116

Post by closeparen » Mon, Dec 18, 2017, 7:59 AM UTC

aaronblohowiak wrote: post #114

closeparen wrote: post #94

Earlier quoted context omitted.

A median-income household owning a median-priced house and making the standard 15% 401k contribution will clear "millionaire" by retirement age, easily.

And yet “Fifty-seven percent of Americans don't have enough cash to cover a $500 unexpected expense”. We suck at saving as a country.

Most of the value contributing to millionaire net worth is going to be in 401ks and home equity, neither of which you could reasonably access to pay a $500 expense.

It would be pretty weird to have <$500 in checking at the same time as 5-6 figures in retirement + home equity, but possible. It helps that 401k is a payroll deduction and there's really no bargaining with yourself on whether to pay the mortgage this month (whereas it's easy to splurge instead of saving extra cash).

Re: More than half of all private wealth has been inherited in most of Europe

#117

Post by fgjjgutjvnu » Mon, Dec 18, 2017, 8:14 AM UTC

Everything belongs to somebody, and everybody dies eventually, converting their property into "inherited property". So isn't this equivalent to saying "more than half of things belong to private people", or the other way round, "almost half of everything belongs to governments"?

Re: More than half of all private wealth has been inherited in most of Europe

#118

Post by fgjjgutjvnu » Mon, Dec 18, 2017, 8:16 AM UTC

closeparen wrote: post #116

aaronblohowiak wrote: post #114

Earlier quoted context omitted.

And yet “Fifty-seven percent of Americans don't have enough cash to cover a $500 unexpected expense”. We suck at saving as a country.

Most of the value contributing to millionaire net worth is going to be in 401ks and home equity, neither of which you could reasonably access to pay a $500 expense. It would be pretty weird to have <$500 in checking at the same time as 5-6 figures in retirement + home equity, but possible. It helps that 401k is a payroll deduction and there's really no bargaining with yourself on whether to pay the mortgage this mont…

But if you have that net worth, wouldn't it be easy to get a loan over 500$ from a bank?

Re: More than half of all private wealth has been inherited in most of Europe

#119

Post by onion2k » Mon, Dec 18, 2017, 8:20 AM UTC

contingencies wrote: post #69

The Chinese have a saying 富不过三代 which means "wealth does not survive three generations".

The wealthiest people here in the UK tend to come from families who were given estates by the crown in the 14th and 15th centuries. That saying may be true in China, but it isn't universal.

Re: More than half of all private wealth has been inherited in most of Europe

#120

Post by isostatic » Mon, Dec 18, 2017, 8:24 AM UTC

jopsen wrote: post #59

isostatic wrote: post #29

Earlier quoted context omitted.

Why do you tax income? That's a disincentive to be productive, that's not good - we want people to be productive. Taxing wealth is basically paying a rent to the society that allows that wealth to exist. Your land in manhattan is only worth $10m because society hasn't gone all Syrian. Your copyright holding over your film is only worth anything because we don't let people freely copy it. When the wealth is owned by t…

Interesting idea.. so instead of taxing income, you would tax wealth carried from one year to another... That would massively discourage saving. I'm not sure that's great in the long run. In the short run I'll probably lead to massive growth as every goes to burn their dollars on something :) (Arguably it might be a low tax, might even limited to people with a lot of wealth)

saving is a way of trusting tomorrow's generation to repay you for work you did today. If tomorrow's generation don't feel part of that society then why do they owe you a living? You're only as valuable as how productive you are today, your savings are worthless.

However under your assertion, you are already massively discouraging productivity, by taxing it so high.

However rather than taxing monetary wealth via inflation (which targets those who can't hide their wealth in other assets), you tax the assets that are impossible to avoid, namely copyright protection (charge an exponential fee to keep the work in copyright) and land (if you own $10m of land, and your neighbour owes $100k, you should be paying 100 times more for the upkeep of that land, and you can't hide that off shore).

This means tax on dividends goes to zero, tax on productivity goes to zero, and it encourages people to invest and work, not sit there collecting money from just being rich.