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It’s better to be born rich than gifted

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Re: It’s better to be born rich than gifted

#111

Post by jacobolus »

cm2012 wrote: post #102
ageek123 wrote: post #98

Earlier quoted context omitted.

> Should society be allowed to try to give the poor but genetically gifted children a boost in life? Nobody’s suggesting that parent’s shouldn’t use whatever resources they have. But to a certain extent it is zero-sum. The way you boost smart poor children is by taking money from non-poor parents. So you really are suggesting that non-poor parents "shouldn't use whatever resources they have." I don't think anyone fun…

Luckily, there are massively diminishing returns to money's effect on educational outcomes and overall happiness, so a dollar taxed from the rich is worth much less to them than to the poor it is given to.

Not just educational outcomes. More money has massively diminishing returns to happiness, health, fitness, longevity, creative output, ...

The biggest constraint is often individual people’s time/attention; additional money is only slightly (if at all) helpful for the already rich.

But a little bit of money goes a long way to help people who are not eating well, don’t have a place to live, need to work 3 stressful part-time jobs to make ends meet, ...

Massive inheritances (dropping someone tens of millions of dollars or more) are one of the greatest problems in our society. The top marginal tax rate for inheritances should be 90%+, and we should be cracking down hard on all the sneaky ways people hide gajillions of dollars for their descendants. Maybe with an exception for small family farms, since presenting farmer sob stories is one of the biggest ways billionaires have figured out to market their intergenerational hoarding.

Re: It’s better to be born rich than gifted

#112

Post by bobthechef »

tomp wrote: post #52
Qworg wrote: post #13

Earlier quoted context omitted.

It is definitely inequitable. However, it is also how humans work - we want to advantage our inner group over other groups. This cuts directly to the heart of the meritocracy argument (most strongly in technology, but it exists everywhere): how can you claim that everyone is judged by their merits (directly related to how hard they work and how smart they train themselves to be) when being lucky (in genetics, in birt…

I interpret meritocracy as being judged by the outcome of your doings . If someone has IQ 10000 but spends it to dominate WoW, then... I don't see why they should be paid a lot (some other people might disagree, though). Likewise, if someone leverages their genetics, family, wealth, skills, efforts, and luck towards great outcomes (e.g. Elon Musk), then they should be rewarded, as they're meritocratically the best .…

Without splitting hairs, I think we should avoid normatives when speaking across the board about merit. For example, "should be rewarded" is a bit of an odd phrase given that the market and other factors will affect the degree of the reward. You can be a very accomplished scholar, but make very little because the market doesn't reward that kind of stuff. Plenty of things escape market reward and it is profoundly erroneous to elevate the market to some kind of supermetric of human worth or merit and reduce all valuable activity to the profitable. I certainly prefer fairness over unfairness as a general principle, but fairness has its place.

Whether luck is involved or not is of little interest to me. I think we obsess too much about money and tie it too much with human worth. In part because we like to think of ourselves as meritocratic, some of us feel compelled to justify our wealth differences to ward off the envious (plenty of that to go around). I'm not sure how you tie this into creating a "best society". I think arguments can be made that intersections of money and power/power and ambition are the most dangerous. Indeed, an argument against democratic republics is that those with a lust for power will tend to seek office and once they have it, believe they are entitled to it because they merit it as a result of their own actions. Hereditary monarchs, on the other hand, know fully well that they didn't ascend to the throne through their own efforts and that they are in a position of responsibility w.r.t. their people. (Note that most monarchies were not despotic despite the folklore because they were checked to varying degrees by tradition, the lords, the Church, etc, and were guided by advisers who brought their knowledge to the table, thus divorcing expertise from that bounded and constrained power.)

Re: It’s better to be born rich than gifted

#113

Post by SaintGhurka »

perfunctory wrote: post #78
anonymous5133 wrote: post #71

Earlier quoted context omitted.

Yup, exactly which is why the rates for capital gains are reduced. If you make the capital gains high enough the reward you get for taking the risk won't be high enough. I think it has a bigger deterrence effect with non-capital gains income. Once you start getting in the higher income tax brackets, it isn't really worth it to put in more hours for additional income when 50% of it is taken in income tax off the top.…

> reward you get for taking the risk won't be high enough. Also, as long as the tax rate is less than 100%, the reward will be higher than 0, which is what you get if you don't invest at all.

That reasoning is correct if the investment is risk-free.

But what if you are investing in stocks or corporate bonds or a broadway play or a promising health technology company like Theranos? There is a non-trivial chance that your reward will be less than 0 - and it could even be a complete wipeout. The low capital gains rate is meant to encourage people to put money at risk rather than sit on it.

Re: It’s better to be born rich than gifted

#114

Post by TheDong »

1999 wrote: post #95
TheDong wrote: post #73

Earlier quoted context omitted.

> The one thing I am positive about is that is provides evidence that wealth is actually a positive influence on education ... maybe it will help people who value education above all support pro-wealth policies like lower tax. I think a valid take away would also be "we should break this relationship such that everyone gets education, regardless of wealth and background". That seems easier to educate more people than…

One project I think is interesting is LeBron James' school. When I looked at what the biggest changes are between his school and a normal school, it all looks to me like surrogate parenting -- like he is moving elements from the parenting column into the school column: meals, clothing, transportation, scholarships, literally helping the parents find jobs. My vision for what creates academic and financial success is s…

Based on that example and your support for lowering taxes, I think we may have a more basic disagreement.

I think good societal change, whether it's improving the quality of the life of the ghetto, or whether it's improving education, is better driven by the government than by rich people taking pity on the rest of us.

LeBron's experiment is laudable, but a sustainable solution will come from the government, which is the only entity that can truly direct the money of the entire country (via taxes).

Whether the true problem lies in education or environment, I see a significantly higher tax rate on the wealthy as the easiest way to sustainably improve our situation.

Re: It’s better to be born rich than gifted

#115

Post by dahart »

ageek123 wrote: post #98
dahart wrote: post #79

Earlier quoted context omitted.

> Should parents be allowed to try to give their children a boost in life? Should society be allowed to try to give the poor but genetically gifted children a boost in life? Nobody’s suggesting that parents shouldn’t use whatever resources they have. The question is what we should do as a society with all the potential we’re wasting. If every dollar we spent on boosting smart poor children yielded two dollars back to…

> Should society be allowed to try to give the poor but genetically gifted children a boost in life? Nobody’s suggesting that parent’s shouldn’t use whatever resources they have. But to a certain extent it is zero-sum. The way you boost smart poor children is by taking money from non-poor parents. So you really are suggesting that non-poor parents "shouldn't use whatever resources they have." I don't think anyone fun…

> But to a certain extent it is zero-sum.

It is not zero-sum, there is not a fixed amount of wealth in either the US economy nor the global economy. If we educated everyone, and everyone with potential reached their potential and contributed to the economy, we can all have more wealth. It’s not a requirement that someone lose, and this is what I meant by a return of two dollars for every dollar spent.

> The way you boost smart poor children is by taking money from non-poor parents. ... how much redistribution is appropriate...

In practice, we could fund university education for all in the margins of what we willingly spend on the military or several other programs, people have been pointing this out for decades. It doesn’t have to be a change in taxation for anyone, nor does it need to come from “non-poor” disproportionately.

But, larger picture, I find it ironic that you use the word redistribution with respect to the rich, but not with respect to the poor. Where does rich people’s money come from? And if you’re going to worry about rich people funding social programs, how about also tallying the benefits they get from national infrastructure that poor people also have to pay for?

Re: It’s better to be born rich than gifted

#116

Post by sokoloff »

perfunctory wrote: post #76
anonymous5133 wrote: post #71

Earlier quoted context omitted.

Yup, exactly which is why the rates for capital gains are reduced. If you make the capital gains high enough the reward you get for taking the risk won't be high enough. I think it has a bigger deterrence effect with non-capital gains income. Once you start getting in the higher income tax brackets, it isn't really worth it to put in more hours for additional income when 50% of it is taken in income tax off the top.…

I am paying 52% income tax rate in the upper bracket. I doesn't stop me from trying to increase my income. Clarification - I am not making any claims as to whether I support this tax level or not. I am just saying it doesn't discourage me from trying to get ahead.

For my own account, I pay a similar marginal rate (my state tax is slightly lower than yours, but all in I’m at 50-ish percent).

That distorts my willingness to employ lower skilled help. I change my own brakes because the $250 in labor/markup that I might have to pay costs me $500 to earn. If I don’t have a productive way to earn more than $500 in exchange for the small time savings, my family is better off with my changing brakes than working on something else and a mechanic doesn’t get 2.5 hours of pay and some shop loses out on their cut. Same story for lawn care and other tasks that could easily help support employment of some workers.

Re: It’s better to be born rich than gifted

#117

Post by Spooky23 »

jacobolus wrote: post #111
cm2012 wrote: post #102

Earlier quoted context omitted.

Luckily, there are massively diminishing returns to money's effect on educational outcomes and overall happiness, so a dollar taxed from the rich is worth much less to them than to the poor it is given to.

Not just educational outcomes. More money has massively diminishing returns to happiness, health, fitness, longevity, creative output, ... The biggest constraint is often individual people’s time/attention; additional money is only slightly (if at all) helpful for the already rich. But a little bit of money goes a long way to help people who are not eating well, don’t have a place to live, need to work 3 stressful pa…

Nah. Rich farmers deserve little sympathy. The traditional farm evokes by pictures on milk cartons and politicians has been dead since the 80s.

Pick a number around the 80th percentile of 401k balance at age 70 and tax it at 50%, then go up to 95%.

The kickback to this modern gilded age is going to be brutal.

Re: It’s better to be born rich than gifted

#118

Post by tomp »

bobthechef wrote: post #112
tomp wrote: post #52

Earlier quoted context omitted.

I interpret meritocracy as being judged by the outcome of your doings . If someone has IQ 10000 but spends it to dominate WoW, then... I don't see why they should be paid a lot (some other people might disagree, though). Likewise, if someone leverages their genetics, family, wealth, skills, efforts, and luck towards great outcomes (e.g. Elon Musk), then they should be rewarded, as they're meritocratically the best .…

Without splitting hairs, I think we should avoid normatives when speaking across the board about merit. For example, "should be rewarded" is a bit of an odd phrase given that the market and other factors will affect the degree of the reward. You can be a very accomplished scholar, but make very little because the market doesn't reward that kind of stuff. Plenty of things escape market reward and it is profoundly erro…

"Should be", "best society", "meritocracy" etc - I used all of these in the sense of my ideal world, not the actual one. Feel free to critique either the concept of meritocracy (in an ideally meritocratic world), or the current society, but please don't combine the two, saying "meritocracy is bad because markets don't reward the best academics" or something similar, that simply a logical fallacy.

This is a frequent criticism that is IMO completely off base. Nobody is saying that this world is particularly meritocratic (although I think Western-style democracy+capitalism+markets is experimentally the most meritocratic system ever realised).

Re: It’s better to be born rich than gifted

#119

Post by sokoloff »

TheDong wrote: post #73
1999 wrote: post #41

I think this article sets up the paper against two incorrect worldviews: 1. America is a genetic meritocracy -- you achievement is based on your potential. My interpretation of "traditional" American values is more focused around hard work, toughness, and foresight ... this sort of thing: https://www.trumanlibrary.org/lifetimes/farm.htm . I'm pretty sure the idea that your academic performance determines your place i…

> The one thing I am positive about is that is provides evidence that wealth is actually a positive influence on education ... maybe it will help people who value education above all support pro-wealth policies like lower tax. I think a valid take away would also be "we should break this relationship such that everyone gets education, regardless of wealth and background". That seems easier to educate more people than…

My observations are that the problems with the public schools in poor neighborhoods are much more neighborhood and family related than money-for-schools related. Sure, more money might help some, but you’re not going to turn a currently terrible school district into a model one with school money alone.

Parents have at least 3x as much time and probably a greater ratio of impact on education than the school does.

Re: It’s better to be born rich than gifted

#120

Post by TheDong »

1999 wrote: post #99
perfunctory wrote: post #49

Earlier quoted context omitted.

I never really understood why lower tax is pro-wealth. What does it really mean? I am not trolling, I am really curious. Let's say I see some opportunity to grow my wealth, am I going to look at the current tax level and if it's above certain threshold I am just gonna say screw it, I am not taking it?

I'm not really considering incentives. I think most people will basically spend their whole lives working, even if you take half their money and throw it down a hole -- maybe especially even if you do that. To increase wealth the lower tax will have to mean more money under the control of the individual. It doesn't guarantee savings and investment but it makes it possible. For the portion that is taxed, you don't con…

One problem you may be encountering with your phrasing is that you aren't distinguishing between two very different things:

1. A lower tax for everyone, including the super-rich.

2. A lower tax for the poor/middle-class, but a progressive and higher tax for the rich.

The first, lowering the tax-rate for everyone, only really helps the super-rich in the first place. The poor currently pay relatively few taxes. Lowering the tax-rate across the board will result in the rich taking home a larger absolute increase in wealth, so it will shift further spending power to the rich.

The second is a common enough socialist talking point, and if that's what you mean to talk about, saying "lower taxes" is a terrible way to do it and will put socialists against you.

I don't really see how you think lowering the tax rate will increase individual wealth for anyone not already doing well. If we reduce the tax rate, that means public transit, healthcare, and schools (all heavily tax subsidized) will suffer, and any change in those disproportionally impacts the poor.

I know you're not literally saying "fuck the poor, they pay negligible taxes now, so let's cut taxes and raise their healthcare costs by crippling the government", but talking about cutting taxes across the board really isn't far from saying "give the wealthy lots more money, the poor a tiny bit more money, and cut funding on social safety nets that only help the poor."

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