Are super-rich people just better at making money? • Hacker News Board

Re: Are super-rich people just better at making money?

#131

Post by bmitc » Thu, Dec 22, 2022, 10:03 AM UTC

lelag wrote: post #99

bmitc wrote: post #76

Earlier quoted context omitted.

The rich buy stuff, do they not? Tax those things to force realization and thus tax of unrealized wealth. Buying a second, third, fourth home? Here's your increasingly high tax and interest rate penalty. Instead of throwing up our hands with "they don't have cash", force them to realize investments into cash and deincentivize being able to keep everything hidden being investments and purchasing things with unrealized…

> Buying a second, third, fourth home? It's too easy for the ultra-rich to find loopholes in any rules. If there is a tax on homeownership, they will simply not own any home but will own some corporate entity that own the asset. See ? No secondary residence. Just an investment in a corporation that happens to home a bunch of houses.

Why should corporations be allowed to purchase homes in the first place? Remove that or heavily tax it.

Re: Are super-rich people just better at making money?

#132

Post by robertlagrant » Thu, Dec 22, 2022, 10:03 AM UTC

lelag wrote: post #99

bmitc wrote: post #76

Earlier quoted context omitted.

The rich buy stuff, do they not? Tax those things to force realization and thus tax of unrealized wealth. Buying a second, third, fourth home? Here's your increasingly high tax and interest rate penalty. Instead of throwing up our hands with "they don't have cash", force them to realize investments into cash and deincentivize being able to keep everything hidden being investments and purchasing things with unrealized…

> Buying a second, third, fourth home? It's too easy for the ultra-rich to find loopholes in any rules. If there is a tax on homeownership, they will simply not own any home but will own some corporate entity that own the asset. See ? No secondary residence. Just an investment in a corporation that happens to home a bunch of houses.

> Just an investment in a corporation that happens to home a bunch of houses.

But what's the point? If they can't get money out then it doesn't matter. The only reason houses are worth holding as an asset is public bodies stopping the creation of more housing, driving the price up. You fix that with less state interference, not more.

Re: Are super-rich people just better at making money?

#133

Post by smilekzs » Thu, Dec 22, 2022, 10:03 AM UTC

nemo44x wrote: post #32

smilekzs wrote: post #21

Earlier quoted context omitted.

One thing I've noticed consistently, is when politicians talk about "taxing the wealthy", they almost always follow that with "earning more than $xxxk a year". This is conflating wealth with income. Being within this tax bracket myself, I do not deny that I am biased, but I do hope this bullshit gets called out hard whenever someone brings up yet another underhanded measure to milk us (typical SFBay SWE) above and be…

Is this a new form of NIMBY taxation? “Tax the rich but not rich people like me!”?

You too are conflating wealth ("rich people") and income ("me").

Re: Are super-rich people just better at making money?

#134

Post by hardware2win » Thu, Dec 22, 2022, 10:03 AM UTC

Haha this example is so obvious what happens in one MMORPG game I used to play

There is hazard game dice where you have 50% chance to win

But people who run those "casinos" figured many years ago that they will use e.g 90 95% payouts

So this way the longer you plsy, the more you lose cuz even if you bet the same amount twice and win once and losr once then youre behind

Re: Are super-rich people just better at making money?

#135

Post by bmitc » Thu, Dec 22, 2022, 10:03 AM UTC

WalterBright wrote: post #101

SilverBirch wrote: post #94

Earlier quoted context omitted.

Is this really... true? I get that there's this idea in people's heads that you couldn't tax for example some incredible rare art collection, because who is to say it's true value and you damage the owner by applying such a tax burden they actually have to sell the art. But let's take a step back. Where is the real money? Bezos, Gates, Buffett, Page, Brin, Ellison, Ballmer, Bloomberg, Zuckerberg. Further down the lis…

Borrowed money is not income.

The point is to force it as such and/or tax elsewhere.

Re: Are super-rich people just better at making money?

#136

Post by vladvasiliu » Thu, Dec 22, 2022, 10:04 AM UTC

creakingstairs wrote: post #121

vladvasiliu wrote: post #100

Earlier quoted context omitted.

But as far as I understand, the stocks, and other difficult to liquidate assets, as log as you hold them in that form, are worth "nothing". You can't go buy bread with that, not even a house. At some point, you need to sell and get your local currency in exchange. That can be considered income, and taxed at that value. It doesn't matter whether you had 1M which melted to 1000 or if you bought it for peanuts and got l…

> At some point, you need to sell and get your local currency in exchange. But ultra rich people actually don’t. They can just incur debts using their wealth and use that instead.

But how are those debts paid back?

Re: Are super-rich people just better at making money?

#137

Post by ookdatnog » Thu, Dec 22, 2022, 10:04 AM UTC

dhruval wrote: post #11

This smells misleading / overly simplistic but I can’t quite quite put my finger on precisely why? Some thoughts - consensual trades are win win (you want a sandwich, I want $5 let’s trade! And we both win) - something about the model is overly simplistic, like it produces a statistical distribution that looks like extreme inequality from randomness, but lots of different sorts of distributions can emerge from aggreg…

The yard sale model doesn't attempt to model an actual economy. It's a thought experiment to counter causality bias.

Human minds tend to be biased towards causal explanations. So if we see huge wealth disparities, we're biased towards thinking that these disparities must exist for some deeper reason (often argued to be meritocracy). The model counters that thinking, by showing that, even in a very simple model with rules that seem fair to everyone, huge disparities can appear entirely at random.

It doesn't prove that the disparities we see in the real world are fully random. It invites us to question the assumption that they aren't.

Re: Are super-rich people just better at making money?

#138

Post by sam_lowry_ » Thu, Dec 22, 2022, 10:04 AM UTC

creakingstairs wrote: post #121

vladvasiliu wrote: post #100

Earlier quoted context omitted.

But as far as I understand, the stocks, and other difficult to liquidate assets, as log as you hold them in that form, are worth "nothing". You can't go buy bread with that, not even a house. At some point, you need to sell and get your local currency in exchange. That can be considered income, and taxed at that value. It doesn't matter whether you had 1M which melted to 1000 or if you bought it for peanuts and got l…

> At some point, you need to sell and get your local currency in exchange. But ultra rich people actually don’t. They can just incur debts using their wealth and use that instead.

So what? If banks will be taxed when selling collateral, debt costs will adjust accordingly and pass on to wealthy still.

Re: Are super-rich people just better at making money?

#139

Post by Yizahi » Thu, Dec 22, 2022, 10:05 AM UTC

simonswords82 wrote: post #93

bmitc wrote: post #79

Earlier quoted context omitted.

I don't think any individual should be a billionaire. There's no conceivable reason for a single person to need or have the right to be a billionaire.

I'm not saying I agree or disagree with this stance but at a practical level it's interesting to think about. Let's say life is a computer game, and once you max out at $1bn in earned wealth (presumably this includes liquid and illiquid assets such as properties, cars etc), you cannot accumulate more wealth. How does a government enforce this stance? You cannot stop say Bill Gates shorting Tesla and earning millions…

You make "almost illegal" financial activities really illegal in the law, prosecute people, and I suspect that 90% of the problems will disappear automagically. Number of people who can become billionaires without committing borderline illegal and completely illegal activities are vanishingly small I suspect, probably only founders of megacorporations and those are often doing illegal stuff too to stay ahead. USA is an outlier probably as far as honest successful corporations go, but in other countries if you are a top100 Fortune person you are likely a criminal too. In my country for sure. Energy - illegal oligopoly, metallurgy - illegal oligopoly, animal farming - illegal oligopoly, etc. The number of illegal schemes happening in the big corps in my country is staggering.

Re: Are super-rich people just better at making money?

#140

Post by 988747 » Thu, Dec 22, 2022, 10:05 AM UTC

danny_codes wrote: post #111

an-allen wrote: post #106

Earlier quoted context omitted.

This all presupposes that the government is an efficient user of capital, when its pretty clear its not. Heavy taxes on the rich, means that capital investments that a rich person might finance, become government programmes and bureaucracies. Theres obviously a sweet spot here - but rich folks are good at creating capital and governments are notorious for wasting it. Now in the US I probably don’t have to tell you wh…

Most of our money does not go to the military. Defense spending is about 700b per year, while the budget is over 4t. The government doesn't need to handle capitol allocation. We can simply shift the tax burden upwards. Poorer people get reduced tax, rich people get more.

Poor people already pay next to nothing in taxes - the bottom 60% of society, making less than $50k only contributes 7% of total tax revenue from income taxes, while 0.3% of those making more than $1M per year contributes 27%. [1]

I think the US has pretty good revenue structure in that regard. In my country 62% of federal budget comes from sales taxes (e.g. 23% VAT), which disproportionately affects poor people.

[1] https://www.stlouisfed.org/on-the-economy/2017/january/feder...