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Why Inequality Matters

gatesnotes.com

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Re: Why Inequality Matters

#131

Post by yequalsx »

brandonmenc wrote: post #118
rtpg wrote: post #113

Earlier quoted context omitted.

An estate of 5 million puts you well into the upper echelons of society. I have little sympathy for those who the estate tax hits

My grandmother's uncle left an estate over five million. She then burned through the entirety of her share paying for her stay in a nursing home when she couldn't speak or wipe her own ass, so the taxpayers didn't have to. Everything's not as simple as you think.

I suppose you think your grandmother ought to have been able to keep the millions while having society pay for her care. Does that seem fair to you?

The estate tax issue is not in any way related to the issue of health care for the elderly.

Re: Why Inequality Matters

#132

Post by ska »

humanrebar wrote: post #120
ska wrote: post #87

"I don’t see anyone on the list whose ancestors bought a great parcel of land in 1780 and have been accumulating family wealth by collecting rents ever since." What you do see though, in the same Fortune 400 list is that 6 of the top 10 people on that list didn't build their companies (in the sense that Bill Gates did), they inherited them. I don't know how much the current crop Kochs or Waltons are responsible for t…

> What you do see though, in the same Fortune 400 list is that 6 of the top 10 people on that list didn't build their companies (in the sense that Bill Gates did), they inherited them. But 10 out of the top ten did not have billionaires for grandparents. The Kochs and Waltons are second-generation billionaires. They're not the product of hundreds of years of steadily accumulating wealth. So there's a flaw in the thes…

Does churn from super-wealthy to "merely" wealthy address Piketty's thesis?

For that matter, does it matter if the names change? Distribution of wealth skewing towards a small number of people is still inequality in the sense that Piketty is talking about, even if the names of the people change every 10 years, let alone every few generations.

In other words I think what Piketty is getting at is if there is a decay term, it has to act fast enough that the wealth is distributed broadly before it is all collected up by some other small group of people, otherwise there is little functional difference to dynastic wealth.

Re: Why Inequality Matters

#133

Post by danielweber »

brandonmenc wrote: post #95
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…

> I’m also a big believer in the estate tax As a third-generation American, I find the estate tax, even in its current form, extremely offensive, because it strives to reset every generation to zero instead of letting families establish themselves over time by building on the sacrifice and efforts of the parents. The current level of taxation, even though it's been recently, "graciously" increased, greatly extends th…

> People will say, "wow five million dollars, that's a lot!" Not really.

Yes really. I have many issues with the estate tax (and I also have many issues with not having an estate tax), but when you find yourself complaining about how little a million dollars is, you really need to stop before you lose your entire audience.

Re: Why Inequality Matters

#134

Post by foobarqux »

I can't understand how someone so intelligent can misread Piketty so badly. For example, Gates focuses on individuals in some of his critiques but Piketty is talking about classes of wealth, the constituents of which may change but, Piketty argues, whose characteristics do not.

Re: Why Inequality Matters

#135

Post by danielweber »

protonfish wrote: post #25
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…

I'm no supply-side economist, or advocate of Brave New World consumerism, but I believe that taxing the purchase of actual consumer products would not have a positive effect on the economy of the country. I believe a healthy economy is an active one. An incentive to remove money from active circulation (hoarding) could have long-term negative repercussions. And a country where the government encourages the average pe…

Why is investment "hoarding"? Money in the bank is moving around, even without the multiplier of partial reserve banking.

Re: Why Inequality Matters

#136

Post by bsbechtel »

crdoconnor wrote: post #106
bsbechtel wrote: post #92

Earlier quoted context omitted.

>That's one of the core ideologies UNDERLYING the great shift in wealth from poor to rich: that politics should have no say in wealth allocation. Please provide evidence or reasoning to back up why you think this causes money to flow from the poor to the rich.

One way: "Limit the power the government has to control the flow of wealth" is a very normal pretext for slashing taxes for the wealthy.

That's what one political party wants you to believe, and quite possibly yes, what the other political party is doing these days.

However, if you cut taxes across the board, not just for the wealthy, the concentration of wealth does tend to even out. The statement 'Limit the power the government has to control the flow of wealth' in itself does not mean slashing taxes only for the wealthy. It means the government has limited power to decide who gets what, because what ultimately ends up happening, is the government ends up taking more for itself than providing for anyone else (look at the massive unfunded liabilities in Social Security and Medicare).

Re: Why Inequality Matters

#137

Post by nemo »

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…

You can see this in action with Soros and the Koch brothers, both of whom have invested a lot of wealth to directly influence politics and social movements that further their political ideas. Even if you agree with one or the other's political goals, the fact that anyone can have that much sway over the governance of an ostensibly democratic society is a huge mess with serious risks to society and the common good.

Re: Why Inequality Matters

#138

Post by tsunamifury »

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…

I strongly disagree with this conclusion and I believe it not-so-subtly implies we should use the tax code as a form of moralization.

What about all the people who make the super-yatchs for the wealthy. Or the all the contractors employed to make the luxury towers in downtowns across the world. Tens of thousands if not millions of people directly gain (and likely from the middle and lower classes) from the spending of the lavish-lifestyler.

Who is to judge if this big-spenders behavior is somehow something we should curtail. Instead, we should fear the money hoarder, who keeps large amounts of capitol out of the market, hides it in tax shelters in Ireland, or re-invests it in ways to achieve political gain at the expense of society.

I'm not so sure philanthropy should should have a morally superior reward status in the tax code, when we can't really calculate the effects of spending enough to truly show what is most beneficial to society.

Re: Why Inequality Matters

#139

Post by johnchristopher »

e40 wrote: post #65
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…

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.

I would just like to rewrite "The poor benefit from a more balanced system." into "Everybody benefits from a more balanced system."

Re: Why Inequality Matters

#140

Post by humanrebar »

wes-exp wrote: post #30
sharemywin wrote: post #11

This is where it gets complicated for me. Gates value judges the rich person spending money on a yacht and plane. Planes and yachts are pretty complicated gadgets that employ a lot of engineers and others. The plane makers technology might even contribute to some other kind of businesses similar to the space program in the sixties and seventies. Where as tech companies sitting on piles of cash because they don't know…

Employment is all good and well, but one needs to consider: what are the second-order effects of that action? For instance, you could employ people to dig holes that serve no purpose. Or, you could employ people to build public infrastructure that continues to pay dividends over its lifetime. Buying the yacht is a little bit like digging useless holes, because it's basically a very costly form of recreation that does…

> For instance, you could employ people to dig holes that serve no purpose. Or, you could employ people to build public infrastructure that continues to pay dividends over its lifetime.

I heartily agree with this. However, you could be understimating positive secondary effects. Private space travel, for example, is subsidized in part by rich people spending on luxury goods (trips to space, hobby projects, etc.).

And besides, most of the people concerned about inequality in this thread want to see a more progressive tax that seems to be an end to itself. To be charitable, I'm sure they would like to see those taxes applied to re-distributive programs, but it's not clear to me that those programs won't also lack the "desirable second-order effects" you are looking for. In reality, taxes go to the general fund and then get spent on whatever the federal government wants to spend it on.

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