Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Are super-rich people just better at making money?

pudding.cool

Post reply on HN
Print view View original

141–150 of 587 posts

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

#141

Post by raverbashing »

Yizahi wrote: post #109
bawolff wrote: post #47

Earlier quoted context omitted.

As a practical matter, it is very difficult to tax wealth (and even harder to do it fairly.) I don't think the issue is lack of will but lack of plan that actually works in the face of assets with unclear value and/or difficult to liquidate. And this doesn't just affect the ultra rich but people like SWE too. How much is the stock you have in the non-public company you work at really worth? SWE are probably one of th…

It is reasonably easy. Step 1. The country creates a law forbidding any financial interactions with "offshore" countries (list is populated manually by lawmakers) and also with companies working with such offshore companies (shell intermediaries) in "good" countries. Step 2. Country forbids its citizens from owning any assets or be incorporated in the same "offshore" countries. Step 3. Blanket ban of cryptotokens. St…

Yeah, that's a very easy way... Of making all your modestly rich people close shop and leave

> forbidding any financial interactions with "offshore" countries

And what do you think "offshore" means? This is TikTok levels of financial naivety

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

#143

Post by verisimi »

bmitc wrote: post #3

To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…

As if the wealthy have never thought of ways to hide their money... The best you'll do is tax those who are actually turning up to get a salary. Ie you will tax people who arguably might be producing something, as opposed to the inter-generational, rent-seeking families that own so much of our world.

If you ask me, and you accept overt governmental control of everything, the best thing to do would be a system of openess about ownership, so that ownership of everything can be seen by everyone - with no murky legal instruments.

If you have the information about who owns what - and everything is owned by people, individuals, even if they hide behind legal and corporate instruments - you can then consider addressing what would be an equitable may to proceed.

My guess would be that something ludicrously minor like a 10% wealth tax on the top 0.01% of wealth owners, would cover us indefinitely.

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

#144

Post by sam_lowry_ »

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?

They do not have to be. For instance, it is common to never completely pay off the mortgage in Switzerland to avoid one-off taxation. Instead, the eventual taxes are included in the cost of the debt.

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

#145

Post by Yizahi »

robertlagrant wrote: post #128
Yizahi wrote: post #109

Earlier quoted context omitted.

It is reasonably easy. Step 1. The country creates a law forbidding any financial interactions with "offshore" countries (list is populated manually by lawmakers) and also with companies working with such offshore companies (shell intermediaries) in "good" countries. Step 2. Country forbids its citizens from owning any assets or be incorporated in the same "offshore" countries. Step 3. Blanket ban of cryptotokens. St…

What will be the downsides of these moves?

If any single country will try this alone - devastating. For the country :) . If USA alone will try it - maybe it will work, idk. If USA plus EU plus major Asian economies will do it collectively - it will work.

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

#146

Post by Beldin »

an-allen wrote: post #106
bmitc wrote: post #3

To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…

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…

> but rich folks are good at creating capital and governments are notorious for wasting it.

There is more than a little nuance here:

- governments are notorious for being called out on supposed inefficiencies.

Too often, it turns out that there were very good reasons for those inefficiencies, but the criticasters forgot the lesson.

- "rich folks are good..."

I wouldn't know. Superrich folks are good at manipulating the system and extracting wealth from others, that I can believe. We see that happen often enough - the superrich lose money if they were to pick up a 100 dollar bill (they make more money in that time if they work), while their employees have to pee in water bottles or are exploited in other ways.

I strongly doubt that the superrich are better than governments at creating capital for anyone else but themselves in an ethical, human-respecting manner.

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

#147

Post by s3000 »

If resources would be distributed evenly, would society be better?

Who would make better allocation decisions than some arbitrary elite that happens to be rich? Without those riches, where is the surplus money that can be invested into innovations? Right now, the masses could pool some small amounts of money like $10 and have millions and billions to start new companies.

There was 'Ask HN: How might HN build a social network together?'[1]. I am not aware that something has been started, despite all the skills most likely being available. Without somebody fronting the money to make even more money, how can people be motivated to create progress?

[1] https://news.ycombinator.com/item?id=33999296

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

#148

Post by orcanwe »

bmitc wrote: post #127
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…

> This all presupposes that the government is an efficient user of capital, when its pretty clear its not. It's not a presupposition. That's a separate discussion and should also be improved. We shouldn't say, "oh, we're bad at redistribution, so let's not".

You’re assuming an infinite perfectibility of human nature. The problem with government planning is that it’s removed from the best, local information and inherently has broken incentives.

By the best, local information I mean that in the market, the people with the need for the good or service, and the people who bear the cost of providing it, are the people with the best information and also the ones making the decision to purchase and produce and at what price. The market automatically aggregates this information and produces a price level, which creates the incentive to produce and purchase the appropriate amount of something.

By broken incentives I mean the entire body of work that is public choice theory. Don’t think about government agents as benevolent actors. They are on the whole not good or bad, just about as self-interested as anyone else. They don’t make decisions based on what produces the best outcomes for the public. They make decisions based on what advances their own immediate and long term interests as individuals and social groups. Democracy tries to align those but it doesn’t do a very good job since most decisions do not rise to public political issues, the public can only have a limited understanding of, and elections are too blunt an instrument for adjudicating, the propriety of thousands or millions of public sector decisions.

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

#149

Post by kevin_nisbet »

Regardless of the rest, I like how this article shows the relationship of it's not the same bet to get back to where you started. I've observed very similar mistakes a number of times in how that % relationship works.

It really reminds me of Eve Online. It's been a many years, but once upon a time when I did play it, we were looking at different sensor jammers. And the ones that looked like the worst were actually the best, because they couldn't be countered. Most worked like a +1/-1, but one applied as a fraction. So if the jammer cut a value by 50%, the counter to it added 50%. But adding 50% doesn't get you back to where you started, the opposite increase is 100%. 20 - 50% = 10. 10 + 50% = 15, not 20.

Another one is for the property I live in, we're pushing back on the government about losing a subsidy of ~33%. The property management company, managers, accountants kept sending letters saying this will cause prices to go up 33%. And I keep having to explain that the notices are wrong, removal of a 33% subsidy increases prices by 50%, not 33%.

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

#150

Post by spinchange »

robertlagrant wrote: post #124
danny_codes wrote: post #111

Earlier quoted context omitted.

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.

> Poorer people get reduced tax, rich people get more. This already happens. Many people either don't pay tax, or pay less tax than they cost. > The government doesn't need to handle capitol allocation. Then who will spend the tax money?

The working poor pay into FICA which is a greater percentage of their cash flow. They get it back upon annual tax reconciliation. The same entitlement programs nonetheless have lots of unfunded liabilities so the money has already been allocated even if it's not currently "there" -- 'The Rich' are beneficiaries of entitlement spending too.
Post reply on HN