Why Inequality Matters • Hacker News Board

Re: Why Inequality Matters

#191

Post by crdoconnor » Thu, Oct 16, 2014, 4:13 PM UTC

bsbechtel wrote: post #136

crdoconnor wrote: post #106

Earlier quoted context omitted.

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…

>However, if you cut taxes across the board, not just for the wealthy

Another pretext/excuse for slashing taxes on the ultrawealthy.

>the concentration of wealth does tend to even out.

Except this was tried and that's not actually what happened.

Re: Why Inequality Matters

#192

Post by bsbechtel » Thu, Oct 16, 2014, 4:14 PM UTC

digikata wrote: post #165

Htsthbjig wrote: post #111

Earlier quoted context omitted.

"The risk with a powerful government that can do this is it can be bought." A government can be bought?, your implicit assumption is that a government powerful enough will serve the interest of others and this is bad. The problem for me is that a government powerful enough will serve their OWN interest, the personal interest of the people in power, and this is bad. Part of my family comes from a former communist coun…

I think my concern is that if the power structure is an Oligarchy, it matters little if the label on the government structure is Communism, or Democracy. The worry from increasing inequality in the west is that we are approaching something like the strict power structure of an old communist country, only from the other direction. E.g. the legal system in America seems to apply unevenly to different classes of people.

I would agree with this. I've often held the view that it hasn't been Democracy that has made our country great, but it has been the legal structure that has limited the concentration of power to any group or individual.

There have been a great many Democracies that have failed (although percentage-wise, I would guess they are on the whole more successful than other governing structures throughout history).

I agree that today the legal system today doesn't seem to apply fairly. I don't know history well enough to know if this was the case in the past.

Re: Why Inequality Matters

#193

Post by bsbechtel » Thu, Oct 16, 2014, 4:16 PM UTC

sp332 wrote: post #186

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.

When the government doesn't have a say in wealth distribution, it can't act to correct gross inequality.

You're implying that government is the only mechanism which can act to correct gross inequality, and also leaving out the fact that government has the power to exacerbate it.

Re: Why Inequality Matters

#194

Post by jchrisa » Thu, Oct 16, 2014, 4:17 PM UTC

astazangasta wrote: post #166

radmuzom wrote: post #80

Earlier quoted context omitted.

Great comment. Also, those of us who fight against inequality are not fighting for equality at all. What we say is simple - if you have a million dollars and 100 people to share it - rather than 1 person have 990,000 and the remaining 10,000 divided among 99 we want the 1st person to have 800,000 and the remaining 200,000 to be divided among the 99. That way, the first guy can have his $5,000 wine without paying any…

Don't speak for everyone. Personally I think the idea that we need wealth concentration at all is bogus. Investment is already performed by teams of skilled experts on behalf of the wealthy. We don't need individuals who simply perform the function of owning things and reaping the benefits for literally doing nothing. There are better ways we could be allocating capital. We also don't need wealth concentration to enc…

To my mind the fundamental problem is that we insist on placing everyone on the same number line. In real life some folks may be more envious of Bill Gates while others are more envious of Joe Armstrong. In reality total ordering, or even partial ordering does not correspond to our intuitions. Real networks present a different partial ordering to each node in the network, why not build a crypto currency that exhibits this property?

Re: Why Inequality Matters

#195

Post by loumf » Thu, Oct 16, 2014, 4:18 PM UTC

Marazan wrote: post #169

brandonmenc wrote: post #95

Earlier quoted context omitted.

> 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…

"Double tax" is a phrase that needs to die in a fire due to it's preposterously disingenuous use. I work, I get paid, my money is taxed. I buy a chocolate bar, the sale is taxed The money that is spent on the chocolate bar goes in part to the shop who makes a profit (that is taxed) and to the company that made the chocolate bar who make a profit (that is taxed). The company pays the worker that made the chocolate bar…

Also, in this case, it isn't double-taxed. The heirs never paid tax on it. It's very likely that estates of that size have tax-deferred parts or insurance.

Finally, there are many incorrect statements in the description of the estate tax above that would probably lead you to believe that you have to pay 40% of 5.3m, which is not true

1. You get deductions (like outstanding mortgages and medical bills)

2. You pay the tax on the net OVER 5.3m.

So, in the case described above, the estate tax would be $0.

Re: Why Inequality Matters

#196

Post by malvim » Thu, Oct 16, 2014, 4:19 PM UTC

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.

Not sure that is entirely correct... What about funding research, for example? Isn't that philanthropy that might benefit everyone, including poor people?

Re: Why Inequality Matters

#197

Post by icebraining » Thu, Oct 16, 2014, 4:20 PM UTC

astazangasta wrote: post #166

radmuzom wrote: post #80

Earlier quoted context omitted.

Great comment. Also, those of us who fight against inequality are not fighting for equality at all. What we say is simple - if you have a million dollars and 100 people to share it - rather than 1 person have 990,000 and the remaining 10,000 divided among 99 we want the 1st person to have 800,000 and the remaining 200,000 to be divided among the 99. That way, the first guy can have his $5,000 wine without paying any…

Don't speak for everyone. Personally I think the idea that we need wealth concentration at all is bogus. Investment is already performed by teams of skilled experts on behalf of the wealthy. We don't need individuals who simply perform the function of owning things and reaping the benefits for literally doing nothing. There are better ways we could be allocating capital. We also don't need wealth concentration to enc…

The vast majority of productive people act in the economy for modest rewards and the hope of a middle class life.

Devil's advocate: the vast majority of productive people do the important everyday work, but don't perform major improvements in the state of the art. What about the inventors of life-changing technology? Would the vast majority of them invest years of their life in it if it only paid the same as getting a normal job?

Re: Why Inequality Matters

#198

Post by michaelvkpdx » Thu, Oct 16, 2014, 4:21 PM UTC

I appreciate Gates' analysis of Piketty, but Gates is still blind to an important point- he came from a middle-class background and therefore had enough capital to gain a footing in the world and to be able to write his initial code without worrying about the basic needs of survival.

40% of youth in the USA today do not even have that, and as such, have virtually no chance at all of being able to even play in the capitalist economy. They will be successful if they avoid homelessness and hunger, which will be a daily struggle.

Gates, Buffett, and others who claim to be philanthropists work from a point of ignorance, believing that all youth at least have their basic needs covered by this society. They are blind. Piketty at least acknowledges the underclasses.

These so-called philanthropists depend on the existence of a permanent underclass to support their "charity".

I was raised on the edges of this underclass and even today, after 20 years in the business doing quite well, I worry every day that I will soon be homeless or hungry. I have no inheritance to count on,other than debt from my family. The idea of taking a couple of months without income to make a startup is laughable- how would I eat and make my house payment? Most of the peers from my youth are on public assistance, in jail, ill, or worse. They are easy prey for the tech titans, who fill their eyes with glittery visions that make them forget their hunger and cold. This is in the Bay Area, mind you, less than 20 miles from the Valley.

Gates' idea of a consumption tax would heavily penalize these people, who have been enslaved into a consumer lifestyle by the wealthy who exercise control over their lives.

The whole "inequality" debate laments the demise of the middle class. But it never acknowledges the permanent underclass that is a necessary component of a society that can take the time for the inequality debate.

I got out, though you never lose the psychic clutches of abject poverty. Most folks never get out.

Re: Why Inequality Matters

#199

Post by paulhauggis » Thu, Oct 16, 2014, 4:22 PM UTC

Marazan wrote: post #169

brandonmenc wrote: post #95

Earlier quoted context omitted.

> 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…

"Double tax" is a phrase that needs to die in a fire due to it's preposterously disingenuous use. I work, I get paid, my money is taxed. I buy a chocolate bar, the sale is taxed The money that is spent on the chocolate bar goes in part to the shop who makes a profit (that is taxed) and to the company that made the chocolate bar who make a profit (that is taxed). The company pays the worker that made the chocolate bar…

I'm fine with not using the "double tax" phrase, as long as all taxes are included in tax arguments. I have heard here on HN that Denmark and Sweden don't have taxes that are that high..while not including all of the small taxes that you pay on a daily basis..deflating the actual tax rate to make it seem better.

Also, Companies actually contribute more in taxes than people like to admit. They pay workers' wages..and those wages include tax money that goes to the government.

Re: Why Inequality Matters

#200

Post by wes-exp » Thu, Oct 16, 2014, 4:22 PM UTC

humanrebar wrote: post #140

wes-exp wrote: post #30

Earlier quoted context omitted.

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…

All good points. I wasn't trying to suggest a solution, but merely trying to point out that job creation should not be the sole bar by which we measure the investment of capital, but that it should do something useful too — whether that investment comes from private actors, or government.