More than half of all private wealth has been inherited in most of Europe • Hacker News Board

Re: More than half of all private wealth has been inherited in most of Europe

#201

Post by isostatic » Mon, Dec 18, 2017, 6:22 PM UTC

pkaye wrote: post #84

jopsen wrote: post #59

Earlier quoted context omitted.

Interesting idea.. so instead of taxing income, you would tax wealth carried from one year to another... That would massively discourage saving. I'm not sure that's great in the long run. In the short run I'll probably lead to massive growth as every goes to burn their dollars on something :) (Arguably it might be a low tax, might even limited to people with a lot of wealth)

That is kind of what we do with property taxes. Taxes on the value of the property from year to year.

And that's good - although fairer if it's only based on the value of the unimproved land, rather than the improvement. We don't want to stop people from demolishing a slum and building a nice house because the taxes will increase, we want them to discourage owning the slum, leaving it abandoned, and waiting for the land to appreciate in value.

Re: More than half of all private wealth has been inherited in most of Europe

#202

Post by vidarh » Mon, Dec 18, 2017, 7:15 PM UTC

topmonk wrote: post #167

arkh wrote: post #143

Earlier quoted context omitted.

You still benefit from your parent's network, you learn a lot more at a young age at home, you profit from their money while being raised. That's a huge difference between people from poor areas and those from even middle-class families. And that's something advantaged people don't like to think about when they use the meritocratic word: most of them benefited from huge advantages by being born in the right family. O…

Why shouldn't we concentrate most of our effort on those whos' parents succeeded? If the parents had the right mindset and the right genes to succeed, they would in all likelihood pass those onto their children. This mirrors the natural world to a great degree, and to me would seem to allow for a lot more beneficial outcomes then some arbitrary guideline of fairness. What is better, to give $100K in wealth to everyon…

The problem with this is that as long as there are so many confounding factors, there is no reason to assume that the success of someones parents was "their own" as opposed to a result of one or more of the confounding factors such as a better network, and access to better education.

If you are going to go that route a better measure would be how much upwards mobility someones parents have demonstrated proportional to their starting point.

Of course that still suffers from a number of confounding factors (e.g. we don't know how much is down to luck)

Re: More than half of all private wealth has been inherited in most of Europe

#203

Post by vidarh » Mon, Dec 18, 2017, 7:20 PM UTC

golergka wrote: post #164

vidarh wrote: post #145

Earlier quoted context omitted.

Yes, that was the point the comment was making - that going back further shows that the common assumption of a more fair distribution is wrong.

It seems that you're mixing up fair and equal again - which was the point of my comment that you may have missed.

Then you might want to make that comment instead of trying to be glib.

And no, I was not mixing up anything, I was pointing out that you were merely confirming what the comment said. That you disagree with the definitions used does not change that, given that it was clear which definitions were used, as you clearly understood yourself what was meant.

Re: More than half of all private wealth has been inherited in most of Europe

#204

Post by jogjayr » Mon, Dec 18, 2017, 7:27 PM UTC

crdoconnor wrote: post #115

jogjayr wrote: post #17

Earlier quoted context omitted.

> The tax system seems to prefer this to actually earning money for some reason. The tax system favors unearned income over earned income to adjust for risk. If you work a job you're guaranteed to be paid for the hours you worked (assuming an honest employer). Investments have no guarantees and you could lose all the money you put in. There's an argument to be made that the top tax rate for unearned income is too low…

So you think that siphoning wealth through gambling deserves better tax treatment than creating it through working?

Certainly some investment can be classed as "gambling". But not all, maybe not even most. Starting, owning, and/or running a business is working. Only it's working with no guarantee of any reward.

Again, we can argue about how high the tax rate should be on unearned income vs earned income (20% max is too low IMO). But $50k in unearned income is worth less (risk-adjusted) than $50k in earned income and should accordingly be taxed lower. Maybe $50k in unearned income is the same as $20k in earned income and similarly all the way up the earnings ladder (I don't know the exact ratio; I made these numbers up).

We often talk about survivor bias in business success; how successful people owe something to luck as much as skill or hard work (which is true, IMO). Shouldn't the variance of this success be recognized in the tax code as well?

Re: More than half of all private wealth has been inherited in most of Europe

#205

Post by wutbrodo » Mon, Dec 18, 2017, 8:12 PM UTC

woodpanel wrote: post #127

This statistic is from the DIW, a German think-tank which is known for it's left leaning/biased views. It cost them their membership in the country's "council of economic experts" once. PS: That doesn't mean that the claim is false. But you could - as is often the case - draw different conclusions from the data. E.g. that the European countries have heavy welfare and tax burdens that reduce social mobility and the ch…

> E.g. that the European countries have heavy welfare and tax burdens that reduce social mobility and the chances of earning private wealth through work.

I agree with the general principle, but the US has lower social mobility IIRC than most of the EU countries. My current model is that whatever flaws our model has are currently dominating Europeans' reduction of social mobility.

Given how much better we integrate immigrants (especially in the parts of the economy that are high growth, like urban coasts), I wonder how much US social mobility is overstated. We didn't have a lot of money when I was growing up and my sister and I are both in a pretty high percentile of income, so we'd certainly show up as a data pt of social mobility. But my parents are upper class in "the old country", they both have master's degrees, and their kids' income relative to their human capital isn't really a central example of social mobility.

Re: More than half of all private wealth has been inherited in most of Europe

#206

Post by kevstev » Mon, Dec 18, 2017, 10:38 PM UTC

smsm42 wrote: post #199

Broken_Hippo wrote: post #153

Earlier quoted context omitted.

"I imagine most people with 401k's do have access to credit. Am I wrong?" Yes. Low-paying jobs at Wal-mart and Lowes and some gas stations offer a 401k. The contributions are tiny because the checks are tiny but the company usually contributes as well. These folks aren't as likely to have access to credit. I'll put this as well: If you are looking to take $500 from your 401k outside of those groups, I'm gonna guess t…

Hmm I didn't know Walmart offered company-matched 401k. In that case, if they have contributed there at least $100 (which I think should be possible with company match if you work fulltime) for a year, there should be enough money to take a loan of $500 AFAIK. > If you are looking to take $500 from your 401k outside of those groups, I'm gonna guess things have gone horribly wrong Yes, probably, but the question was i…

They actually have the most generous 401k plan of any company I ever worked for- a dollar for dollar match up to 6% of pay, with no cap. It also vests immediately.

Re: More than half of all private wealth has been inherited in most of Europe

#207

Post by julian_1 » Mon, Dec 18, 2017, 11:22 PM UTC

crdoconnor wrote: post #140

julian_1 wrote: post #88

Earlier quoted context omitted.

Why do laws that appropriate private citizens wealth need to be justified? Well, the alternative is wonderful stuff like civil forfeiture law. Whereby a policeman without evidence or proof of criminal wrongdoing can take that $2000 in your glovebox in the name of a defacto beneficiary (the state), because on a balance of probabilities he thinks he has a better claim than you do.

>Why do laws that appropriate private citizens wealth need to be justified? What moral authority does a private citizen have to own land in Manhattan created 3 billion years ago and made valuable by the infrastructure he didn't build and community he charges rent to?

I would argue that indigenous inhabits as private citizens have the better claim by virtue of tradition and generational succession, than the 'state' as defacto beneficiary and law-maker everytime. The dispossession of native peoples by colonial governments is just another example.

Government confiscation of private wealth in the name of perceived inequality, should be examined very carefully when modern economies are structurally indebted, and budget for foreign policy objectives over domestic improvement.

Re: More than half of all private wealth has been inherited in most of Europe

#208

Post by vageli » Mon, Dec 18, 2017, 11:31 PM UTC

adamlett wrote: post #178

rorykoehler wrote: post #148

Earlier quoted context omitted.

Sorry it's not bullshit. Governments in Europe are especially renowned for the any work is better than none approach and therefore even make up fake jobs to keep their unemployed subjects busy. Protestant work ethic withdrawal is evident and drawn out. Having experienced living in numerous countries i can safely say that taxes are often (not always) poorly spent in Europe. The bureaucracy is over bearing and many job…

Governments in Europe are especially renowned for the any work is better than none approach Are they now? It used to be true in the east bloc countries when they were all communist, but it's not remotely true in today's Germany where OP lives. Having experienced living in numerous countries i can safely say that taxes are often (not always) poorly spent in Europe People say that, and I hear: Taxes are not spent the w…

> European countries are doing very well on the list of riches countries in the world as measured in GDP per capita. That would be quite surprising if their large public sector really were so horribly inefficient.

What do GDP and government efficiency have to do with each other?

Re: More than half of all private wealth has been inherited in most of Europe

#209

Post by ericd » Mon, Dec 18, 2017, 11:37 PM UTC

learnstats2 wrote: post #171

ericd wrote: post #99

Earlier quoted context omitted.

Are you a parent? I'm not sure you understand what you're playing with here.

I'm not sure what your point is. Determining someone's future on parental wealth means determining someone's future on a lack of parental wealth - and a vast majority of parents don't have meaningful wealth. So we're (society is at present) consigning a majority of children to a life of missed opportunity and missed potential. I don't see how that can be a good thing.

My point is that if you were a parent, you'd probably realize that for many parents, a large part of the reason they strive to earn is to be able to leave their children in the best possible position in life. It's not something we should be trying to "correct" by removing that ability from parents, and it's uncomfortable to have the government trying to get in between that relationship, beyond the normal inheritance taxes.

Also, parental wealth doesn't "determine their future" any more than the quality of the parents does. It's certainly a leg up, all else being equal, but it's very possible to live an enjoyable and fulfilling life without much wealth if you're willing to get outside of the focus on consumption, and personally, I'd generally take poor, loving parents over rich, uncaring/selfish/narcissistic parents.

Who you're born to will always be a lottery that leaves winners and losers, even if everyone is equally wealthy. You'll get variable quality genetics, if nothing else, at least until we completely master human genetic engineering.

Re: More than half of all private wealth has been inherited in most of Europe

#210

Post by mLuby » Tue, Dec 19, 2017, 12:34 AM UTC

stale2002 wrote: post #196

mmierz wrote: post #179

Earlier quoted context omitted.

It doesn’t help “nobody”. It helps people that build yachts. And then the people who sell things to the people that build yachts. And on, and on. Working people spend their money.

So would you rather yacht builders get more money, or would you rather people's children get a good education because their parents paid for it?

That's a false dichotomy, since the yacht builders will be taxed and taxes pay for a good education for all (in a far less arbitrary way than wealthy parents' charity).