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

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

#221

Post by Can_Not »

topmonk wrote: post #215
Can_Not wrote: post #213

Earlier quoted context omitted.

If you're letting 1% of the population hoard 99% of the opportunity, you're losing metric tons of potential.

It isn't. It's much more graduated than that. If we don't vary the amount of support people get, then we won't be able to take advantage of situations where more support (or less) would result in greater success. And given that everything is constantly changing, there is no way to find a perfect level of opportunity to give to people. So, a system that provides a varying level of support spread out against the popula…

I wasn't advocating for perfect exactly measured equality, I was arguing for a distribution that wasn't over the top insanely unfair to 99+% of everyone.

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

#222

Post by topmonk »

vidarh wrote: post #220
topmonk wrote: post #211

Earlier quoted context omitted.

That would be true if we were trying to find the exact reasons for success. If you are just trying to promote success, then it stands to reason to reward success of the parents, incase some of those confounding factors are hiding actual fitness. After all, if the null hypothesis is true, you aren't losing anything by promoting some people over others, if they are all equality capable, anyway.

Does it? We don't know that without actually testing. It's very much possible that providing less assistance but to more people will have a much wider impact. If the parents truly are responsible for their own success, there is for example good reason to hypothesize that they may be able to compensate for reduced support with their abilities.

The problem is that measurable success is going to change the experiment.

If you consider that there is no constant landscape, it's always changing and always an unknown, the best option is to try a plethora of different ideas, hoping some will succeed.

It's more like fighting a war in an unknown battlefield. If you play it just one way, you are more likely to lose than if you try many different strategies at once.

The ones that succeed will be self-sustaining, for as long as they are successful, anyway, and gain you enough ground to compensate for the strategies that didn't work.

If this wasn't true, nature would only have produced one single organism rather than a billion or more.

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

#223

Post by jogjayr »

crdoconnor wrote: post #219
jogjayr wrote: post #204

Earlier quoted context omitted.

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 accordi…

>Starting, owning, and/or running a business is working. Only it's working with no guarantee of any reward. Well, yes, that's why the rewards of starting a business are often completely tax free up until a pretty high level. I don't really have a problem with that, which should have been pretty obvious from my above post. However, that is completely irrelevant to what I said above. Sitting on property and collecting…

> Sitting on property and collecting rent is clearly not working.

I guess we'll have to agree to disagree about that.

Even landlords have to work (and I say this as a tenant). There's tenants to screen, repairs to manage, regular safety inspections to perform. Land rents have volatility and risk as well. There's the possibility of vacancy or bad tenants which leaves you with a property that's not returning any value. A landslide could take away your property entirely and insurance won't cover it (don't scoff; I know someone this happened to). Maybe it's not as much work as running a small business, maybe it is, I don't know. But it's a non-zero amount of work.

EDIT: As I pointed out in a comment above, I think the top tax rate for unearned income should be higher, with more brackets overall. There's no reason for it to be flat 20% when the top rate for earned income is 40%. That unfairly penalizes small-time investors (who get taxed at 15% on an income that would be almost 0% if earned) as well as high-earning salaried people who pay 40% compared to the 20% someone making 20x as much in unearned income would pay.

> I have yet to meet a person who can cogently argue why handouts (e.g. land rents) shouldn't be distributed equally.

Taxing rental income at 100% would kill off the rental market completely. A lot of people like the flexibility of renting and don't want to deal with realtors and banks and mortgages every time they change their job. Many people can't afford the down payment to buy a house so they need to rent until they've saved up enough to do so (you might argue that property prices will go down because of no landlords and there won't be a need for mortgages, not sure that'll actually happen but it's another topic). Businesses also rent offices or retail space when they can't or don't need to buy. At the end of the day, landlords provide a service that's useful, by deploying their capital and labor.

> I'm of the opinion that unearned income should be taxed at 100%

Here's the IRS definition of unearned income:

"Unearned income includes investment-type income such as taxable interest, ordinary dividends, and capital gain distributions."[1]

So if you really mean that, you're going to be taxing average-Joe-worker-with-index-funds (that includes me BTW) 100% on his dividends. Maybe we need to start being clear on what the term "unearned income" really means before we argue further :-)

1. https://apps.irs.gov/app/IPAR/resources/help/unearn.html

> whereas earned income should be taxed at 0%

So...CEO making $50 million/year would pay $0 in taxes?

> You really seem very keen on having the tax code encourage gambling over working.

Gambling implies the possibility of loss, the presence of real risk. And even property speculation is still a lot of work; you have to research lots and lots of properties, crunch numbers, line up funding, develop and market the property for rent or resale. Given that it's work with more risk involved than taking a paycheck, why is it a bad thing for the tax code to recognize this?

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

#224

Post by ericd »

nicolashahn wrote: post #214
ericd wrote: post #209

Earlier quoted context omitted.

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…

I'm not a parent (also not the person you're directly responding to), but I think one day I might be. Right now we're encouraging the productive people to pass on their assets, but not the ability to create wealth - which would be better for society, and (totally my own subjective opinion) will lead to a better life for the child as well. There's still the option of living a comfortable life being totally unproductiv…

>Right now we're encouraging the productive people to pass on their assets, but not the ability to create wealth - which would be better for society, and (totally my own subjective opinion) will lead to a better life for the child as well.

Most productive parents are already highly incentivized to not see their children become totally unproductive wastrels, because the culture that made them productive taught them to value productivity, and good parents typically want to see their children instilled with what they see as good values. I don't think the government needs to do much more there.

> There's still the option of living a comfortable life being totally unproductive - but why let that option waste an unnecessary amount of our society's assets?

There are a couple things to unpack here. First off, wealthy peoples' wealth doesn't just sit in a cave, it's almost always ~100% invested in productive ventures. Even sitting in the bank, the bank is using it to write loans to people and businesses to do things with.

The other thing is that it's part of our very basic social compact that peoples' property is theirs and their family's, not the society's, and only in very limited circumstances can the government/society seize that property for the use of the group.

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

#225

Post by rajnathani »

kiliantics wrote: post #27

Piketty showed in Capital that most modern work about the trends in economic inequality was flawed. We usually think of the industrial revolution and modern era as periods where power and wealth became much more fairly distributed. However, if you go far back enough into the records, as he did, you can see a clear trend of concentration of wealth even now in the current system. The trend was briefly disrupted by the…

From what I remember Piketty was simply against using the Gini Coefficient as a measure of wealth and income inequality, which happened/happens to be primarily used by such contemporary measurements.

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

#226

Post by rajnathani »

acover wrote: post #103
nugget wrote: post #83

Earlier quoted context omitted.

Didn't Rognlie @ MIT show that almost all of the out-performance of wealth was due to real estate prices? Couldn't the solution to wealth inequality therefore be a radically different approach to building codes and land value taxes? And doesn't it follow that wealthy landlords in California massively benefiting from proposition 13 and decrying wealth inequality at the same time sit at the pinnacle of political and ec…

> In the postwar era, developed economies have experienced two substantial trends in the net capital share of aggregate income: a rise during the last several decades, which is well-known, and a fall of comparable magnitude that continued until the 1970s, which is less well-known. Overall, the net capital share has increased since 1948, but when disaggregated this increase comes entirely from the housing sector: the…

It’s clearly the case for since the 70s as well.

In an interview, Nobel prize-winning economist Joseph Stiglitz (who served under Bill Clinton) criticized Piketty [0] of overemphasizing the increase in concentration of wealth, and this was on the basis that the current increase in wealth stems from an increase in land value.

[0] https://www.salon.com/2015/01/02/joseph_stiglitz_thomas_pike...

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

#227

Post by meebs »

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?

Would you rather the N of yacht builders' children get good education or the n (where n <<< N) children of wealthy parents get good education? Your argument is foolish.

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

#228

Post by justicezyx »

ataturk wrote: post #193
justicezyx wrote: post #76

Earlier quoted context omitted.

Or it was what they want you to believe.

I think the matter is well documented. Wealth is not a zero-sum game. However--you have countries that deliberately hold people down. Everyone wants safety nets and such. That all has a huge effect on individual upward mobility.

Wealth might not be a zeronsum game, but we need to prevent someone to play it as such.

Imagine an economy where wealth is accumulated more and more to a few, then even the total wealth grows, how everyone enjoy them equally? If not equally, the inequality soon will make wealth zero sum anyway.

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

#229

Post by learnstats2 »

ericd wrote: post #209
learnstats2 wrote: post #171

Earlier quoted context omitted.

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…

I rather think that most parents would prefer to spend time with their children over their current desperate need to amass enough wealth to carve out a meagre existence.

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

#230

Post by MisterBastahrd »

stale2002 wrote: post #98
MisterBastahrd wrote: post #28

Earlier quoted context omitted.

The income by the inheritor was never earned. Hence it's perfectly logical to tax it.

Yes it was. It was earned by the person who made the money. Would you rather all the wealthy people in the world just blow all their money on yachts or something? Because that is the alternative. Why bother saving money if it is all just going to be confiscated when you die. Instead you should just blow it all on ridiculous things that help nobody but yourself in the immediate time frame.

Yes, I'd rather them blow all their money on yachts. Because then their money would be entering the economy where it would be used to pay for goods and services and employees.

You know what happens to the money when the government taxes an estate?

That money gets put back into the economy in the next calendar year. While it might be good for individuals to have savings, it's better for the economy when money gets spent. The reason that Gary Cohn got so many shrugs when he asked CEOs how many of them would expand businesses with the money from the tax cuts is simple: they hire more people when they have more demand. Making rich people richer or giving rich kids more of their parents' wealth does jack shit for the economy.

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