231–240 of 694 posts
We should tax wealth, not income. [1] The majority of income the top 0.1% make is from investments and gets taxed as capital gains, only about 15% of their income is taxed as ordinary income. [2][3] We have an economic system where it's dramatically easier to make money the more money you already have. If you have $50M, you can park it in an index fund to get 4% returns and make $2M every year just off of your invest…
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I agree, but how would we enforce a wealth tax? Seems like it'd be really easy for rich people to hide their money in assets. What about just printing money? Not ideal obviously, but there'd be no way to avoid the inflation "tax".
You can do a wealth tax by targeting the big ticket items. Rather than invade everyone's home with tax collectors to guesstimate how much every couch cushion you have is worth, you can hit probably 98% of wealth by just taxing the calculated value of owned land and buildings (which is already being appraised for property taxes in most states) and stocks, bonds, and options. So we already invade your privacy to apprai…
Henry George proposed this in the 1800's [0]
We should tax wealth, not income. [1] The majority of income the top 0.1% make is from investments and gets taxed as capital gains, only about 15% of their income is taxed as ordinary income. [2][3] We have an economic system where it's dramatically easier to make money the more money you already have. If you have $50M, you can park it in an index fund to get 4% returns and make $2M every year just off of your invest…
Rather than tax wealth, tax spending: no taxes on your income, no taxes on anything until you spend it. That way people will have more money to invest in companies allowing the economy to grow and create wealth, and we kill the ludicrous idea that consumption creates wealth, rather than construction. It does have the issue that this hurts poor people, but that is easily solvable with a direct transfer of (electronic)…
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Wealth is not a zero sum game.
Are you sure? The earth has finite resources. Wealth is a zero sum game. Even if you want to look at things like entertainment that can be reporduced cheaply, musicians and directors need fed, food is limited, therefore even films/music are limited.
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I agree, but how would we enforce a wealth tax? Seems like it'd be really easy for rich people to hide their money in assets. What about just printing money? Not ideal obviously, but there'd be no way to avoid the inflation "tax".
Inflation harms wage earners farrrr more than capital holders. Capital holders can put it into assets that rise with inflation. IMO it's one of the driving factors of inequality of the past few decades. Those with capital / assets can leverage up, borrow more money, and then pay it back with lesser inflated dollars.
Also the IMF's stance on inflation and inequality is moving from hyperinflation to sustainable inflation leads to reduced inequality but there aren't advantages to moving to a lower inflation than that.
Fantastic article, we've truly been seeing a bifurcation of the workforce, and the development of a plutonomy. The interests of capital and labor are inherently opposed because the incentive of the employer is to reduce costs, and capital has been winning out. I think there's a false tendency to blame Apple for this predicament. It's not Apple's responsibility to provide for the welfare of our country's citizens, it'…
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Maybe we should stop thinking taxes are the solution to inequality. "Cutting all the high trees so the forest looks even".
Taxation is both effective, and far less invasive to markets than many other solutions.(like minimum wages, enforced labor unions, changing the way companies pick or compensate CEOs). So that's why it's brought up so often. What are some solutions you're aware of that are equally effective and less invasive?
None of these are solutions to inequality. Tax-backed redistribution efforts (think new deal) have had no measurable positive impact on absolute or relative poverty; nor have minimum wage laws. The idea of corrupting the CEO compensation and hiring practice at the national level is about as boneheaded as they come.
All of these actions decrease efficiency, and none of them have a significant positive impact on poverty.
I just don't see the point of insisting we "do something!" when none of the similar "solutions" we've tried have made for any positive change, and all of them have measurably cost us in efficiency and growth. The "do something!" model of governance is cruel and deficient; if it would be better, all things considered, to do nothing, then do nothing!
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Inheritance tax was the original solution to this. Someone could be as rich as Croesus during their lifetime, but on their death returned the money from whence it came. Their offspring could benefit from a generous endowment of a proportion of this wealth, say 10%-20%. Edit: and no sneaking about with Trusts, either.
Inheritance taxes are always avoidable, and they could also have devastating consequences. Even if you could effectively prevent a single coin getting to the hands of your children, that would mean lavish expenditures, not investment.
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Income inequality has been increasing since the 1970s, so I submit the underlying cause cannot have been a policy change in 1986.
Look at this chart, you can see that inflation started to increase really fast since the 70's: http://www.wolframalpha.com/input/?i=1000+1776+dollars+in+20... (sometime WolframAlpha doesn't display the chart you might need to reload the page until it does, then click on the button that say "Linear scale" to display in a linear scale instead of a log scale)
If I instead look at the log graph, it looks more like the value of currency was approximately stable before 1900, and then started to trend upwards some time after that. I'm not sure how to interpret that, but if you were intending to point to the end of the gold standard, this data doesn't really support that. There is a slight surge around 1970, but only relative to a general trend.
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Maybe we should stop thinking taxes are the solution to inequality. "Cutting all the high trees so the forest looks even".
Taxation is both effective, and far less invasive to markets than many other solutions.(like minimum wages, enforced labor unions, changing the way companies pick or compensate CEOs). So that's why it's brought up so often. What are some solutions you're aware of that are equally effective and less invasive?
I don't really agree with this. Taxes are distortive and doesn't necesarily help inequality. It might even make it worse. But also, there is taxation as a progressive system of government funding, as there is taxation as in "You will never own more than X, because the government will seize it".
In terms of solutions, I'm not a professional economist, but as I read different authors and books, it really seems like we don't understand why we have inequality in the first place. Even Piketty's Capital feels more like explaining that its going on than why. So I'm jitterish about any solution that doesn't help resolve the core cause, for the which there doesn't seem to be consensus
The CEO's pays is a small but funny example about that: CEO's pays increased enormously after by a law thought to dimishing their returns, made their salaries public, and increased CEO's ambition and bargaining power. The very idea to dock their pay increased it.
But those are small bits at the macro-economic level.