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Are super-rich people just better at making money?

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

#271

Post by gabesullice »

flawn wrote: post #237
gabesullice wrote: post #97

This is a dishonest piece. It ignores that it's based on a zero-sum game and the world isn't zero sum. The quoted economists know that very well. I like that the coin flip game illustrates the concept of compounding interest, but it doesn't model wealth creation at all. Most new ventures aren't I-win-you-lose, they're we-win-or-I-lose. Wealthy people really can take bigger bets more frequently like the article sugges…

The only reason why it isn't zero sum is because we get access to more resources, and this leads de facto to more money in the pool (money resources) right? If we assume the best case that these new resources are distributed equally and not depending on wealth, then the Yard Model still holds in place as we talk about relative percentages.

No, because new resources don't materialize like manna from heaven. Someone, somewhere needs to reorganize resources in a more efficient way or discover new ones. If you benefit "equally" from that change in dynamics to the person who actually catalyzed the change, then there would be less incentive to catalyze it in the first place.

It may happen from time to time because people are curious and benevolent. But, in general, if catalyzing that change has a cost, then the society depends on some people sacrificing their own good for everyone else's. In other words, the benefactor will have paid to catalyze it, but they'll only get an "equal" share of the gains to the people who sacrificed nothing.

I think you probably don't mean "equally" though. You probably mean "fairly". And it's probably true that "sacrificing" 20% of a billion dollars is a lot different than 20% of ten thousand dollars. But rates of return do tend to decrease at scale, maybe not enough?

Personally, I think taking from the catalyzers isn't optimal. It's also petty to worry that they benefitted "too much" from their actions. If we must tax, tax land and consumption. I haven't thought it through, but maybe a 100% estate tax, minus some reasonably capped life insurance for spouses and dependents, would reduce some of the feelings of unfairness that people experience.

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

#272

Post by theshrike79 »

Money follows money.

If I have 10€ and I make 1% profit, I've made a whopping 1€. Now I can buy a few potatoes.

Someone with 1M€ makes the same amount of profit, now they have 10 000€. That's a good few months of living expenses for the regular person.

And this is not even taking into account the access to different people and resources you get just with having enough money to get into the right circles.

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

#273

Post by piva00 »

imgabe wrote: post #222
orzig wrote: post #209

Earlier quoted context omitted.

People tend to think about monopolies in terms of single companies, but they're more commonly a systemic thing. Housing: Most voters are homeowners, with the shared incentive to increase the price of housing in their town through restrictive policies. This ignores the interesting conversation about whether NIMBY actually increases property values, but most people believe they do. They don't even have to be explicit a…

Those are all industries that are heavily regulated and/or subsidized by the government. I’m not saying the free market is the perfect answer to everything, but none of those are a free market.

That's a No True Scotsman, by that definition there simply isn't free market at all in the world. Every product and service has regulations on how/what can be sold...

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

#274

Post by danaris »

bmitc wrote: post #76
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…

The rich buy stuff, do they not? Tax those things to force realization and thus tax of unrealized wealth. Buying a second, third, fourth home? Here's your increasingly high tax and interest rate penalty. Instead of throwing up our hands with "they don't have cash", force them to realize investments into cash and deincentivize being able to keep everything hidden being investments and purchasing things with unrealized…

The rich buy stuff, yes, but they spend a much lower percentage of their wealth (or income) on "buying stuff" than the middle-class or merely-well-off do.

I think we should add very steep taxes on second+ homes and "investment properties", but that's to address the housing problem, not to address the massive wealth disparity.

The real problem is their ability to buy things like "lawyers" and "newspaper coverage" and "senators", and it's much harder to effectively tax that sort of thing.

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

#275

Post by danaris »

nemo44x wrote: post #177
smilekzs wrote: post #133

Earlier quoted context omitted.

You too are conflating wealth ("rich people") and income ("me").

Why should wealth be taxed? It already has been and it is immaterial until it is realized. At that point the profits are taxed. Lots of income may not make you wealthy but it lets you live a rich lifestyle. Move somewhere cheaper if you aren’t meeting your savings goals.

How do you tax someone buying favorable press coverage?

How do you tax someone buying a Congressperson?

How do you tax someone using their wealth as a threat, as a shield, so that they don't have to participate in the same kind of society as the rest of us, and can enjoy "privilege" (lit. "private law")?

Wealth at rest is not immaterial, and taxing profits or consumption will never work to reduce wealth inequality or the disproportionate power the wealthy have over the rest of us.

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

#276

Post by [deleted] »

koonsolo wrote: post #236
5350-uiop-1130 wrote: post #223

Unless you come from a wealthy situation, the only way to get rich is luck. That's it. Hard work is worthless, just ask people in the third-world work 18 hours for a pittance to survive. Of course luck may require certain knowledge, wherewithal and timing. You don't win a lotto without waking up at the right time, driving to the right shop and buying the right ticket.

You're claiming all the super rich lay in their sofa's all day and waited until they got lucky? I'm laying in my sofa all day waiting to get lucky. Still, after all this time, still no luck. Maybe next year. Without super hard work, you won't get rich.

[deleted]

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

#277

Post by illuminerdy »

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…

[dead]

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

#278

Post by imgabe »

piva00 wrote: post #273
imgabe wrote: post #222

Earlier quoted context omitted.

Those are all industries that are heavily regulated and/or subsidized by the government. I’m not saying the free market is the perfect answer to everything, but none of those are a free market.

That's a No True Scotsman, by that definition there simply isn't free market at all in the world. Every product and service has regulations on how/what can be sold...

That’s not the point. If this post is trying to argue that high prices are all just caused by greedy capitalists, then pointing out the three most heavily government-manipulated markets does not exactly support the hypothesis.

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

#279

Post by cameronh90 »

Yizahi wrote: post #183
ls15 wrote: post #169

Earlier quoted context omitted.

You lost me at step 1. Punishing people because their families live in what some people deem "offshore" is heartless. Also, forget modern technology like smartphones if you only can do trade with "good" countries.

I should have clarified - I don't propose to "ban" half the planet because they the not optimal with their laws or prosecution. Offshore usually means tax heavens, usually the tiny island countries with small native population and incredibly lax financial regulation or none at all. Those are the primary targets.

Surprisingly, people do live in those places too. I was born on one and still have a lot of family there, and none of us are wealthy.

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

#280

Post by cloutchaser »

gabesullice wrote: post #97

This is a dishonest piece. It ignores that it's based on a zero-sum game and the world isn't zero sum. The quoted economists know that very well. I like that the coin flip game illustrates the concept of compounding interest, but it doesn't model wealth creation at all. Most new ventures aren't I-win-you-lose, they're we-win-or-I-lose. Wealthy people really can take bigger bets more frequently like the article sugges…

It also ignores another big factor if psychology, humans are a lot more afraid of losing what they have than gaining anything.

So even in this stupid simulation, it just doesn’t work, as people get wealthier they actually risk less.

This whole article is Marxist academic bullshit, eaten up by Marxist upper class tech 20 year olds in this thread.

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