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Interesting. Perhaps I'm misinterpreting their rhetoric, but my impression has been that many people are arguing for precisely this.
As I said last time this came up, the answer is a maximum wage. We can still set the maximum wage beyond the level of most people (e.g. $1,000,000 per annum after tax). I don't see how it would discourage innovation, but I do see how it'd help curb financial inequality.
If you set a maximum wage like that, a lot of what is good in society would not happen because people would not be able to amass capital. For example, you would not have a SpaceX or a Tesla. You would not have Y Combinator as it exists today. You would not even have the video game that I am about to release next month. Yes, there are a lot of jerks who amass capital and do nothing with it or who do irresponsible thin…
Yeah, just remember the bad old days when we had ~95% income tax and NASA actually had a serious budget.
We definitely wouldn't want to return to the days when space travel actually pushed real boundaries and we didn't have a toy supercar company for the superwealthy.
As I said last time this came up, the answer is a maximum wage. We can still set the maximum wage beyond the level of most people (e.g. $1,000,000 per annum after tax). I don't see how it would discourage innovation, but I do see how it'd help curb financial inequality.
It would discourage innovation for a lot of reasons, and one is that high earners would move to other countries.
Earlier quoted context omitted.
If we set a maximum wage, driven people would simply move to another country. There is plenty of evidence for that as well. The Beatles, for example, came to America to avoid the grievous taxes being levied in England. U.S. companies locate offices in more tax-friendly locales all the time too.
> "There is plenty of evidence for that as well." Okay, can you show me some evidence? > "The Beatles, for example, came to America to avoid the grievous taxes being levied in England. U.S. companies locate offices in more tax-friendly locales all the time too." Both of those are examples of tax dodges. Maximum wage is different, in that people would be required to live in the country they made their main income in.…
Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. The US is fundamentally different than Nordic countries, where socialism appears to be working: * The Nordic countries are tiny compared to the US. * They are highly educated. * Their society is homogenous. It seems like everybody is assuming that th…
You are inventing a complete straw man. That is not what I want nor is it what most other people who are concerned about wealth inequality want.
What we want are policies that do not make it so absurdly easy for those who already have access to capital to continue to accumulate wealth and influence at an exponential rate while those who are not born under such fortunate circumstances live with an ever-increasing disadvantage.
Of course this is inevitable to some degree due to the nature of compound interest. But there are ways to mitigate it. See: progressive taxation. Now it's time to take a look at other things such as the estate tax and taxes on capital gains and dividends. The latter are the most egregious in my estimation. The U.S. currently taxes income earned through labor, time and talent at a higher rate than income earned through investment, thus continuing to privilege those who already have access to capital
Earlier quoted context omitted.
Most wealth doesn't come from "wages" or salaries. It comes from inheritance and increasing value of assets. Many high profile CEO's are worth tens / hundreds of millions but take $1 salaries.
Inheritance is a separate issue, but one that you're right to raise. However, there's no reason you can't do both (set a maximum wage and set limits on inheritance).
The government has already taken their cut of the wealth that goes into an inheritance on the first go-around, and they are actively eroding it already by printing additional money and inflating the currency. They shouldn't get to double-dip into the hard-earned and carefully stewarded generational wealth of my family, just because somebody died.
Sure, it feels good to say somebody who was born into the lucky sperm club isn't entitled to the fruits of their wildly successful parents' labors. But I'd rather bring up the floor than pull down the ceiling.
Economic quality seems like a red herring for actual issues like how well off people are. Is the actual concern about how poorly off the poor are? Imagine a thought experiment where aliens come to earth and give every human 100x the resources they have currently (or 100x a year's min wage), as an annuity. The poor are all now rich, and the wealthy can buy their own space stations.
Is this intrinsically a problem, and why?
If the actual concern is about how well off the lower and middle class are, then that's reasonable: we're talking about the welfare of actual people. But actual people are not harmed or affected directly by some mega-rich person being much richer.
I expect that someone will reply to explain that inequality is the symptom of or cause of some other dysfunction, and it is the actual problem - and that's great, that's what I'd like to understand better. Whatever the actual problem is, let's talk about it. If the problem is about lack of adequate education, opportunities, etc. then let's discuss those concerns directly.
Earlier quoted context omitted.
> "There is plenty of evidence for that as well." Okay, can you show me some evidence? > "The Beatles, for example, came to America to avoid the grievous taxes being levied in England. U.S. companies locate offices in more tax-friendly locales all the time too." Both of those are examples of tax dodges. Maximum wage is different, in that people would be required to live in the country they made their main income in.…
I think you are missing basic principles of economics. Your arbitrary cap on income would move companies and jobs to countries free of weird policies like that.
Is economic inequality a problem in and of itself? Why? Economic quality seems like a red herring for actual issues like how well off people are. Is the actual concern about how poorly off the poor are? Imagine a thought experiment where aliens come to earth and give every human 100x the resources they have currently (or 100x a year's min wage), as an annuity. The poor are all now rich, and the wealthy can buy their…
The issue is that wealthy people do not have a monopoly on talent, good ideas or intelligence. But they have a monopoly on power and influence. Society therefore suffers when the best ideas do not necessarily compete on an equal basis within the marketplace or the political arena, if they make it there at all.