Are super-rich people just better at making money? • Hacker News Board

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

#31

Post by oreally » Thu, Dec 22, 2022, 9:26 AM UTC

dhruval wrote: post #11

This smells misleading / overly simplistic but I can’t quite quite put my finger on precisely why? Some thoughts - consensual trades are win win (you want a sandwich, I want $5 let’s trade! And we both win) - something about the model is overly simplistic, like it produces a statistical distribution that looks like extreme inequality from randomness, but lots of different sorts of distributions can emerge from aggreg…

The thesis was an investigation into whether the super-rich are better at making money, but they just took widely known distributions to tell a story enforcing that view without diving in as to why that's the case.

It's the classic case of using statistics as a method to divert blame onto something else. You learn nothing but a sense of despair from these kinds of analysis.

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

#32

Post by nemo44x » Thu, Dec 22, 2022, 9:26 AM UTC

smilekzs wrote: post #21

bmitc wrote: post #3

To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…

One thing I've noticed consistently, is when politicians talk about "taxing the wealthy", they almost always follow that with "earning more than $xxxk a year". This is conflating wealth with income. Being within this tax bracket myself, I do not deny that I am biased, but I do hope this bullshit gets called out hard whenever someone brings up yet another underhanded measure to milk us (typical SFBay SWE) above and be…

Is this a new form of NIMBY taxation? “Tax the rich but not rich people like me!”?

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

#33

Post by sgjohnson » Thu, Dec 22, 2022, 9:26 AM UTC

bmitc wrote: post #18

sgjohnson wrote: post #8

Earlier quoted context omitted.

> To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. That never happened. https://mises.org/library/good-ol-days-when-tax-rates-were-9...

What is "that" that you're referring to? Tax rates have absolutely fallen. If you're referring the article's claim that the rich pay much more taxes in terms of dollar amount, that doesn't necessarily mean anything because the rich are wealthier and more concentrated than every before. For example: > According to investment bank Credit Suisse, the fraction of global household wealth held by the richest 1 percent of t…

Looking at the total world population is completely meaningless. This is because fertility rate in virtually every developed country is below 2, however there are extremely poor countries where the population is exploding with fertility rates above 8.

> To put it another way, as of 2010, 388 individuals possessed as much household wealth as the lower half of the world's population combined—about 3.5 billion people; today Oxfam estimates that number as 26.

This is also completely meaningless, because that figure is largely imaginery and super illiquid. Rest assured, Jeff Bezos can't cash out of Amazon and expect to be paid the current market rate for all of his shares.

It's also completely meaningless because the world's bottom 3.5 billion people control virtually no wealth whatsoever. Makes for a good headline though

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

#34

Post by ZeroGravitas » Thu, Dec 22, 2022, 9:26 AM UTC

This combines with the observation that intelligence is normally distributed, so the rich people are more likely to be average people that got lucky, because there's more of them than smart people with a good strategy. It also applies in the opposite direction, there's more unlucky average people than true failures.

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

#35

Post by foldr » Thu, Dec 22, 2022, 9:26 AM UTC

blfr wrote: post #14

bmitc wrote: post #3

To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…

The US is only very loosely constrained by its tax base. It does not lack funds. It has also been spending much more on education over the past decades[1]. With very little to show for it. [1] https://nces.ed.gov/programs/digest/d19/tables/dt19_236.55.a...

You’d expect education costs to be rising, though, as people are expected to have a higher level of education before entering the workforce than they were previously, and because career changes and reskilling are far more common than previously. It’s a bit like healthcare. You can be spending far more than you were when there was a younger population and fewer sophisticated and expensive treatments, and yet still not be spending enough.

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

#36

Post by Moissanite » Thu, Dec 22, 2022, 9:26 AM UTC

bamboozled wrote: post #23

bmitc wrote: post #3

To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…

"To solve all this, it's pretty simple," I feel if it was simple it would be fixed?

Solving problems requires both the way and the will - those two things are not co-incident in many politicians.

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

#37

Post by sgjohnson » Thu, Dec 22, 2022, 9:27 AM UTC

lozenge wrote: post #30

sgjohnson wrote: post #8

Earlier quoted context omitted.

> To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. That never happened. https://mises.org/library/good-ol-days-when-tax-rates-were-9...

Your source doesn't address the amount of tax collected from the ultra wealthy in relative proportion to their wealth. It only addresses the amount as a percentage of the federal budget.

Do you seriously think that the ultra wealthy have ever paid the 90% tax rate?

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

#38

Post by rizz0 » Thu, Dec 22, 2022, 9:27 AM UTC

bloodyplonker22 wrote: post #4

The example that is used in this blog post is completely and absolutely wrong. He portrays wealth accumulation as a zero-sum game with people coin-flipping against each other. In reality, someone does not have to lose for wealth to be created.

I believe his point is about coin flipping being a fundamental force in the market. That at the basis of a market, there’s a game of coin flips going on.

True, there may be technological innovations in factories, farms, and labs that grow the size of the pie as a whole. But probably those with most market power will have most of the access to those innovations.

And even if the value of technology would be fairly distributed, it does feel to me that the underlying game of coin flips rigs the whole system in favor of the eventual oligarch.

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

#39

Post by nemo44x » Thu, Dec 22, 2022, 9:27 AM UTC

bmitc wrote: post #25

hackerman123469 wrote: post #12

Earlier quoted context omitted.

But tell me, how are you going to tax the super rich? It's incredibly difficult to tax someone who's actually poor on paper. Most super rich people actually don't seem to have much wealth officially declared, all of their wealth is sort of like "pseudo" in that it's all tied up in assets, and sometimes assets that aren't directly owned by them but their companies etc. and they have a lot of shortcuts for tax breaks o…

It isn't difficult at all. This is an oft repeated excuse. The rich use their wealth as collateral to purchase things, like homes, companies, investments, etc. and transfer wealth to inheritors with basically no tax. So stop worrying about trying to figure out how to tax unrealized wealth and start taxing the things that unrealized wealth helps secure and purchases. This is one way to force realization of that wealth…

All the money they’ve made has been taxed. When they sell assets they pay taxes. Yes there are sone areas to address but wealthy people pay the majority of taxes.

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

#40

Post by sigg3 » Thu, Dec 22, 2022, 9:27 AM UTC

hackerman123469 wrote: post #12

bmitc wrote: post #3

To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…

But tell me, how are you going to tax the super rich? It's incredibly difficult to tax someone who's actually poor on paper. Most super rich people actually don't seem to have much wealth officially declared, all of their wealth is sort of like "pseudo" in that it's all tied up in assets, and sometimes assets that aren't directly owned by them but their companies etc. and they have a lot of shortcuts for tax breaks o…

Of course you can track down de facto ownership and streams of income regardless of de jure separation. This is a question of political will, not economical (im)possibilities.

Whenever you try making rich people responsible, they move abroad. In Norway, the super rich are becoming Swiss citizens after a recent change in taxation. Unless Switzerland takes social responsibility, they're getting away with it. But if Switzerland does the right thing, the rich will find another safe haven.

However, this is a short term issue. The long term changes require a historical change in culture and policy. Otherwise we're still very much catering to the will of old money and power structures that resembles autocracy.

(I'm just an armchair socialist and no expert by any measure, ymmv.)