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The wealth gap between young and old people

washingtonpost.com

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Re: The wealth gap between young and old people

#31

Post by msandford »

mjevans wrote: post #14
stephengillie wrote: post #4

Earlier quoted context omitted.

> Young people (generally defined here as those under 40) What is with the media and this strange concept of "young people" now being the 28-40 age bracket? Back in my day, "young people" meant 8-18 year olds. This isn't the only article making this bizarre wordplay. One of the previous USDS "submarine" articles referred to "young people" on a team as the members who were over 28.

Clearly they are talking about 'the workforce' as 'people'. 'kids' are not considered anything but a cost center in their equation.

'kids' used to work and earn money. That used to be a real category. It's not anymore. A lot of people don't learn how to really manage their money until after they've graduated from college and realize that they're going broke and that there are no new loans.

Is that irresponsible of them? Sure! But how were they supposed to learn if they couldn't get a job and make some of their own money?

Re: The wealth gap between young and old people

#33

Post by refurb »

nemo44x wrote: post #24
toomuchtodo wrote: post #13

Earlier quoted context omitted.

> removing the maximum wage for Social Security contributions, and higher Medicare premiums. Ahh! So the question is, at what point will Millenials (myself included, at the older end of the spectrum at 32) say "f * it" when we're paying Europe-level taxes with third world country benefits * Single-payer Medicare for retires, expensive private insurance for everyone else * Social security essentially becomes a basic i…

You already do pay Europe level taxes - or should I say we do. Add up what you spend on all your taxes, state and Federal, look at medicare, SS your health insurance and other fees. Look at sales tax, property tax (even if you rent it is built in) and the various "fees" we have for things. Subtract all of this from your income and look at most of Western Europe and you'll see we pay roughly the same overall. I agree…

US taxes rates are much lower than Western Europe save for a few outliers.[1]

Note that this graph doesn't include VAT which can be 15%+ in the EU.

[1]http://www.economist.com/blogs/graphicdetail/2012/10/focus-4

Re: The wealth gap between young and old people

#34

Post by refurb »

toomuchtodo wrote: post #12
11thEarlOfMar wrote: post #11

A couple of factors that play into this over the last 100 years: The prevalence of credit cards that increase the amount of depreciating goods young people can buy, and the long-term power of 401(k) investing. Expanded consumer credit, and it's appurtenant high interest rate cost, would tend to keep young people less wealthy towards the last half of last century. As credit card debt skyrocketed, savings rates plummet…

Don't forget wage stagnation over the last 40 years and the increased cost in college education (funded, yet again, by cheap credit backed by the federal government).

Wage stagnation is only true if you ignore non-monetary compensation. Add that in and total compensation has grown.

Re: The wealth gap between young and old people

#36

Post by [deleted] »

msandford wrote: post #29
gitah wrote: post #26

Earlier quoted context omitted.

Well your parents inherited almost a million dollars of real estate so comparing your situation to theirs seems unfair.

30-50 years ago farmland was a few hundred an acre in real terms. Today it's a few thousand. That's inflation adjusted so land has definitely appreciated considerably. http://www.ers.usda.gov/media/873616/farmrealestatevalues.pd... What's the rising tide that floats all boats these days? It's not the stock market, it's not real estate, and it's not startups. I can't think of anything that keeps going up, except perha…

[deleted]

Re: The wealth gap between young and old people

#37

Post by toomuchtodo »

refurb wrote: post #34
toomuchtodo wrote: post #12

Earlier quoted context omitted.

Don't forget wage stagnation over the last 40 years and the increased cost in college education (funded, yet again, by cheap credit backed by the federal government).

Wage stagnation is only true if you ignore non-monetary compensation. Add that in and total compensation has grown.

What would you define as non-monetary compensation besides health care benefits (which increase so quickly you could consider those benefits to stagnate as well).

Re: The wealth gap between young and old people

#38

Post by mikeash »

refurb wrote: post #33
nemo44x wrote: post #24

Earlier quoted context omitted.

You already do pay Europe level taxes - or should I say we do. Add up what you spend on all your taxes, state and Federal, look at medicare, SS your health insurance and other fees. Look at sales tax, property tax (even if you rent it is built in) and the various "fees" we have for things. Subtract all of this from your income and look at most of Western Europe and you'll see we pay roughly the same overall. I agree…

US taxes rates are much lower than Western Europe save for a few outliers.[1] Note that this graph doesn't include VAT which can be 15%+ in the EU. [1] http://www.economist.com/blogs/graphicdetail/2012/10/focus-4

Why does that count employee social security contributions, but not employer contributions? Both ultimately come out of your paycheck. The fact that social security contributions are split is just a fiction that makes the tax rate look lower.

It also sounds like it doesn't count state and local income taxes, nor property taxes or any of the many other taxes we have the privilege of paying.

The conclusion may well be correct, but the data presented doesn't seem to be nearly complete enough to support it.

Re: The wealth gap between young and old people

#39

Post by mikeash »

twoodfin wrote: post #18
ForHackernews wrote: post #8

Earlier quoted context omitted.

> removing the maximum wage for Social Security contributions This sounds like a great idea to me. It's absurd that only the first $118,500 of earnings are subject to to social security tax, and it means that our tax structure is much less progressive than it appears at first glance (which is one reason certain people strenuously avoid talking about any taxes except Federal Income Taxes).

It's not absurd: Social Security's benefits formula has significant "bend points" that make it an increasingly bad "investment" for higher income workers. Eliminating the wage cap would remove any remaining fig leaf covering its essentially redistributive nature: High income workers would have to live to 140 to get back what they "paid in" even without interest.

Why do we need to keep a fig leaf to cover up what everybody already knows is there? We should either accept that Social Security is a form of welfare and rationalize it accordingly (my preference) or we should overhaul it to actually be the mandated savings scheme that it's said to be.

Re: The wealth gap between young and old people

#40

Post by toomuchtodo »

mikeash wrote: post #38
refurb wrote: post #33

Earlier quoted context omitted.

US taxes rates are much lower than Western Europe save for a few outliers.[1] Note that this graph doesn't include VAT which can be 15%+ in the EU. [1] http://www.economist.com/blogs/graphicdetail/2012/10/focus-4

Why does that count employee social security contributions, but not employer contributions? Both ultimately come out of your paycheck. The fact that social security contributions are split is just a fiction that makes the tax rate look lower. It also sounds like it doesn't count state and local income taxes, nor property taxes or any of the many other taxes we have the privilege of paying. The conclusion may well be…

> Why does that count employee social security contributions, but not employer contributions? Both ultimately come out of your paycheck.

Employer contributions don't come out of your paycheck though; for the business, its a cost of doing business.

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