I read an article this week that makes a strong argument that inequality really isn't the problem.
https://www.realclearmarkets.com/articles/2019/12/03/inequal...
Economists Are Rethinking the Numbers on Inequality
301–310 of 367 posts
Re: Economists Are Rethinking the Numbers on Inequality
#302Earlier quoted context omitted.
Well, I agree on both points, but "We should tax X [and maybe redistribute Y]" is very different from "We should de-regulate or fundamentally change Z", is all. It's hard to actually address Piketty's inequality at all if people think it spawns from something fundamentally different from land/real estate appreciation. > I'm not sure if it's actually that easy to change the laws surrounding housing Totally agree, but…
Couldn't we address the real estate problem by having (more) property taxes? I wonder how much impact prop 13 alone had on the problem (I also wonder how the US analysis would look with California subtracted) Of course such taxes wouldn't automatically create housing, but it definitely disincentivizes hoarding it, and allows the state to capture more of the accrued wealth to redistribute it. It makes real estate look…
Property taxes are higher on more developed property. In general, when you tax something more you get less of it. There might be exceptions, but wouldn't a more credible plan be to relax some of the zoning and regulation that are widely acknowledged to deter housing construction?
Re: Economists Are Rethinking the Numbers on Inequality
#303Earlier quoted context omitted.
INHO we should be looking much more at consumption and a lot less at income or (worst of all) assets. In what way does it matter that Warren Buffet has X times my income and Y times my assets, if he drives the same kind of car and lives in about the same kind of house? It means he has more power than me in a capitalistic system, sure. But is that really so wrong or unfair? I think it’s actually kind of a good thing:…
> INHO we should be looking much more at consumption and a lot less at income or (worst of all) assets. At what age can you retire? Can you afford education for yourself and your children? Can you afford the home in the district with the good schools? How much debt will you and your children be in after finishing college? What are the odds you go bankrupt from a medical incident, even with "insurance"? "Consumption"…
My European and Canadian relatives can answer all those questions as:
Yes, yes, none, and none.
All of those relatives come from countries with massive inequality (compared to mid 20th century), no wealth taxes, and paltry inheritance taxes.
Don’t confuse America’s exceptional dysfunction with a failure of capitalism.
Re: Economists Are Rethinking the Numbers on Inequality
#304Earlier quoted context omitted.
Over the time period, married couples often had a single income. Now working class married couples are just as likely to have a total of two to six jobs between them, but their real median income is still lower than it was when only one person was working. There are no "nit picks" to debate. Refusing to acknowledge the destruction of financial stability for the working class and lower middle class in the US and certa…
> Now working class married couples are just as likely to have a total of two to six jobs between them, but their real median income is still lower than it was when only one person was working This is very much false. Look at the data. Real median income of all households had risen by a relatively small amount, because there are many more households today with one adult than in the past. However, real median income o…
> because there are many more households today with one adult than in the past
Not only that, but we should remember that there are simply more _people_ globally. Using the U.S. as an example - when my dad was born in 1954, the U.S. population was HALF of what it is now. Should we assume that all markets and wage/labor share increase linearly AND directly (in time) with population? Certainly not.
Somewhat tangential, this population factor also plays a major role (though not the only one) for the reason city or near-city housing prices have skyrocketed - building construction just didn't keep up with the sheer population growth in many advanced economies, even more so in cities of advanced economies. This is why my buddy in Palo Alto is, for all intents and purposes, forced to live with two retirees and 4 other Millenial devs to afford rent.
Re: Economists Are Rethinking the Numbers on Inequality
#305Earlier quoted context omitted.
Well, dcolkitt was talking about imputed income in the context of tax advantages. I assumed (perhaps wrongly) that the subtext was that people who own houses should be taxed on the "imputed income" as if it were real income. That raised my hackles - perhaps wrongly. Still... there's something funny in the "imputed income" accounting. Let's say I buy a house for $500,000. I live in it. I don't pay rent, though the hou…
This tax on "imputed income" actually exists in Switzerland for properties, with interesting effects on the market.
Could you provide some more detail on these interesting effects?
Re: Economists Are Rethinking the Numbers on Inequality
#306Earlier quoted context omitted.
Yet the Chinese seem to accomplish it.
Yep, I’ve seen it. Families scraping up money from all kinds of places and driving old beaters just to make sure they can send their kids to after school cram school. A lot of it is culture. I mean, some parents are well off but many are just really eking it out, never the less any extra money goes into education rather than new scooters or vacations or clothes, etc.
And at the end of the day, the amount of money you have or the time you have outside of work as a parent matters much less than the amount of time the student puts into their work. Many Asian students know they have to (because they are expected to) put in the time.
Re: Economists Are Rethinking the Numbers on Inequality
#307Earlier quoted context omitted.
> People starving, having no health care, low life expectancy, that sort of thing, are problems. Their neighbor having more money in the bank is not really a problem. Most people, when they critique wealth inequality, aren't critiquing their neighbors because most people in the same zip code are going to be at similar levels. When people critique wealth inequality, they're talking about the Koch brothers, or other pa…
> I, too, am in favor of a 100% wealth tax upon death. No more freeloading failsons. I am very far from an economic leftist, but the elimination of inheritance seems to me the fastest, fairest, path to equality of opportunity (the disposition of the confiscated assets is a separate argument). Tax the dead guy.
Then the dead guy will give all his money to his kids before dying.
At the very least the dead guy will pay for them to go to Harvard, arrange the appropriate internships, etc.
It’s very possible to preserve a class system without actually transferring wealth to your children upon death.
Just use your wealth and money to make sure they’re set before you die.
Easy-peasy.
Just look at the many children of still-Alice billionaires. They’re not hurting.
For example, Warren Buffet announced he was giving away all his wealth, created a foundation that possesses most of his wealth, and named his son as director.
Not rocket science.
And that doesn’t include the affects of private tutors, nanny’s, quality education, etc.
Re: Economists Are Rethinking the Numbers on Inequality
#308This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new. The major points of their work, and especially of Piketty's monumental _Capital for the 21st century_ still stand: that capital is a positive feedback loop in a way that labor is not; that mid-20th-century laws that put brakes on this feedback loop have been removed; th…
> and that the only reasonable solution for this is a tax on owned capital (not on income or cap gains) and the political chances of this happening are slim, etc.
I think another reasonable solution, and one which actually has a chance of happening, is a land value tax
Re: Economists Are Rethinking the Numbers on Inequality
#309Earlier quoted context omitted.
> that capital is a positive feedback loop This requires a lot of the investment environment that isn't a given. Capital loses its feedback loop if inflation outpaces economic growth or if the quality of investment opportunities declines significantly. There is no given that just having $10 million dollars means it will be easy to outpace inflation and not end up with less.
Having 10 million dollars as of 2019 and being unable to at least keep up with inflation means making terrible choices, many, many times over.
With that much money you basically have to make a single phone call to Vanguard. With slightly less you have to spend more time on the phone...
Re: Economists Are Rethinking the Numbers on Inequality
#310Earlier quoted context omitted.
We know that because he did it. He literally proved it by becoming a Billionaire. Yes, lots of people were alive in the exact same time when he started Amazon.
How is that proof of ability more than luck?
There is an excellent paper on this, it is a combination of both luck and skill: