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

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

#341

Post by foldr » Thu, Dec 22, 2022, 3:29 PM UTC

impossiblefork wrote: post #333

foldr wrote: post #207

Earlier quoted context omitted.

>Rather, people [nowadays] know a different set of skills and accumulate a different body of knowledge. Yes, but this is increasingly knowledge that needs to be imparted through formal education (for a variety of reasons). Hence it costs more. >But how many resources does a society need to train its workers? If that number keeps growing, then there is something wrong with the society. I don't see the logic here. It's…

>Only a tiny minority of the working population could read Ancient Greek in Europe in 1800. In England, around 50% of the population were still entirely illiterate at that point in time. Surely that can't be true? Here in Sweden literacy was made mandatory for adults in 1686. It was not permitted to get married without being able to read. Surely England can't have been that far behind, as late as 1800ed?

It's entirely true, and England was not unusual in that respect compared to the rest of Europe. See e.g. here: https://ourworldindata.org/literacy. Or here: https://www.researchgate.net/figure/Literacy-rates-in-Europe...

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

#342

Post by notwokeno » Thu, Dec 22, 2022, 3:29 PM UTC

The trick IMO is to use your extended family as a network and try to keep things within the network.

People don't like this but not only does it work well it's often more efficient in general.

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

#343

Post by ti00 » Thu, Dec 22, 2022, 3:29 PM UTC

matthewdgreen wrote: post #293

brianwawok wrote: post #245

Earlier quoted context omitted.

After you die your estate sells stocks

Does the estate pay capital gains on those stocks, or can it take advantage of stepped-up cost basis rules to avoid those as well?

I'm not an expert, but my reading of the IRS's FAQ [1] is that the cost basis of inherited assets gets reset to the fair market value of the assets on the date of death.

1. https://www.irs.gov/faqs/interest-dividends-other-types-of-i...

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

#344

Post by ksniwmidjd » Thu, Dec 22, 2022, 3:29 PM UTC

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…

Zero sum game? Fractional reserve banking would like to have a word with you

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

#345

Post by willmadden » Thu, Dec 22, 2022, 3:30 PM UTC

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 solution is to cut the size of government first. The inefficiency and outright grift happening in all federal agencies would make any entrepreneur’s head spin. Imagine if Congress had to answer to VCs for their spending. They would all be blackballed from the investor community overnight.

The “tax the rich more” line is a little naive. The world is a different place after the Rothschilds figured out how to shield their wealth from monarchies. It’s easier than ever to offshore wealth, remember the Panama papers that promptly disappeared from the news?

The “solution” of global governments is a cure that’s likely far worse than the disease.

It’s a complicated situation. A progressive VAT tax that is consistent across jurisdictions would be a good start. The tax code (at least in the US) needs to be thrown out and replaced. Monetary policy and taxation via inflation is also primitive and in dire need of reform.

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

#346

Post by thebigspacefuck » Thu, Dec 22, 2022, 3:30 PM UTC

donatj wrote: post #195

The whole yard sale model suffers from the fallacy that there is a predefined amount of wealth. If that were true, we’d have exactly as much wealth as our cavemen brethren did, which is clearly not the case. Every time anyone creates something more valuable than the sum of its parts, value is added to the system. A bow is far more valuable than the wood used to build it. A hammer and nails far more valuable than the…

Does it apply better to land/housing or other limited resources?

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

#347

Post by quietbritishjim » Thu, Dec 22, 2022, 3:31 PM UTC

pcthrowaway wrote: post #336

lelag wrote: post #99

Earlier quoted context omitted.

> Buying a second, third, fourth home? It's too easy for the ultra-rich to find loopholes in any rules. If there is a tax on homeownership, they will simply not own any home but will own some corporate entity that own the asset. See ? No secondary residence. Just an investment in a corporation that happens to home a bunch of houses.

Would it not be possible to then tax them on their ownership on that corporate entity, which gets assessed based on its holdings (including, yes, property)? Or prevent companies from holding real estate as an investment vehicle? I'm not naive enough to argue that this is a definitively easy thing, but especially when it comes to housing, the poor and middle class are getting completely fucked right now; it's gotten t…

There's always the next trick. What if that corporation is also saddled with a bunch of debt, such that its net holdings is roughly zero? What if it bought those houses for very little money (from some other friendly corporation) so that, on paper, their value is very low? etc.

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

#348

Post by iflint » Thu, Dec 22, 2022, 3:31 PM UTC

bawolff wrote: post #47

smilekzs wrote: post #21

Earlier quoted context omitted.

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…

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…

There is a fairly simple way to tax wealth: inflation.

There are downsides to inflation of course, lower economic growth is a big one. But we are entering a higher inflation, higher interest rate environment whether we like it or not, and that will result in lower wealth inequality. Money will have less direct purchasing power, and assets like housing or company equity will decline in value due to higher borrowing costs.

There are many people who will retort that 'inflation hurts the poor'. Yes, it hurts everyone, but it disproportionately hurts the rich. It is no coincidence that wealth inequality increased dramatically during the low inflation, low interest rate period we have experienced over the last two decades.

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

#349

Post by hartator » Thu, Dec 22, 2022, 3:31 PM UTC

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…

Or maybe just align income tax on capital gain taxes?

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

#350

Post by 2devnull » Thu, Dec 22, 2022, 3:31 PM UTC

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…

There a thing called the Laffer Curve. It’s not as though politicians, whose job it is to spend money, and whom can easily get more popular votes by spending ever larger sums of money rather than budgeting in such a way that defers immediate gratification, have never thought of just taxing more (read history).