Economists Are Rethinking the Numbers on Inequality • Hacker News Board

Re: Economists Are Rethinking the Numbers on Inequality

#351

Post by dorfsmay » Thu, Dec 05, 2019, 10:21 PM UTC

FabHK wrote: post #346

dorfsmay wrote: post #329

Earlier quoted context omitted.

Consumption tax are paid once. Property tax are every year! If you put that money in the bank, you'd only pay taxes on the cap gain, not on the capital itself.

Consumption taxes are paid every time you consume something. You buy an ice cream and eat it, you paid VAT on it. Now with a house, the consumption is living in it, and while you own the house, you pay for that consumption at some rate. A bigger, more expensive house corresponds to more consumption, and thus you pay more tax on it. Consumption of a house is basically the product of house value and time, and that's wh…

What if you're into houses, you don't have a car, don't have a computer, you spend all your money on a nice house. Why should you pay more local taxes than people who pay one-time taxes on stuff (computers, music, clothing#?

If we believe rich people should pay more taxes (higher percentage), then we have already established a system for this. Why not making local taxes a fraction of income taxes?

Why are lower class people who's only capital is their house taxed on their capital, while rich people who own bonds and stock not get taxed on THEIR capital?

Re: Economists Are Rethinking the Numbers on Inequality

#352

Post by tsimionescu » Fri, Dec 06, 2019, 8:54 AM UTC

bhupy wrote: post #87

tsimionescu wrote: post #73

Earlier quoted context omitted.

Unfortunately, you can't have a real democracy with too high income inequality, and it is hard to reduce absolute poverty if the poor don't have a political voice.

This is an often used argument, but can you elaborate how exactly that's the case? In most western democracies (the US included), the only way to elect a politician is for a human being to go to the polls and check the box next to the candidate's name. This opportunity is present regardless of whether one is a billionaire, a millionaire, a member of the upper-middle class, or a blue collar worker. A real world exampl…

There were some good arguments from another user on this topic, but I wanted to also raise another direction.

To have a true democracy, free elections are not the only necessity. You also need wide representation of popular ideas among the candidates of the election; and you need the winning candidate to at least take steps towards enacting the policies that they were elected for.

Income inequality works very strongly at these two steps - gating access to candidates which hold certain political opinions to the election itself; and ensuring that certain campaign promises never get delivered on, regardless of election results.

For an example of the former, compare Gallup poll results on public healthcare to the positions of candidates in any election so far - tough at least 48% if the population has been in favor of a public option for a decade, there has been no candidate for presidential elections that had even offered that.

For the latter, again Healthcare can prove a useful example, comparing Obama's campaign promises of drug price negotiation to the final resulting law proposal, which essentially had no change that could affect the insurance companies' bottom lines.

Re: Economists Are Rethinking the Numbers on Inequality

#353

Post by anoncake » Fri, Dec 06, 2019, 1:18 PM UTC

CryptoPunk wrote: post #226

carlob wrote: post #69

Earlier quoted context omitted.

Before income tax, nobody had any idea about who was making what. Fast forward 100 years and we still have no idea about who holds how much capital. Even if you disagree on a universal wealth tax (just like we have for income) there is an argument to be made that it is important information to policymakers. Other than that Piketty argues that larger wealth means larger returns (per unit capital) and that is a very st…

>>Before income tax, nobody had any idea about who was making what. That's precisely why the income tax is socially harmful. It forces people to divulge intimate personal information to the state, under pain of imprisonment. It's nothing less than warrantless mass surveillance. The government having this much information on people creates an information asymmetry in society that makes the state incomparably powerful…

> The government having this much information on people creates an information asymmetry in society that makes the state incomparably powerful relative to private citizens.

Government, in a democratic society, is simply the citizens wielding their power collectively. It cannot possibly be more powerful than the citizens it serves.

Re: Economists Are Rethinking the Numbers on Inequality

#354

Post by anoncake » Fri, Dec 06, 2019, 1:21 PM UTC

unstrafed wrote: post #330

60654 wrote: post #7

This 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…

> This 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;…

Piketty's arguments are both wrong and tautological? Fascinating.

Re: Economists Are Rethinking the Numbers on Inequality

#355

Post by anoncake » Fri, Dec 06, 2019, 1:22 PM UTC

logicchains wrote: post #34

SamBam wrote: post #19

Earlier quoted context omitted.

"Why doesn't everyone just get rich?"

Because a good chunk of people suck at delayed gratification so are incapable of saving money. Even on an average income it's not unfeasible to retire a millionaire if saving a significant percent (and indeed there are people who do this, small businesspeople and tradespeople, the "millionaires next door").

When people are incapable of something, it isn't feasible for them. It doesn't really matter why "everyone getting rich" doesn't work.

Re: Economists Are Rethinking the Numbers on Inequality

#356

Post by anoncake » Fri, Dec 06, 2019, 1:25 PM UTC

pksdjfikkkkdsff wrote: post #119

SketchySeaBeast wrote: post #76

Earlier quoted context omitted.

That's silly - compared to cavemen, even workers in third world countries are "rich", being able to trade things for goods and services and not being required to hunt and gather. Inequality solved?

Why exactly is inequality a problem? Because people suffer from their envy? 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. There are also actually differences in skills, performance, diligence, and so on. It would be very unfair if some people weren't allowed to earn more money than others. Whether it…

> Why exactly is inequality a problem? Because people suffer[...]?

Yes. That and the fact that rich people don't gain as much utility from additional wealth, making inequality inefficient.

> Whether it should be possible to be arbitrarily rich is another question.

No, it isn't. Unless you think wealth is somehow intrinsically a problem even if it's equally distributed.

Re: Economists Are Rethinking the Numbers on Inequality

#357

Post by FeloniousHam » Fri, Dec 06, 2019, 4:24 PM UTC

beerandt wrote: post #231

FeloniousHam wrote: post #159

Earlier quoted context omitted.

> 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.

That's one of the top defining characteristics of "economic leftist" type systems. Either you don't fully grasp the implications of such a policy, or you may want to re-evaluate your economic self-identity. I'll add- it's not just the rich that this hits. This means taking a family's home when parents die, unless they pay for it again. Which means it's basically an incentive for people to rent everything and own noth…

A couple points:

1. The government must be funded, taxes are inescapable

2. Financial/material inheritance is inherently cosmically unfair (Paris Hilton and orphan street dweller have equal merit claim to the Hilton fortune)

3. Your children's "inheritance" is their genetic endowment, the benefits of being raised by you, and whatever material help you can provide during your lifetime

4. The details (and loopholes) of the implementation are an exercise for the student (I'm not super concerned whether a "family farm" must be liquidated, or how every last penny of Warren Buffett's fortune is confiscated)

> Which means it's basically an incentive for people to rent everything and own nothing.

This may be true toward the end of one's life, and I'm not sure this is a bad thing. Your children's inheritance is a distant concern for most your time on earth; your savings is almost entirely a prudent hedge against a lean harvest.

FWIW, I am strongly against (national) Government expansion, and would be fine with just setting all the confiscated funds on fire.

Re: Economists Are Rethinking the Numbers on Inequality

#358

Post by FeloniousHam » Fri, Dec 06, 2019, 4:32 PM UTC

pyuser583 wrote: post #307

FeloniousHam wrote: post #159

Earlier quoted context omitted.

> 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 b…

> Then the dead guy will give all his money to his kids before dying.

Don't let the perfect be the enemy of good enough. Inequality is a fundamental part of human existence, but I'd prefer that inequality to be as much as possible an expression of individual merit rather than a financial windfall as a result of parental success.

As I mention in another reply, your "inheritance" is what you get while your parents are alive.

Re: Economists Are Rethinking the Numbers on Inequality

#359

Post by bhupy » Fri, Dec 06, 2019, 5:09 PM UTC

tsimionescu wrote: post #352

bhupy wrote: post #87

Earlier quoted context omitted.

This is an often used argument, but can you elaborate how exactly that's the case? In most western democracies (the US included), the only way to elect a politician is for a human being to go to the polls and check the box next to the candidate's name. This opportunity is present regardless of whether one is a billionaire, a millionaire, a member of the upper-middle class, or a blue collar worker. A real world exampl…

There were some good arguments from another user on this topic, but I wanted to also raise another direction. To have a true democracy, free elections are not the only necessity. You also need wide representation of popular ideas among the candidates of the election; and you need the winning candidate to at least take steps towards enacting the policies that they were elected for. Income inequality works very strongl…

> To have a true democracy, free elections are not the only necessity. You also need wide representation of popular ideas among the candidates of the election; and you need the winning candidate to at least take steps towards enacting the policies that they were elected for.

Not sure that this is ever a prerequisite of a "true democracy". Campaign promises can only be successfully delivered if the legislature allows it, and the members of the legislature are also democratically elected. We do have a wide representation of popular ideas in Congress (see: members in Congress ranging all the way from AOC to Rand Paul), it's just that some ideas have not quite found broad bipartisan support across the large heterogenous polity that is the United States. The bar to pass law at the Federal level is extremely high: it needs to pass 2 houses + signed by the President, all separately, yet (in varying forms) democratically elected.

> For an example of the former, compare Gallup poll results on public healthcare to the positions of candidates in any election so far - tough at least 48% if the population has been in favor of a public option for a decade, there has been no candidate for presidential elections that had even offered that.

Support plunges when the polled respondents are asked if they would support the funding strategy (higher taxes) [1]

> For the latter, again Healthcare can prove a useful example, comparing Obama's campaign promises of drug price negotiation to the final resulting law proposal, which essentially had no change that could affect the insurance companies' bottom lines.

You'd have to reconcile why the same voters are voting for members of the House of Representatives and Senate that have opposed Obama's agenda. Both political branches of government (Executive and Legislative) are democratically elected.

All this being said, there is a public option that has passed in the state of Washington. [2] San Francisco also has a public option [3], and the state of California is currently reckoning with lukewarm popularity for a statewide single payer system [4].

[1] https://apnews.com/4516833e7fb644c9aa8bcc11048b2169

[2] https://www.pewtrusts.org/en/research-and-analysis/blogs/sta...

[3] https://healthysanfrancisco.org/

[4] https://newrepublic.com/article/143650/killed-single-payer-c...

Re: Economists Are Rethinking the Numbers on Inequality

#360

Post by s1k3b8 » Sat, Dec 07, 2019, 2:11 AM UTC

intarga wrote: post #333

s1k3b8 wrote: post #316

Earlier quoted context omitted.

> A lot of this article reminded me of the techniques used by climate change deniers to sow doubt. And a lot of climate change advocates' technique reminds me of the religious zealots of the past. Even down to the ad hominems like "Christ denier"/"climate change denier". Firstly, I don't believe climate change is a matter of "belief". No such thing as a "climate change denier". Climate change is an intrinsic part of…

>If climate change was a developed science and we understood climate change adequately, we wouldn't have so many climate change models. We would have ONE. In physics we have a dozen different models of gravity, yet we're still pretty sure that if you jump out of a building you're going to fall downward.

> In physics we have a dozen different models of gravity

We have general relativity. Newtonian gravity is kept around for legacy's sakes and ease of calculation. Also, there is a difference between "different" models of gravity that gives the same results/predictions given the same input and different climate models that give different results/predictions given the same input.

> yet we're still pretty sure that if you jump out of a building you're going to fall downward.

If I drop a ball from the window, every valid model of gravity gives the same time for when the ball will hit the ground. If the models of gravity were like the climate models, we'd have dozen different times for when the ball hits the ground. We'd have 1s, 5s, 3s... Hell one result would claim the ball will float up and never hit the ground.

If the gravity models were like climate models, we would not be able to fly planes.

This is why climate change advocates are so disappointing. The complete lack of understanding of science and yet that ignorance makes them pretend they are an authority on science.