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Are super-rich people just better at making money?

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

#381

Post by polygamous_bat »

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…

> 92% of the US including 86% of people without homes in this country have Internet access.

Good point, but...

> We can all make incredibly informed decisions these days.

You need more than internet access to make good decisions. I cannot imagine living without a house or healthcare, eating food picked out of a dumpster behind a supermarket, and then being criticized because I made "less-informed" decisions even though I nominally have internet access at a library where the patrons scowl every time they see me in their peripheral vision.

People won't be able to magically make better informed decisions even with access to the information if they are too busy working three jobs to afford food, rent, or healthcare.

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

#382

Post by Aunche »

ChuckNorris89 wrote: post #203
543g43g43 wrote: post #167

Earlier quoted context omitted.

Ah, the mythical "super-rich" who could fund all of our solutions, if only we could prise their money out of their clutching hands! It's funny how they always exist, even in countries like the UK and France which in reality have taxed them out of existence, and payscales are absurdly compressed compared to the US. Careful what you wish for, you are someone else's "super rich".

>the UK and France which in reality have taxed them out of existence You're making it sound like billionaires are an endangered species there. :) Last time I checked there's more than enough billionaires living in the UK and France[1]. [1] https://en.wikipedia.org/wiki/Bernard_Arnault

That's the problem. The wealth of billionaires isn't tied to any particular country, so they always have the means to move their wealth to a tax haven. Calls to tax the rich always end up falling to the upper-middle/lower-upper classes (e.g. FAANG engineers who read HN).

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

#383

Post by SyzygistSix »

bmitc wrote: post #46
blfr wrote: post #14

Earlier quoted context omitted.

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...

I'm not for sure I agree, but that's a separate issue than de-concentrating wealth. What to do with tax funds, how to appropriately distribute them, etc. is another discussion. Just because those problems exist, we should allow more and more wealth to be concentrated?

It would be good to fix that before we start funneling even more money in that direction, yes. Or at least have a workable plan. If you have a leak in a pipe, you fix the leak before shunting even more into that pipe.

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

#384

Post by cpursley »

selfmodruntime wrote: post #72
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 funny thing is, you don't even need to tax the rich all that much. The money is there. It's just spent on ludicrous stuff. The US annual defense budget is 800 billion dollars a year. Even when you argue that national defense and a well equipped military are necessary (which I believe them to be), I've seen military cost receipts. They're outrageous. You don't need 50 dollar rolls of toilet paper.

Dropping income tax and replacing it with a progressive sales tax should be at least explored. Wealthy don't file W2s but they do buy luxury items.

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

#385

Post by robertlagrant »

Yizahi wrote: post #266
robertlagrant wrote: post #248

Earlier quoted context omitted.

I think inheritance tax has huge downsides. Past a certain age, if you've done reasonably well, and are thus most likely to make a huge impact for the better in your latter working years, why do that most useful useful work if you can't pass it on?

We can do it incrementally, so that majority op population is not affected much. And if a billionaire is discouraged from earning additional billions and retire - well, that was the point? He stops working (hypothetically) but his place will be immediately replaced by less wealthy successor (or by more wealthy opponent, but that problem need be analyzed separately). His kids won't become billionaires, but will be a m…

If you're thinking about billionaires, I think you're doing it wrong. Billionaires don't have billions in the bank. They generally have shares in companies which need to be sold to get money out. And the price changes the more you sell. Billionaire "net worth"s are almost useless because they assume each share they sell is worth the same as the last share traded, which would not be the case if they were all dumped on the market, and even less so if the government made a habit of seizing your shares when you die.

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

#386

Post by robertlagrant »

IntrepidWorm wrote: post #265
robertlagrant wrote: post #264

Earlier quoted context omitted.

This is what I mean. It's likely dangerous to disincentivise so many people in their most expert years from working.

Perhaps - I would think in many cases, an equilibrium would be reached. Comparatively few people in any industry are wholly irreplaceable. Still, should something like this just pop into law tomorrow, one could expect a large group of experienced specialists at the top of a wide array of fields to decide to retire, to disasterous effect. Given time to settle in though, I'd wager it likely that talent would filter up…

Talent won't filter up. You can't replace doctors with 40 years' experience with doctors with 30 years' experience (and keep going - who do you replace them with?) without losing a huge amount of value.

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

#387

Post by throwawaylinux »

mindslight wrote: post #364
dontreact wrote: post #304

Earlier quoted context omitted.

It’s hard problem that can only be solved through attempts and iteration. The fact that a wealth tax is difficult is not a good enough reason to not try, because the problem of wealth inequality is so severe now.

The problem with this hollowing out of the regulations government used to have, is that people react by jumping for extreme, impractical things like "wealth tax". Nobody is going to go for the idea that the government comes around and explicitly collects a significant percentage of everything you own every year. (And they already do much of what they can get away with through inflation and real estate taxes). Rather,…

> Nobody is going to go for the idea that the government comes around and explicitly collects a significant percentage of everything you own every year.

I think you'd be surprised. When the majority of people own nothing, it won't take much for the ruling class to convince them that taking everybody else's wealth for the greater good is the right and moral thing to do.

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

#388

Post by abigail95 »

gjulianm wrote: post #219
abigail95 wrote: post #74

Earlier quoted context omitted.

If this was true about wealth creation, intergenerational wealth would eventually outcompete everything else, while it looks like the opposite is true. Unless the people with money are the ones that made it themselves, they will keep buying bad watches like everyone else. The what they invest it in, is the whole point. If you spend your life and wealth playing 20% of your bankroll with zero expected value - you shoul…

> If this was true about wealth creation, intergenerational wealth would eventually outcompete everything else, while it looks like the opposite is true. Not outcompete, but intergenerational wealth does play a huge part in class mobility [1]. > The what they invest it in, is the whole point. If you spend your life and wealth playing 20% of your bankroll with zero expected value - you should completely expect not to…

I disagree with the conclusions you draw and how you apply them to this context.

Richer people don't have access to higher EV else their kids wouldn't have very similar relative mobility, they should be richer than their parents. And it seems that the risk of becoming downwardly mobile (absolute and relative) increases along with income. Which makes sense as some sort of mean reversion. Along with the bottom quintile having higher positive mobility than richer quintiles, EV increasing with income doesn't make sense to me.

The family with $500 should keep it as liquid as possible unless they have enough credit to cover drawdowns in income. Other than that - they get the same EV as everyone else. $500/yr at 7% over 40 years will get you $100k. How many people with $500 actually invest it? Historical lookback on 40 years of the S&P 500 gets you real return of 8.77%.

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

#389

Post by llbeansandrice »

robertlagrant wrote: post #192
spinchange wrote: post #150

Earlier quoted context omitted.

The working poor pay into FICA which is a greater percentage of their cash flow. They get it back upon annual tax reconciliation. The same entitlement programs nonetheless have lots of unfunded liabilities so the money has already been allocated even if it's not currently "there" -- 'The Rich' are beneficiaries of entitlement spending too.

It's a simpler situation than that. Regardless of proportions of payment, we already have a percentage of the population whose public services are paid for by someone else, either directly through income or divided tax or indirectly through higher prices from corporation tax, or more indirectly through inflationary monetary policy. In other words: we don't need to invent taxing people with more money more. We have th…

Your criticism of "Tax the Rich" is basically tone policing? I don't understand your point.
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