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

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

#401

Post by naasking » Thu, Dec 22, 2022, 4:32 PM UTC

joemazerino wrote: post #250

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…

Tax the rich and they leave. OP has made a fundamental mistake in their logic. Poverty and earnings aren't based on "coin flips".

> Tax the rich and they leave.

A common claim but never accompanied by actual evidence.

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

#402

Post by naasking » Thu, Dec 22, 2022, 4:34 PM UTC

sgjohnson wrote: post #37

lozenge wrote: post #30

Earlier quoted context omitted.

Your source doesn't address the amount of tax collected from the ultra wealthy in relative proportion to their wealth. It only addresses the amount as a percentage of the federal budget.

Do you seriously think that the ultra wealthy have ever paid the 90% tax rate?

The point is that the source you cited to claim they didn't doesn't actually prove that, so what reason do us random HNers have to believe you over the initial claim that the higher tax rate in the past actually addressed this problem?

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

#403

Post by feet » Thu, Dec 22, 2022, 4:34 PM UTC

SuoDuanDao wrote: post #340

feet wrote: post #252

Earlier quoted context omitted.

See step 4? They should probably add in an increased capital gains tax as well

what's to prevent a wealthy parent from gifting wealth to their children while alive? This seems like the easiest thing of all for someone with a competent accountant to circumvent. Bad for families building generational wealth who don't have it yet though, and boy do I hate the idea as a result.

In the current system 95% of families can't build generational wealth so the point seems moot

It's the temporarily embarrassed millionaire syndrome. Sorry but it just doesn't happen for most people due to the way the system works

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

#404

Post by naasking » Thu, Dec 22, 2022, 4:39 PM UTC

WalterBright wrote: post #81

bmitc wrote: post #25

Earlier quoted context omitted.

It isn't difficult at all. This is an oft repeated excuse. The rich use their wealth as collateral to purchase things, like homes, companies, investments, etc. and transfer wealth to inheritors with basically no tax. So stop worrying about trying to figure out how to tax unrealized wealth and start taxing the things that unrealized wealth helps secure and purchases. This is one way to force realization of that wealth…

> transfer wealth to inheritors with basically no tax. Other than 40% federal estate tax and 20% Washington state tax, which is right next to zero.

> Other than 40% federal estate tax and 20% Washington state tax, which is right next to zero.

Took me 5 seconds to Google this:

https://smartasset.com/taxes/5-ways-the-rich-can-avoid-the-e...

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

#405

Post by r00fus » Thu, Dec 22, 2022, 4:41 PM UTC

aqme28 wrote: post #335

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.

There are also some things that do work decently well that we don't do anymore for political reasons, such as estate taxes.

political reasons being: wealthy have gamed the politics and made those options "political".

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

#406

Post by r00fus » Thu, Dec 22, 2022, 4:44 PM UTC

bmitc wrote: post #76

bawolff wrote: post #47

Earlier quoted context omitted.

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…

The rich buy stuff, do they not? Tax those things to force realization and thus tax of unrealized wealth. Buying a second, third, fourth home? Here's your increasingly high tax and interest rate penalty. Instead of throwing up our hands with "they don't have cash", force them to realize investments into cash and deincentivize being able to keep everything hidden being investments and purchasing things with unrealized…

The tax/bankruptcy laws for homes, for example, are absolutely crazy. 2nd+ homes in the US can be written off but the first one cannot. Absolutely bizarre world policy that only makes sense if it were written by/for the wealthy.

Also corporate ownership of single-family residential property in the US should be forbidden.

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

#407

Post by naasking » Thu, Dec 22, 2022, 4:45 PM UTC

sgjohnson wrote: post #19

hackerman123469 wrote: post #12

Earlier quoted context omitted.

But tell me, how are you going to tax the super rich? It's incredibly difficult to tax someone who's actually poor on paper. Most super rich people actually don't seem to have much wealth officially declared, all of their wealth is sort of like "pseudo" in that it's all tied up in assets, and sometimes assets that aren't directly owned by them but their companies etc. and they have a lot of shortcuts for tax breaks o…

More importantly, the super rich get to choose when, how, how much, and where, and from where they are paid. And even more importantly, they all live on low interest ELOCs. There's also no reasonable way of fixing this.

> There's also no reasonable way of fixing this.

Assuming that's true, and given that the current situation is also unreasonable, I guess we'll just have to go with an unreasonable way of fixing it.

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

#408

Post by sgjohnson » Thu, Dec 22, 2022, 4:46 PM UTC

greedo wrote: post #291

sgjohnson wrote: post #33

Earlier quoted context omitted.

Looking at the total world population is completely meaningless. This is because fertility rate in virtually every developed country is below 2, however there are extremely poor countries where the population is exploding with fertility rates above 8. > To put it another way, as of 2010, 388 individuals possessed as much household wealth as the lower half of the world's population combined—about 3.5 billion people; t…

Bezos may not be able to sell his shares in significant amounts, but he can sure use them for collateral. This is a very basic strategy for the super rich...

Yes, I mentioned it above. There’s no way of stopping it, because the modern financial system is extremely dependent on such collaterization.

Bezos uses it to spend his pile of money, but for one Bezos there are 100 businesses who use the same exact instrument as a perfectly legitimate way to borrow money.

It’ll be extremely hard to draw the line between both use cases in a way Bezos couldn’t exploit it.

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

#409

Post by Eisenstein » Thu, Dec 22, 2022, 4:47 PM UTC

mcculley wrote: post #399

Eisenstein wrote: post #317

Earlier quoted context omitted.

There are lists of chemicals people cannot own, why can there not be lists of things corporations cannot own?

I am wondering about the details. Would you prohibit anything that could be used as a residence? Office buildings would be permitted? I live in an apartment unit in a 24 story tower. It is owned by a corporation and I lease it. Would only condos owned by humans be permitted?

Me, personally? I don't know -- there are smarter people than I who can come up with lists. I was remarking about the idea itself.

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

#410

Post by naasking » Thu, Dec 22, 2022, 4:49 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…

> This is a dishonest piece. [...] If you think this game through, you'll still end up with super wealthy outliers and bankruptcies, but the players in the game actually have some agency.

You basically admitted that the zero sum property has little bearing on the outcomes we're scrutinizing here, and so the argument is ultimately the same. I'm not sure how the piece is dishonest simply because it dispenses with an apparently irrelevant premise.