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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?

#461

Post by ThunderSizzle »

cloutchaser wrote: post #441
burlesona wrote: post #377

There are two core insights here that are actually pretty obvious: 1. 20% of 1200 is more than 20% of 800. Duh! But the practical insight is simply that people with more wealth can afford bigger bets and expect bigger payouts. 2. Many systems are sensitive to initial conditions. In this model, the first coin flip matter vastly more than all others and determines almost the entire outcome. As others have pointed out t…

Another solution is for the fed to stop pumping the stock market for the last 14 years like crazy and offering free money to the finance sector. Frankly blaming actual entrepreneurs and business owners for the gains in the stock market is such a misguided target it’s insane. The only reason Musk, bezos and others have gotten so insanely rich recently is because the fed had increased its balance sheet by about $8trn.…

The other part is the stock market basically became a government-enforced ponzi scheme through 401ks, 403ba, HSAs, IRAs and other tax advantaged accounts. Of course stock prices will go up as long as people are forced to use arbitrary stock funds for retirement to avoid crippling taxes.

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

#462

Post by dragonwriter »

WalterBright wrote: post #458
ti00 wrote: post #343

Earlier quoted context omitted.

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...

You're right, and then you pay the inheritance tax which is more than the capital gains taxes would have been.

> > And then you pay the 40% federal inheritance tax and the 20% state inheritance tax on the total value at the date of death.

After the $12 million (nearly $13 million next year) exemption, the unused portion of which passes to the surviving spouse and increases their tax-free estate exemption.

But, yes, in the limit case estates aren't the tax-optimal way to transfer capital to survivors, which is why other vehicles are used for people for whom the estate exemption is small potatoes.

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

#463

Post by mrguyorama »

smilekzs wrote: post #133
nemo44x wrote: post #32

Earlier quoted context omitted.

Is this a new form of NIMBY taxation? “Tax the rich but not rich people like me!”?

You too are conflating wealth ("rich people") and income ("me").

At a certain point, a high enough income IS wealth. How many american's become millionaires? How many SF software developers can become a millionaire in just a few years?

If you make $400k a year, you are rich/wealthy. If you don't feel it, re-examine your lifestyle and whether you are actually spending your money well, maybe you're buying too much avocado toast /s

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

#464

Post by 543g43g43 »

nobodyandproud wrote: post #436
543g43g43 wrote: post #434

Earlier quoted context omitted.

>Hurun reports are widely cited with few (if any) questions on its accuracy. I could make the same statements about Forbes and Knight Frank, so that doesn't help explain the 3x disparity between Hunan's figures and the rest. >it's an inaccurate objection proven by 1 minute of research: I too found that list of the globe's billionaires. As we are comparing the rates of billionaires in the US, UK, and France, that page…

> Shame Hurun doesn't publish its source data, or a list of those people > I too found that list of the globe's billionaires. As we are comparing the rates of billionaires in the US, UK, and France, that page doesn't help. The raw data is there to help you derive and check Hurun’s claim. Perhaps you mean you want an easy way to sort and aggregate the information in order to dispute this. However, the burden is on you…

> you mean you want an easy way to sort and aggregate the information in order to dispute this.

For a start, I need the list to include the country of origin of each person.

>he burden is on you to do this as you’re the one questioning the accuracy of the widely cited Hurun list.

I've pointed out that Hurun don't make public their list of billionaires per country, unlike the other providers of that data. As no-one yet has been able to show otherwise, my point stands.

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

#465

Post by WalterBright »

naasking wrote: post #392
WalterBright wrote: post #62

Earlier quoted context omitted.

The top 1% pay 40% of the federal tax revenue. The top 5% pay 60%. California has the highest income tax at 13.3%, the highest federal tax rate is 37%. That makes the top income tax rate 50%.

> That makes the top income tax rate 50%. While interesting data points, I'm not seeing an argument that they are paying enough, which seems to be your implication. Maybe it should be 90%. Maybe it should be even more.

Make taxes too high, and who is going to invest in America? It will be a Pyrrhic victory for you.

We already see wealthier people fleeing California for Texas and Florida, the same for New York.

It's not the government that produces the wealth in the economy, it's business. Confiscatory taxes will wind up with everyone poorer, including you.

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

#466

Post by WalterBright »

dragonwriter wrote: post #462
WalterBright wrote: post #458

Earlier quoted context omitted.

You're right, and then you pay the inheritance tax which is more than the capital gains taxes would have been.

> > And then you pay the 40% federal inheritance tax and the 20% state inheritance tax on the total value at the date of death. After the $12 million (nearly $13 million next year) exemption, the unused portion of which passes to the surviving spouse and increases their tax-free estate exemption. But, yes, in the limit case estates aren't the tax-optimal way to transfer capital to survivors, which is why other vehicl…

If you're a billionaire, a $12m exemption isn't much of anything.

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

#467

Post by WalterBright »

bmitc wrote: post #112
WalterBright wrote: post #62

Earlier quoted context omitted.

The top 1% pay 40% of the federal tax revenue. The top 5% pay 60%. California has the highest income tax at 13.3%, the highest federal tax rate is 37%. That makes the top income tax rate 50%.

I have already covered this elsewhere, but that's an excuse and actually only points to how concentrated the wealth is. Too bad they pay more money than others. Tax them more.

The wealth that wealthy people have isn't "concentrated", it's created. I.e. they didn't take it from you.

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

#468

Post by 0xmarcin »

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…

I think there is a problem with using money to measure wealth. Maybe a better question may be to check how land or housing is distributed among people? If 10% wealthiest decided one day to e.g. purchase land, the effect would be: 1) equity/bonds or whatever they are using to store their wealth would plummet and crash 2) land price would skyrocket. So suddenly they would not be that rich. I think much of the wealth is overvalued currently, it is like with Bitcoin, the price is crazy because not much people are willing to sell.

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

#469

Post by mrguyorama »

dsfyu404ed wrote: post #351
danny_codes wrote: post #240

Earlier quoted context omitted.

Before Kennedy it was 91%. Imo we are well bellow the Laffer curve.

>Before Kennedy it was 91%. To which the common retort is "but nobody actually paid that because prior to the tax code simplifications of the 70s you could trivially reduce your burden in all sorts of ways"

Then surely, they would have no problem returning to that exact system right? No they want to avoid that by all means necessary? Sounds like they know how much it truly effects things.

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

#470

Post by mrguyorama »

Beldin wrote: post #146
an-allen wrote: post #106

Earlier quoted context omitted.

This all presupposes that the government is an efficient user of capital, when its pretty clear its not. Heavy taxes on the rich, means that capital investments that a rich person might finance, become government programmes and bureaucracies. Theres obviously a sweet spot here - but rich folks are good at creating capital and governments are notorious for wasting it. Now in the US I probably don’t have to tell you wh…

> but rich folks are good at creating capital and governments are notorious for wasting it. There is more than a little nuance here: - governments are notorious for being called out on supposed inefficiencies. Too often, it turns out that there were very good reasons for those inefficiencies, but the criticasters forgot the lesson. - "rich folks are good..." I wouldn't know. Superrich folks are good at manipulating t…

I've never understood the argument. I've worked in several different private companies, and calling them "Efficient" is so off base as to be laughable. Remember, a private company will happily let an import engineer go instead of giving them a small raise.
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