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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?

#471

Post by dragonwriter »

WalterBright wrote: post #466
dragonwriter wrote: post #462

Earlier quoted context omitted.

> > 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.

“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?

#472

Post by mrguyorama »

orcanwe wrote: post #262
pixelfarmer wrote: post #234

Earlier quoted context omitted.

Broken incentives? What about Boeing with their 737 MAX? That is a prime example of broken incentives costing human lives. What about stock trading causing famines? Our current way of doing "economy" is massively broken and affects everything.

Who said anything about people being infallible? Amusing to nitpick market failures when planned economies have all led to mass poverty and famine. And market economies have created, in the last 200 years, unparalleled prosperity.

Meanwhile every single one of these private companies you put up on a pedestal is LITERALLY a top down planned economy.

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

#473

Post by solarmist »

dhruval wrote: post #299
gjulianm wrote: post #43

Earlier quoted context omitted.

Some counterpoint thoughts: > - consensual trades are win win (you want a sandwich, I want $5 let’s trade! And we both win) Not all trades are exactly "consensual". The sandwich seller can probably live without selling a sandwich, I can't live without food, so the seller has far more power to set the price. Existing power imbalances make trades less fair, specially with essential goods (and that includes jobs, which…

1. Sure, I think there are degrees of consent - people enthusiastically lining up to get the latest sneaker / iPhone. - mildly enthusiastic grocery shopping. - overpriced medical drugs due to a monopoly. - taxation. - outright theft at gunpoint 2. Insightful, thanks. I think one variable the model doesn’t account for is time (which is not multiplicative and scarce). Money and power can be multiplicative so maybe most…

2.) Pretty much. That's the way I see it. They also take risks with their time in order to find multiplicative or even exponential results. Such as starting a business that might go nowhere.

Similarly, (from comment [1]) paraphrasing an idea from Victor Wooten's video. If you grow up around people that do interesting things with money then you'll learn to do interesting things with money too. (He said people who grow up around people who speak music naturally learn to speak music quickly and easily too.)

[1] https://news.ycombinator.com/item?id=34094950

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

#474

Post by Leherenn »

ChuckNorris89 wrote: post #306
Leherenn wrote: post #231

Earlier quoted context omitted.

You declare all the assets you own* in your tax declaration (bank accounts, properties, art, cars, equity, ...), even if abroad. You also declare your debts. I don't know how they enforce/check that, especially for foreign-based assets though. * except for household and personal common usage goods

OK, cool, but you didn't explain how does that fix wealth inequality in Switzerland or make wealth taxation fair? You just described a tax declaration system, not a taxation system. Anyone can declare assets anywhere but if they're not taxed, or taxed very little, then inequality grows. So does Switzerland do this better or fairer than other countries?

Well, you asked how it worked, not whether it was effective at fighting inequality.

My understanding is that it's not very effective, because any foreign-held asset is pretty much hidden from Switzerland, unless there's an agreement with the country for this kind of information.

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

#475

Post by dennis_jeeves1 »

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…

>A very simple distribution solution therefore is to stop privileging capital gains and tax all income equally.

An even more simpler solution would be to take away the all wealth of rich people and divide it among all people. The calculations would be a lot easier. Taxes are complicated.

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

#476

Post by WalterBright »

prottog wrote: post #337
renonce wrote: post #283

Earlier quoted context omitted.

Not familiar with the US tax code, but if Musk borrows $1b with a portion of his Tesla stocks as collateral, will he be charged capital gains tax by assuming that these stocks are now worth $1b?

In the US and most places, you are only liable for capital gains tax on realized gains. The shares have to change hands before a tax is due.

When you die, the value of the stock at time of death gets whacked by inheritance tax, which is 40% at the federal level and 20% at the state (in Washington) level.

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

#477

Post by WalterBright »

dragonwriter wrote: post #471
WalterBright wrote: post #466

Earlier quoted context omitted.

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

“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.”

Like what?

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

#478

Post by perfecthjrjth »

dennis_jeeves1 wrote: post #475
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…

>A very simple distribution solution therefore is to stop privileging capital gains and tax all income equally. An even more simpler solution would be to take away the all wealth of rich people and divide it among all people. The calculations would be a lot easier. Taxes are complicated.

Of course, when you become a dictator, you can do that. When will that happen?

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

#479

Post by dennis_jeeves1 »

perfecthjrjth wrote: post #478
dennis_jeeves1 wrote: post #475

Earlier quoted context omitted.

>A very simple distribution solution therefore is to stop privileging capital gains and tax all income equally. An even more simpler solution would be to take away the all wealth of rich people and divide it among all people. The calculations would be a lot easier. Taxes are complicated.

Of course, when you become a dictator, you can do that. When will that happen?

>When will that happen?

April 17, 2028.

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

#480

Post by ls15 »

naasking wrote: post #378
ls15 wrote: post #169

Earlier quoted context omitted.

You lost me at step 1. Punishing people because their families live in what some people deem "offshore" is heartless. Also, forget modern technology like smartphones if you only can do trade with "good" countries.

> 1. Punishing people because their families live in what some people deem "offshore" is heartless. If it were the only way to address societal inequalities, is it more heartless than letting those continue?

How do I know that it would not even worsen the situation, as it clearly would introduce other inequalities?
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