How America's Top 20 Percent Perpetuates Inequality • Hacker News Board

Re: How America's Top 20 Percent Perpetuates Inequality

#51

Post by weberc2 » Thu, Jun 01, 2017, 12:57 PM UTC

jamescostian wrote: post #38

jacob019 wrote: post #22

Earlier quoted context omitted.

While I would love to live in a more equal society, history shows time and again that government efforts to redistribute wealth mostly destroy it. We should try to devise systems that prevent power from centralizing in the first place.

> efforts to redistribute wealth mostly destroy it Not sure what you mean by this. Isn't the goal here to destroy a lot of wealth? Wealth is a relative term - someone with $1B is not rich because 1B is an inherently big number, they are rich because $1B is orders of magnitudes greater than what most people will make in their lifetimes. Making people all have about the same in the bank other would destroy wealth.

He means that by trying to redistribute wealth, we end up with less overall to go around. Something like a smaller GDP, though I don't know if that's the metric the parent has in mind. I also don't know how true this argument is; I'm just the messenger.

Re: How America's Top 20 Percent Perpetuates Inequality

#52

Post by CPLX » Thu, Jun 01, 2017, 12:59 PM UTC

IanDrake wrote: post #31

"First they came for the Socialists, and I did not speak out— Because I was not a Socialist. ... Then they came for me—and there was no one left to speak for me." Now replace the socialist, trade unionist, and Jews from this famous quote and insert your income percentile to see what's going on here. I said this during the occupy movement. It's not the 1%, not the 2%, not the 10%, not even the 20% that need to be worr…

> What people who promote class warfare desire is financial results without work or risk because that's how they perceive those with money attained it.

You're talking about billionaire promoters of class warfare like Thomas Friedman or Jared Kushner right?

Re: How America's Top 20 Percent Perpetuates Inequality

#53

Post by gizmo » Thu, Jun 01, 2017, 1:01 PM UTC

jacob019 wrote: post #22

aaron-lebo wrote: post #17

Earlier quoted context omitted.

He may (or may not) be contradicting himself, but the argument isn't wrong. By hoarding wealth, the richest prevent their own wealth from growing (out of risk aversion and greed), and they end up either voluntarily transferring wealth or it's taken from them by an angry underclass. You can see why (after the fact), they would've preferred the former. Posted this yesterday but Acemoglu and Robinson's Economic Origins…

While I would love to live in a more equal society, history shows time and again that government efforts to redistribute wealth mostly destroy it. We should try to devise systems that prevent power from centralizing in the first place.

History shows no such thing.

Making college free (or at least easily affordable) is highly redistributive and highly accretive. See also: public transportation, affordable childcare, and so.

You're not just wrong when you say that government efforts to redistribute wealth mostly destroy it. The opposite is true: funding the commons through progressive taxation makes modern society possible. Redistribution is at the absolute core of everything the government does.

Re: How America's Top 20 Percent Perpetuates Inequality

#54

Post by smileysteve » Thu, Jun 01, 2017, 1:02 PM UTC

havella wrote: post #34

bluedevil2k wrote: post #23

Earlier quoted context omitted.

"529 type contributions to Roth-IRA" -- They do, it's called a Roth IRA

mmm perhaps lack of clarity on my comment. I was referring to the size of the maximum contribution. $14000 for 529 vs 5500 for ROTH and there's an income limit for ROTH. ~190k

For that, we have the Roth 401k. Certainly 401ks aren't limited to the 20%, but the 20% can certainly contribute more easily and get more nominal matching.

Re: How America's Top 20 Percent Perpetuates Inequality

#55

Post by flexie » Thu, Jun 01, 2017, 1:03 PM UTC

The article says top 20 percent consists of the households making $112,000 or more.

Many of those families live in places like New York or California where $112,000 is not much.

The families I know in New York City making around $2-300,000 live paycheck to paycheck in tiny, old rented apartments. Both parents work until 6-8 PM, they barely see their kids except in weekends. They spent the first decade or so after college paying off student debt and now they have five figure credit card debt. Their life is void of luxury. No cars, no fancy vacations, no real estate, no savings, no shares, often no pensions savings either. Everything is spent on kindergartens, nannies, schools, rent etc.

You may be upper middle class if your family makes $112,000 in Oklahoma. But it simply doesn't make sense to regard people in New York City or the Bay area with such salaries as upper middle class.

Re: How America's Top 20 Percent Perpetuates Inequality

#56

Post by ajuc » Thu, Jun 01, 2017, 1:04 PM UTC

I never understood that about USA.

Free (or at least affordable) university education is one of the most cost-effective investments a state can make. I've seen it work wonders in Poland in the last 25 years. And I don't mean "education to become academic scientists" - that part sucks in Poland. I mean "education to become globally competitive in high-margin areas of economy". It's cheap, it benefits economy in many ways, and it lowers the inequality. If Poland can afford it (and could afford it when it had GDP per capita under 10 000 USD) - USA can too.

Also - economy is not zero-sum. Yes, top 20% is always 20%, but if the division between incomes of top 20% and top 30% is negligible - why should we care about top 20%?

And if your country has 20% of people that can compete on global market, but other countries have 40% or 60% - you're screwed. Well, I guess you can just import them instead of teaching your own, but what to do with these non-competitives you're left with?

Re: How America's Top 20 Percent Perpetuates Inequality

#57

Post by stult » Thu, Jun 01, 2017, 1:09 PM UTC

rbcgerard wrote: post #29

I always get a little annoyed when people talk about benefits of some tax deduction accruing to the "rich". It's not that it's technically wrong but, but rather a sort of a truism - if you can take the max deduction and have a high marginal tax rate you will accrue more benefit (whether it's 529 or mortgage interest deduction). That being said, you also are likely to pay more taxes both nominally and proportionally i…

The problem is when these tax expenditures become a substitute for more inclusive policies. Congress passes a tax deduction and then claims they have done something to address unaffordable tertiary education, when in fact they've only helped the people who least need it: people who could probably afford tuition anyway and whose children are most likely to qualify for academic and athletic scholarships.

Re: How America's Top 20 Percent Perpetuates Inequality

#58

Post by crusso » Thu, Jun 01, 2017, 1:09 PM UTC

tnzn wrote: post #36

jacob019 wrote: post #22

Earlier quoted context omitted.

While I would love to live in a more equal society, history shows time and again that government efforts to redistribute wealth mostly destroy it. We should try to devise systems that prevent power from centralizing in the first place.

Is that because the government redistributes the wealth, or because the powerful ones make it so that redistributing the wealth doesn't work ? (ie tax evasion)

Yes.

Re: How America's Top 20 Percent Perpetuates Inequality

#59

Post by weberc2 » Thu, Jun 01, 2017, 1:11 PM UTC

tnzn wrote: post #36

jacob019 wrote: post #22

Earlier quoted context omitted.

While I would love to live in a more equal society, history shows time and again that government efforts to redistribute wealth mostly destroy it. We should try to devise systems that prevent power from centralizing in the first place.

Is that because the government redistributes the wealth, or because the powerful ones make it so that redistributing the wealth doesn't work ? (ie tax evasion)

The explanation I've heard is that it disincentives people from the hard work which creates wealth. Anyway, I don't think your explanation "the rich undermine wealth redistribution" explains the parent's conclusion that wealth is destroyed (a failure to redistribute wealth doesn't necessarily result in less wealth overall).

Re: How America's Top 20 Percent Perpetuates Inequality

#60

Post by Para2016 » Thu, Jun 01, 2017, 1:13 PM UTC

KozmoNau7 wrote: post #37

IanDrake wrote: post #31

"First they came for the Socialists, and I did not speak out— Because I was not a Socialist. ... Then they came for me—and there was no one left to speak for me." Now replace the socialist, trade unionist, and Jews from this famous quote and insert your income percentile to see what's going on here. I said this during the occupy movement. It's not the 1%, not the 2%, not the 10%, not even the 20% that need to be worr…

"What people who promote class warfare desire is financial results without work or risk because that's how they perceive those with money attained it." Which also happens to be the truth. Sure, hard work and risk were involved, but generally not on the part of the people who ended up with the money.

As another commenter pointed out, to be in the top 20% a household only needs to earn $112k a year. That's like 2 teachers getting married, or 2 nurses, or 2 mid level office workers/government workers.

And this college fund implies there are kids involved. So a household with $112k/year and kids should be taxed heavily as possible because they didn't earn it? If they live in a high cost area or have any debt/medical problems they'll be in even more trouble.

It sounds to me like you want to tax and burden families such as that to move them back down into the income strata where there is uncertainty for housing/medicine/food/education/transportation. Why don't you like the idea of people working and earning an income in order to remove those uncertainties? That's all I want to do with my life. Is that such a terrible desire that when I finally get there I should have it taken away? By the way, I'm a recent medical graduate with 250k in debt from a lower-middle class family. If all goes well I'll be one of those evil 20% people after residency.