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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?

#501

Post by astrange »

gnull wrote: post #491
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…

> If we made it much much easier to build housing then then rental housing market would be like the used car market: viable but not an easy place to sit back and make passive income. You're overthinking it. Sweden made renting out apartments unattractive without all this sophistication, they just regulate the prices and keep them low.

Don’t Swedes just rent them out on the black market instead?

They also can’t seem to get a sufficient supply of washing machines and instead have a laundry bureaucracy.

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

#502

Post by astrange »

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.

It wouldn’t exist anymore then.

Bezos is wealthy because Amazon investors want to give him money; they don’t want to give you money, so if you had the Amazon shares they simply wouldn’t be worth anything.

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

#503

Post by astrange »

kelseyfrog wrote: post #325
klgkjghkjh wrote: post #249

Earlier quoted context omitted.

How would apartment complexes be sold then?

Sell them to land trusts, co-operatives, and housing unions. There are creative and viable alternatives.

Most of those are bad; at least if a landlord is only interested in money they’ll take your money. In the “decommodified” forms, you can’t live there unless the manager personally likes you.

With government public housing you can lose it if you break the law (hope you never smoke weed) or if the populace elects a racist government and you’re a minority.

Commodifying housing helped black people in the South because they could actually buy prefab houses from Sears.

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

#504

Post by naasking »

ls15 wrote: post #480
naasking wrote: post #378

Earlier quoted context omitted.

> 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?

Well that's a different argument than saying it's heartless. The point I'm making is that it being heartless is not an argument against an evidence-based policy that would help more people.

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

#505

Post by astrange »

jmyeet wrote: post #175
FiberBundle wrote: post #158

Earlier quoted context omitted.

I agree. Taxing unrealized capital gains is just not a good idea at all. What's more problematic than people having huge sums of unrealized book value, is that in the current system they're allowed to live a lavish lifestyle by taking out loans against those assets (which effectively is an income for them) without paying any taxes at all. That is what should be taxed in some form.

We tax property without realizing a gain. We even tax bonds on deferred interest (eg zero coupon bonds). We can and should do this for stocks. The ultra-rich already borrow money to avoid realizing gains (and thus paying taxes). If they want to keep their stocks let them borrow to pay their tax bills.

Property taxes are pretty bad! Everyone hates paying them, retirees can’t afford them, and they tax building improvement which motivates owners to tear down their buildings.

LVT is a much better related tax.

Anyway, wealth taxes are probably bad because taxes are supposed to be deflationary, but wealth taxes are inflationary if you collect them in USD, since taxpayers have to sell assets first. Unless the IRS is willing to take a % interest in a collectible painting as the tax.

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

#506

Post by Eisenstein »

mcculley wrote: post #482
Eisenstein wrote: post #435

Earlier quoted context omitted.

Until someone comes up with a proposal I guess we will never know.

I responded to a proposal with no apparent thought behind it.

I meant a formal proposal as by a legislature.

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

#507

Post by cinntaile »

astrange wrote: post #501
gnull wrote: post #491

Earlier quoted context omitted.

> If we made it much much easier to build housing then then rental housing market would be like the used car market: viable but not an easy place to sit back and make passive income. You're overthinking it. Sweden made renting out apartments unattractive without all this sophistication, they just regulate the prices and keep them low.

Don’t Swedes just rent them out on the black market instead? They also can’t seem to get a sufficient supply of washing machines and instead have a laundry bureaucracy.

> They also can’t seem to get a sufficient supply of washing machines and instead have a laundry bureaucracy.

Sounds like you're just ill-informed? There are shared washing machine rooms in a lot of apartment complexes, although it is getting more rare in newer apartment complexes. You can usually book a slot and then you do your laundry. There is absolutely no shortage of washing machines though.

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

#508

Post by raincom »

What is the optimal size of a bet? This is called "Kelly bet". Even before Black-Scholes came into existence, Edward O. Thorp, a billionaire mathematician, figured out the innards of Black-Scholes strategy and made money for himself using Kelly strategy.

If you invest in some stock, and if that stock is moving in your favor, you should increase your bet or leverage more. If your bet is moving against you, cut down your bet size. That's what experienced traders do--just reduce your position by 50 percent; inexperienced/retail traders tend to increase their position, when things go against them.

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

#509

Post by [deleted] »

tgsovlerkhgsel wrote: post #496
ChuckNorris89 wrote: post #199

Earlier quoted context omitted.

Can you give some details for the non initiated?

You pay a (progressive) % of your wealth in tax every year, based on your declaration. Financial institutions report your wealth (to some extent), and the development of wealth is checked against your income, making tax evasion non-trivial. You could hide the money in a shoebox but you'll lose more in opportunity cost (missed investment gains) than you'll save on tax. The other side of the coin though is that capital…

[deleted]

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

#510

Post by dennis_jeeves1 »

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.

Had 2 people fall for this already, fellow HNers, my above statement was said in sarcasm. Of course there are people here who are stupid enough to suggest it for real.
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