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Just Be Rich

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Re: Just Be Rich

#551

Post by Joker_vD »

janeroe wrote: post #448
o_p wrote: post #76

Earlier quoted context omitted.

Economy is closer to a zero-sum game, after all theres limited resources in a period of time. We cannot be all rich because we cannot all own the capital, if we did, who does the work? To invest you need workers, to produce you need consumers, to rent you need renter, etc. Then the rich class exist because theres a poor class, a zero-sum game.

[flagged]

The pro-communist argument really is founded on two points:

a) it's impossible for everyone to be a (successful) businessman: somebody has to be an employee and do the actual work, y'know?

b) to be "actually rich" -- which is not just "being on the level of personally comfortable standard of living", it's more of "having certain level of personal influence" -- you have to own a share in a commercial enterprise and get the dividends from it; rare exceptions like a prominent lawyer or a genius surgeon notwithstanding.

These two are mostly empirical observations, and you can frame it very differently depending on your liking; the "exploitation of the worker class" is only one such frame, there are many other.

Re: Just Be Rich

#552

Post by mattlondon »

McScroogy wrote: post #535
donnythecroc wrote: post #64

Earlier quoted context omitted.

The problem is all down to the basic human need of a home. In the 70s and 80s even 90s someone on a teacher's salary could own their own home in a major world city - say London. Now, literally zero chance. Because homes have become an asset class and the rich can outbid regular people so they are pushed out. That's the problem. I couldn't care less how many billionaires there are if regular people can afford a decent…

The rich outbidding poor people is not what is causing a housing shortage. There are only so many houses a rich person can occupy. Even if you assume that every rich person keeps a number of spare houses, there are not enough rich people to cause a housing shortage.

It is not just "rich" people.

In the UK there was a trend for Baby Boomers to buy up one or two (or more) properties and rent them out as a "nice little side income" etc in addition to their pensions at a time when savings interest rates were low, so there was no point saving (since returns were awful) and property loans were cheap. You even got a tax break on the loan interest!

These people are not mega-rich - just middle-class anybodies. I don't blame them - why leave large sums of money from your pension in the bank where you'll earn 0.05-0.5% interest a year, when you can spend it to buy a property that you can rent out for 5% yeild and benefit from property value increases if/when you need to sell.

The laws have changed a bit now to make it less attractive (no more tax breaks on loan interest, and more tax on "additional" properties you buy beyond your own personal home), and there is anecdotal evidence that "amateur" landlords are exiting the market in droves. Even so it has stoked the market considerably over a good decade or more, and so prices for even very modest "starter" properties (think 1 bed flats, small houses etc) are relatively unobtainable for the average person on the street or first-time buyer.

Re: Just Be Rich

#553

Post by sturgill »

talliedthoughts wrote: post #311
sbacic wrote: post #183

Earlier quoted context omitted.

> Because at least old money understands the concept of noblesse oblige. Source please. > it's that this mentality of earned wealth completely rids the owner of any sort of responsibility. Allow me to offer a different view. If you're one of the lucky few who went from nothing to millions (or even billions) you'd be pissed if society came and started talking about responsibility and equality _now_. Where was society…

Reading the other comments here, I think the argument is that when most people say they came from nothing, they are ignoring roads, electrical grids, sewer systems, fire departments, police to enfore property rights etc. "Society" provided those - before the person was rich. Of course, there are some people who got rich without any of those things, but probably a lot fewer.

If one’s taxes only went to pay for this small subset of items, I think your argument would be stronger. A 40% marginal tax rate is not earmarked for these essential services, as evidenced by our decaying infrastructure despite the US government bringing in $3.5 trillion in tax receipts in 2019.

The political left has been pretty clear that the aim isn’t solely a focus on essential (and shared) resources, but on increasing the social safety net (either through UBI, single payer, or other mechanisms).

Separate conversation if those are good policies or not, but the argument isn’t that the rich don’t want to pay for police. That’s an incredible straw man.

Re: Just Be Rich

#554

Post by wayanon »

donnythecroc wrote: post #64
Barrin92 wrote: post #49

I'm just gonna quote what I think is a very important part from the Graham piece itself >" People who don't look any deeper than the Gini coefficient look back on the world of 1982 as the good old days, because those who got rich then didn't get as rich. But if you dig into how they got rich, the old days don't look so good. In 1982, 84% of the richest 100 people got rich by inheritance, extracting natural resources,…

The problem is all down to the basic human need of a home. In the 70s and 80s even 90s someone on a teacher's salary could own their own home in a major world city - say London. Now, literally zero chance. Because homes have become an asset class and the rich can outbid regular people so they are pushed out. That's the problem. I couldn't care less how many billionaires there are if regular people can afford a decent…

True - I'm in my late 40s in London and accepted some time ago I will never own a home. If UK renters had the same protections as they do in eg Germany it wouldn't be such a precarious existence.

Re: Just Be Rich

#555

Post by jkingsbery »

> It's less a tutorial or analysis and more a thinly veiled attempt to ease concerns about wealth inequality.

Given in Graham's essay he comes out and discusses the Gini coefficient, it doesn't seem like a "thinly veiled" anything. The point of the essay is to discuss how much inequality itself matters (as opposed to, say poverty, lack of access to health care, or other things other people are raising as legitimate concerns).

> What he fails to mention is that concerns about wealth inequality aren't concerned with how wealth was generated but rather the growing wealth gap that has accelerated in recent decades.

My take away from Graham's article is that, all else being equal, we should care about how wealth was generated, and the gap itself is less important.

> Tech has made startups both cheaper and easier but only for a small percentage of people.

This is probably true, but again I think it misses the point that Graham is making: Creating a new company is overall simpler today than it was in the 1970's and 1980's, and so the "small percentage of people" who can start companies now is larger than it was 40 years ago.

> Paul paints a rosy picture but doesn't mention that incomes for lower and middle-class families have fallen since the 80s.

For a more thorough and balanced analysis of what this author refers to, see Russ Roberts's series on these questions: https://www.youtube.com/playlist?list=PLRZf05zFBLXIKLD3blbnn... . There are several factors that make these long-term trend analyses hard: changing family compositions, changing quality of goods, and challenges with price indexes.

Re: Just Be Rich

#556

Post by neutronicus »

McScroogy wrote: post #535
donnythecroc wrote: post #64

Earlier quoted context omitted.

The problem is all down to the basic human need of a home. In the 70s and 80s even 90s someone on a teacher's salary could own their own home in a major world city - say London. Now, literally zero chance. Because homes have become an asset class and the rich can outbid regular people so they are pushed out. That's the problem. I couldn't care less how many billionaires there are if regular people can afford a decent…

The rich outbidding poor people is not what is causing a housing shortage. There are only so many houses a rich person can occupy. Even if you assume that every rich person keeps a number of spare houses, there are not enough rich people to cause a housing shortage.

Rich people can charge rent on any number of houses, outbidding people in the edge of being able to afford owning a home

Re: Just Be Rich

#557

Post by wayanon »

johndevor wrote: post #540
McScroogy wrote: post #535

Earlier quoted context omitted.

The rich outbidding poor people is not what is causing a housing shortage. There are only so many houses a rich person can occupy. Even if you assume that every rich person keeps a number of spare houses, there are not enough rich people to cause a housing shortage.

Exactly. Why is there no car shortage? Because politicians can't limit car production.

But politicians can (and should in my opinion) make car ownership less attractive.

Re: Just Be Rich

#558

Post by sheepybloke »

McScroogy wrote: post #535
donnythecroc wrote: post #64

Earlier quoted context omitted.

The problem is all down to the basic human need of a home. In the 70s and 80s even 90s someone on a teacher's salary could own their own home in a major world city - say London. Now, literally zero chance. Because homes have become an asset class and the rich can outbid regular people so they are pushed out. That's the problem. I couldn't care less how many billionaires there are if regular people can afford a decent…

The rich outbidding poor people is not what is causing a housing shortage. There are only so many houses a rich person can occupy. Even if you assume that every rich person keeps a number of spare houses, there are not enough rich people to cause a housing shortage.

While this is fair, you forget that real-estate is an investment opportunity. Between flipping houses becoming cool and rental properties being a good investment, if you have an extra couple hundred thousand you can make a strong investment right now. So yes, if this is an investment strategy and you have enough capital, they can just buy up all the houses.

Re: Just Be Rich

#559

Post by bouncycastle »

sbacic wrote: post #159
donnythecroc wrote: post #64

Earlier quoted context omitted.

The problem is all down to the basic human need of a home. In the 70s and 80s even 90s someone on a teacher's salary could own their own home in a major world city - say London. Now, literally zero chance. Because homes have become an asset class and the rich can outbid regular people so they are pushed out. That's the problem. I couldn't care less how many billionaires there are if regular people can afford a decent…

> In the 70s and 80s even 90s someone on a teacher's salary could own their own home in a major world city - say London. You can still have that. All you need is a real estate tax. But nobody wants that. People don't want cheaper homes, they want to become part of the home-owner elite and get their own appreciating asset.

No, tax won't help. The reason is because the population grew and the amount of land available stayed the same. (Google London population growth charts).

Re: Just Be Rich

#560

Post by zeckalpha »

twic wrote: post #439
nindalf wrote: post #151

OP mentions PG’s article arguing against a wealth tax. That article is short, simple and to the point - Modelling a Wealth Tax ( http://www.paulgraham.com/wtax.html ). It is so compelling, but also misleading and wrong. Its not easy to spot the sleights of hand he uses. I wrote more about it here - Modelling a Wealth Tax Correctly ( https://blog.nindalf.com/posts/wealth-tax/ ). And yet, I think the simplicity of PG’s…

What if the founder borrows against their stock to pay the wealth tax? Or uses a sale-and-repurchase agreement? That way, they can use the present value of the stock to pay their taxes, while hanging on to the upside. You need to account for interest in this situation, but that should be less than the growth of the company. PG's story doesn't even hold water in dollar terms.

Or stocks would be expected to issue dividends proportional to the wealth tax.
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