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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?

#71

Post by WalterBright »

hackerman123469 wrote: post #12
bmitc wrote: post #3

To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…

But tell me, how are you going to tax the super rich? It's incredibly difficult to tax someone who's actually poor on paper. Most super rich people actually don't seem to have much wealth officially declared, all of their wealth is sort of like "pseudo" in that it's all tied up in assets, and sometimes assets that aren't directly owned by them but their companies etc. and they have a lot of shortcuts for tax breaks o…

The tax code does not require anyone to declare their assets. It's the income that gets declared.

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

#72

Post by selfmodruntime »

bmitc wrote: post #3

To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…

The funny thing is, you don't even need to tax the rich all that much. The money is there. It's just spent on ludicrous stuff. The US annual defense budget is 800 billion dollars a year. Even when you argue that national defense and a well equipped military are necessary (which I believe them to be), I've seen military cost receipts. They're outrageous. You don't need 50 dollar rolls of toilet paper.

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

#73

Post by dismantlethesun »

smilekzs wrote: post #21
bmitc wrote: post #3

To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…

One thing I've noticed consistently, is when politicians talk about "taxing the wealthy", they almost always follow that with "earning more than $xxxk a year". This is conflating wealth with income. Being within this tax bracket myself, I do not deny that I am biased, but I do hope this bullshit gets called out hard whenever someone brings up yet another underhanded measure to milk us (typical SFBay SWE) above and be…

If you are wealthy and refuse to earn an income, then your savings will eventually deplete and you’ll become bankrupt.

Additionally they wealth already taxed in a previous era, and is currently taxed in this era any time they spend it via sales tax.

If of course you are spending all your money on personal groceries as a billionaire, then I’m 100% fine with not taxing you.

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

#74

Post by abigail95 »

gjulianm wrote: post #24
bloodyplonker22 wrote: post #4

The example that is used in this blog post is completely and absolutely wrong. He portrays wealth accumulation as a zero-sum game with people coin-flipping against each other. In reality, someone does not have to lose for wealth to be created.

No, but it's a decent approximation. Even in the case of "creating wealth", the person with more money usually gets a bigger share of the money simply because they had more money. This being Hacker News, I think we all are too close to the tech startup model, which is certainly far more equitable than others; but a lot of companies do not share fairly the value created between workers and owners.

If this was true about wealth creation, intergenerational wealth would eventually outcompete everything else, while it looks like the opposite is true.

Unless the people with money are the ones that made it themselves, they will keep buying bad watches like everyone else.

The what they invest it in, is the whole point. If you spend your life and wealth playing 20% of your bankroll with zero expected value - you should completely expect not to be wealthy, and if you do become wealthy it will be completely by chance, against the odds.

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

#76

Post by bmitc »

bawolff wrote: post #47
smilekzs wrote: post #21

Earlier quoted context omitted.

One thing I've noticed consistently, is when politicians talk about "taxing the wealthy", they almost always follow that with "earning more than $xxxk a year". This is conflating wealth with income. Being within this tax bracket myself, I do not deny that I am biased, but I do hope this bullshit gets called out hard whenever someone brings up yet another underhanded measure to milk us (typical SFBay SWE) above and be…

As a practical matter, it is very difficult to tax wealth (and even harder to do it fairly.) I don't think the issue is lack of will but lack of plan that actually works in the face of assets with unclear value and/or difficult to liquidate. And this doesn't just affect the ultra rich but people like SWE too. How much is the stock you have in the non-public company you work at really worth? SWE are probably one of th…

The rich buy stuff, do they not? Tax those things to force realization and thus tax of unrealized wealth. Buying a second, third, fourth home? Here's your increasingly high tax and interest rate penalty. Instead of throwing up our hands with "they don't have cash", force them to realize investments into cash and deincentivize being able to keep everything hidden being investments and purchasing things with unrealized wealth.

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

#77

Post by WalterBright »

shafyy wrote: post #15
hackerman123469 wrote: post #12

Earlier quoted context omitted.

But tell me, how are you going to tax the super rich? It's incredibly difficult to tax someone who's actually poor on paper. Most super rich people actually don't seem to have much wealth officially declared, all of their wealth is sort of like "pseudo" in that it's all tied up in assets, and sometimes assets that aren't directly owned by them but their companies etc. and they have a lot of shortcuts for tax breaks o…

> It's incredibly difficult to tax someone who's actually poor on paper You think this because the super rich want you to think this. Actually, it's not hard and there are some good ideas floating around (e.g. more inheritance tax, don't let them get loans without taxes againt their illiquid wealth). Does it require a change of laws? Yes, but that's the whole point of democracy.

The top federal inheritance tax rate is 40%. The top Washington state inheritance tax rate is 20%. I.e. the government takes half.

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

#78

Post by m0llusk »

bamboozled wrote: post #23
bmitc wrote: post #3

To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…

"To solve all this, it's pretty simple," I feel if it was simple it would be fixed?

The problem is that at the other end there is also dysfunction. With high taxes and regulations keeping companies and profits in line the result is also a combination of structural inflation and stagnation resulting from the high cost of almost any kind of investment or operations. This is what triggered the fundamental changes which occurred from the late 70s through the 80s with Thatcher and Reagan.

It might be helpful if we could construct metrics for social function that more clearly showed when we approach extremes that interfere with business or social functions.

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

#79

Post by bmitc »

dismantlethesun wrote: post #73
smilekzs wrote: post #21

Earlier quoted context omitted.

One thing I've noticed consistently, is when politicians talk about "taxing the wealthy", they almost always follow that with "earning more than $xxxk a year". This is conflating wealth with income. Being within this tax bracket myself, I do not deny that I am biased, but I do hope this bullshit gets called out hard whenever someone brings up yet another underhanded measure to milk us (typical SFBay SWE) above and be…

If you are wealthy and refuse to earn an income, then your savings will eventually deplete and you’ll become bankrupt. Additionally they wealth already taxed in a previous era, and is currently taxed in this era any time they spend it via sales tax. If of course you are spending all your money on personal groceries as a billionaire, then I’m 100% fine with not taxing you.

I don't think any individual should be a billionaire. There's no conceivable reason for a single person to need or have the right to be a billionaire.

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

#80

Post by wizofaus »

dhruval wrote: post #11

This smells misleading / overly simplistic but I can’t quite quite put my finger on precisely why? Some thoughts - consensual trades are win win (you want a sandwich, I want $5 let’s trade! And we both win) - something about the model is overly simplistic, like it produces a statistical distribution that looks like extreme inequality from randomness, but lots of different sorts of distributions can emerge from aggreg…

The most obvious omission from that model is that in a real economy people voluntarily give money to others in exchange for goods and services. If everyone was equally good at producing useful goods and services then even if the yard-sale effect was occurring due to investment/wagering behaviour it's unlikely to lead to the extreme inequality the "pure" version does. It's also fairly obvious that in the real economy there's virtually nobody in the super-rich list that's got there purely by being lucky with investments. To what degree that's true only because we do have redistributive taxation systems I don't know.
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