81–90 of 367 posts
Earlier quoted context omitted.
"Why doesn't everyone just get rich?"
Arguably, almost everybody in the Western world has gotten rich. Go visit a medieval castle sometime. The standards that now everybody has required an army of servants in the old days. It is just a hateful lie of the left to claim "being rich" is dependent on exploiting poor people.
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Taxing capital incentivizes putting it to work. If you only tax gains then people can endlessly horde wealth. Taxing the wealth itself makes hording unappealing... I think.
But hoarding wealth isn't a problem for inequality. It is that capital can be used to generate income. Inflation is the process that incentivizes capital to be put to work.
It absolutely can be, especially for wealth that is finite. (Like land for housing)
> Inflation is the process that incentivizes capital to be put to work.
Does it though? Inflation mostly just punishes labor alone, labor feels the effects of inflation far more severely than anyone else.
With enough capital (the amount anyone 'hoarding wealth' already has), the capital automatically buys itself out of any problem of inflation, because the returns to sit on that cash are routinely higher than inflation itself is.
Inflation can't currently incentivize capital to be put to work, because capital just sitting doing nothing already far out-earns any loss from inflation. And for inflation to be strong enough to actually incentivize capital to be used, you'd have to bump it to astronomical heights (like say, 15-25%), at which point you've completely obliterated all wage-earning people's lives.
This is why many well-respected people advocate for a wealth tax. In a perfect world, inflation would be exactly 0, and a strong punitive wealth tax would discourage greedy people from hoarding wealth.
Measuring income inequality in the US without looking at outsized wage gains abroad feels remarkably inaccurate. I'll copy-paste my reply to another thread from earlier this year: > But, wages haven't improved in the last 40 years for the average person ...in the US. Growing inequality in the US is driven by the fact that capital gains domestically have improved dramatically alongside wage gains abroad , while wage h…
This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new. The major points of their work, and especially of Piketty's monumental _Capital for the 21st century_ still stand: that capital is a positive feedback loop in a way that labor is not; that mid-20th-century laws that put brakes on this feedback loop have been removed; th…
> This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new These are not nitpicks. What you measure drastically changes the results. Piketty and Saez presented their own revision to their data in 2018 that shows starkly different results than the 2013 data everyone cites: http://gabriel-zucman.eu/files/PSZ2018QJE.pdf For examp…
In what way does it matter that Warren Buffet has X times my income and Y times my assets, if he drives the same kind of car and lives in about the same kind of house? It means he has more power than me in a capitalistic system, sure. But is that really so wrong or unfair? I think it’s actually kind of a good thing: most people would just consume like crazy and ruin the planet if they came into that kind of money...
Why when we talk about inequality we never talk about the tide of economic progress that capitalism produces. If the rich get richer but the middle class has a better quality of life than what the rich had 200 years ago, is strict inequality still the only thing that matters?
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If my wealth is in anything beyond cash -- say I own a huge hotel chain, or the largest retail company in the country -- how is inflation a tax on my wealth? My businesses will still be generating the same proportion of the economy as they were before.
If inflation causes the nominal value of your hotel chain to increase 2%, you have to pay capital gains tax on this nominal gain (at least in countries where capital gains tax is not adjusted for inflation), leaving you with less real value afterwards.
I would rather focus on reducing absolute poverty than reducing inequality (gini-coefficient).
Unfortunately, you can't have a real democracy with too high income inequality, and it is hard to reduce absolute poverty if the poor don't have a political voice.
In most western democracies (the US included), the only way to elect a politician is for a human being to go to the polls and check the box next to the candidate's name.
This opportunity is present regardless of whether one is a billionaire, a millionaire, a member of the upper-middle class, or a blue collar worker.
A real world example of this is Sweden, which has the highest per capita population of billionaires. The country doesn't seem to care because the minimum standard of living is high enough. It's not even paid for by taxing the billionaires, it's paid for by high taxes on the middle class and a VAT.
Earlier quoted context omitted.
Arguably, almost everybody in the Western world has gotten rich. Go visit a medieval castle sometime. The standards that now everybody has required an army of servants in the old days. It is just a hateful lie of the left to claim "being rich" is dependent on exploiting poor people.
Are you saying poor people aren't exploited?
Earlier quoted context omitted.
Before income tax, nobody had any idea about who was making what. Fast forward 100 years and we still have no idea about who holds how much capital. Even if you disagree on a universal wealth tax (just like we have for income) there is an argument to be made that it is important information to policymakers. Other than that Piketty argues that larger wealth means larger returns (per unit capital) and that is a very st…
> Other than that Piketty argues that larger wealth means larger returns (per unit capital) and that is a very strong argument against a flat capital gains tax. But someone who earns more will also have a higher marginal tax rate. There is probably better risk tolerance once you have a net worth above e few months of expenses. But someone with $10M will be able to get the same risk adjusted return as someone who has…
Not currently on capital
> But someone with $10M will be able to get the same risk adjusted return as someone who has a net worth of $100k.
That's exactly what Piketty has shown to be false. If you look at stuff like endowments and sovereign funds you'll see gains that are nowhere near what's possible even for funds that have $100M in capital.
There are economies of scale involved here, both in diversification and in management. Moreover some markets are not even available to investors who are not larger than a certain threshold.
Why when we talk about inequality we never talk about the tide of economic progress that capitalism produces. If the rich get richer but the middle class has a better quality of life than what the rich had 200 years ago, is strict inequality still the only thing that matters?
The real issue lies when you look at the system in a more holistic, long term view, lets say another 200 years. In that time-frame the self propelling cycle of capital will make the accumulation of all wealth lie in a very small group.
In itself it is not a bad thing as long as advancements are still being made and the average quality of life is improved, however it leaves the system with a very centralized point of control.
This point of control could quickly deviate the system for purposes not entirely in the best interest of the species, put it as "Power tends to corrupt, and absolute power corrupts absolutely." It may be a possibility but not the great peril. The real issue lies in the central group having accumulated all resources, and then not being able to maintain said resources and leaving the whole system open to a single point of failure by a revolt of some sorts. (starting from scratch can take more energy that the energy required to topple the system, and sometimes there may not enough energy to build over...)
Do we really want to have a society were the integrity of it depends on a single point? Maybe we do, but it just might not end up being the most resilient system.