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Are super-rich people just better at making money?

pudding.cool

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

#81
post #25

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 isn't difficult at all. This is an oft repeated excuse. The rich use their wealth as collateral to purchase things, like homes, companies, investments, etc. and transfer wealth to inheritors with basically no tax. So stop worrying about trying to figure out how to tax unrealized wealth and start taxing the things that unrealized wealth helps secure and purchases. This is one way to force realization of that wealth…

> transfer wealth to inheritors with basically no tax.

Other than 40% federal estate tax and 20% Washington state tax, which is right next to zero.

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

#83
post #22

Better at finding opportunities to make money. Better at eliminating competition see Bill Gates and Microsoft and the DOJ. Some are just born rich and learned how to invest.

Rich people are in the right sectors empowered by globalisation and tech, those are health care, food and education industries. https://www.youtube.com/watch?v=vsmwnUPQ3Q8 Bill Gates is working on his version of circular economy, his charities feed into his investments: "The global pharmaceuticals market size is projected to grow from $1585.05 billion in 2022 to $2401.22 billion by 2029, at a CAGR of 6.1% in forecast…

> circular economy

haha that's my first thought when I hear about "charities" by the billionaires in the Anglosphere world... sounds like some tax dodging loophole with huge marketing budget and a website. Why don't they just pay their taxes?

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

#85
post #79

Earlier quoted context omitted.

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.

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

#86
There are so many wealth making opportunities that give more than literally zero expected value, and don't require 20% of your wealth.

You can become rich by following the rules of expected value and compound interest.

Backtest this against the population and tell me that people today wouldn't be richer if they made sound financial decisions based on the information at the time. I know I would be richer. The kicker is, wealth inequality would rise along with median wealth, because compound interest. This is so unpalatable for some people that they argue against sound decision making and reduce wealth creation to coin flips.

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

#87
post #59

Well… except that many super rich had failed businesses, went bankrupt etc? I used to kinda think along the lines of this post. However, when examining the performance of top investors for example (eg Buffet, Templeton, Marks etc) it is clear it isn’t mainly luck.

People can and do learn from running failed businesses.

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

#88
post #35
post #14

Earlier quoted context omitted.

The US is only very loosely constrained by its tax base. It does not lack funds. It has also been spending much more on education over the past decades[1]. With very little to show for it. [1] https://nces.ed.gov/programs/digest/d19/tables/dt19_236.55.a...

You’d expect education costs to be rising, though, as people are expected to have a higher level of education before entering the workforce than they were previously, and because career changes and reskilling are far more common than previously. It’s a bit like healthcare. You can be spending far more than you were when there was a younger population and fewer sophisticated and expensive treatments, and yet still not…

There is no evidence that people have a higher overall level of education before entering the workforce over time.

Rather, people know a different set of skills and accumulate a different body of knowledge. It is only if we define "education" as the degree of knowledge in the body of subjects we teach today that one can say people in the past had less of it. But that's only because we have discarded the many bodies of knowledge an educated person needed to have in the past.

For example, one can laugh and say that to earn a doctorate in mathematics during the renaissance you'd need to know algebra only to the level of solving a cubic equation. However you are missing all the archaic geometric ruler and compass constructions, evaluation of various infinite series, and deep knowledge of Latin, Greek, French, German texts, mastery of rhetoric, music theory, and other topics that few learn today. So it is not true that a mathematician of the present could waltz in and get a Doctorate in Philosophy in medieval Paris. He would probably get quickly thrown out for failing to master the many various scholastic topics that were required of a PhD in that time period, and which no one learns today.

As another example, a new worker in 1800 might be expected to know how to deliver a calf, fix a fence, shod a horse, make homemade preserves, skin a rabbit, set a broken bone, paint a barn, as well as know Greek, geography, history, recite the speeches of Cicero, translate the Odes of Horace, navigate the seas by an astrolabe, stain a bookcase, identify the key flood valleys of Europe and know which animals could be hunted in which part of the year in various European forests, or know the biographies of German princes, etc. But you are correct, they wouldn't have MS Office skills or know how to create a webapp.

Once you move past "hunter-gatherer", you very quickly run into complex societies with their own historically developed bodies of knowledge that require lifetime learning, whether that means learning the seasons and details about planting crops and irrigating fields, dealing with pests, where to dig a well, how to tan leather, etc - or whether that means something else, it is still a vast body of knowledge that takes decades to master. The point is, wherever a society is technologically, it will choose different areas to train its workers, and omit other areas that are no longer needed. But how many resources does a society need to train its workers? If that number keeps growing, then there is something wrong with the society.

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

#89
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 top 1% pay 40% of the federal tax revenue. The top 5% pay 60%. California has the highest income tax at 13.3%, the highest federal tax rate is 37%. That makes the top income tax rate 50%.

Top 1% of salary earners. The CEOs, highly paid doctors, engineers. The real capitalists - those who hold the assets and pay for their yachts with stock-backed loans - they don't pay 40% of the federal tax revenue. Their salary is $1/year.

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

#90
post #32

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…

Is this a new form of NIMBY taxation? “Tax the rich but not rich people like me!”?

I think it's more that the upper middle class gets hammered while those above do not, so it feels like punishment and adversarial. The way things are right now, everyone has to play the "get as much capital as possible" game because it's the only way to support your family and progeny, but as soon as you hit a relatively low threshold, you start receiving a huge amount of tax pressure. If we redistribute wealth, we redistribute infrastructure, homes, education, medical care, etc. this pressure could be relieved by not forcing personal capital to be deployed and responsible for such support structures.
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