Too Hot for TED: Income Inequality • Hacker News Board

Re: Too Hot for TED: Income Inequality

#91

Post by leot » Wed, May 16, 2012, 10:14 PM UTC

timwiseman wrote: post #57

aeturnum wrote: post #29

Earlier quoted context omitted.

Though I support the idea that wealthy people should pay high taxes, perhaps even higher taxes than they do now, I think it's also worth noting that the US already gets 70% of all its taxes from the top 10%[1]. As long as we're keeping capitalism, I don't buy the argument that simply being rich is wrong. I'm also fairly skeptical of set limits on income, as setting those limits is very hard. What goes into it? How mu…

Well said. To go a bit further, limits on income are likely to encourage people not to try truly hard or truly risky ventures. Paul Graham addresses this at http://paulgraham.com/gap.html

There's an important difference between wealth and income that PG does not go into.

Sure, I'll buy the idea that taxing income discourages work (though its impact is far more muted than some people would like to suggest).

However, I've not yet seen any argument that taxing wealth itself discourages work or wealth creation. If anything, taxing wealth keeps people from sitting on their assets and doing mere "wealth preservation".

If I were a Ramen-profitable startup entrepreneur, I'd much rather be taxed at 2% of my net wealth than at 30% (or even 15%) of my capital gains. Indeed, if I were anyone who planned on leveraging my capital to actively create wealth (c.f. Elon Musk) I should much prefer wealth taxes over capital gains taxes.

If we live in a meritocracy then anyone with a lot of wealth should be able to relatively easily average >6% ROI year-over-year.

Re: Too Hot for TED: Income Inequality

#92

Post by webXL » Wed, May 16, 2012, 10:15 PM UTC

muhfuhkuh wrote: post #48

webXL wrote: post #9

Another rich guy trying to persuade average folk that all our problems would be solved if people like him were taxed more. Never mind that the Buffet-rule (minimum 35%) would net $31 Billion over the next 11 years versus $7 Trillion in estimated deficits. ( http://www.politico.com/news/stories/0312/74232.html ) Another reason this idea is so wrong-headed is that there can never be enough superrich Americans to power…

"(See the Department of Education, TARP, Medicare, war, etc.)" TARP money has been paid back almost in full, depending on who you talk to. The DoE budget is like an eyedropper full in the wake of an ocean, compared to the DoD and elderly entitlements. And, if you want $FAVORITE_CANDIDATE to touch Medicare and Social Security, you go right ahead. I'm quite positive they will smile and move on, knowing where their cons…

It's easy to pay TARP back in full when you can borrow at the Fed at 0% and lend at 5%. Favor. Education performance has stagnated ever since the DoEducation was created. Who benefited? Not me or my kids!

And the fact that we have third-rail (untouchable) programs in this country is NOT a strong argument in favor of more "investments".

Re: Too Hot for TED: Income Inequality

#93

Post by lifeisstillgood » Wed, May 16, 2012, 10:16 PM UTC

muhfuhkuh wrote: post #31

So, when does one prove causation? Because by any economic metric, the times when we've been fiscally strong is when the top marginal tax rate was higher than 36% currently. When they lowered it in 2001 from 40% while going to war , it created net zero jobs during the entirety of the Bush administration (and starting leaking jobs en masse during the crisis in 2008). One could argue that Reagan's administration saw so…

Aren't there two issues here

* how much (usually as a % GDP) should / does a govt take?

* how does that tax burden get shared out

the first is an issue of services provided by govt, but thesecond is an issue of fairness.

If you want more services you need to pay. As a % of GDP the USA takes about 26-28 % whereas pretty much every other Western country is between 35 and 45%.

My take on that is welfare costs. Full health and pension support for all the USA is going to be expensive, and will probably bring the US in line with Europe

the issue now is fairness - but even taut is really about ability. The easy targets are the middle classes - they have money but rarely enough to take advantage of tax loopholes

but if all the money is now held by the richest 2% then the richest 2 % will pay. The alterntive is no government

we all live by the 1930s maxim - I rob banks because that's where the money is. If the richest people in society have the money, that's where the bank robbers / IRS will go.

Fair has little to do with it

Re: Too Hot for TED: Income Inequality

#94

Post by smsm42 » Wed, May 16, 2012, 10:16 PM UTC

poppysan wrote: post #26

webXL wrote: post #9

Another rich guy trying to persuade average folk that all our problems would be solved if people like him were taxed more. Never mind that the Buffet-rule (minimum 35%) would net $31 Billion over the next 11 years versus $7 Trillion in estimated deficits. ( http://www.politico.com/news/stories/0312/74232.html ) Another reason this idea is so wrong-headed is that there can never be enough superrich Americans to power…

I have to disagree. 31 billion may not wipe out the deficit, but it is a good start. The alternative minimum tax is another good start. I think there will be no single thing that eliminates our deficit, and have yet to hear negatives to the "rich" paying a bit more, especially if many of them are for it.

We already have AMT. Which was introduced with exactly this purpose. Read its history: https://en.wikipedia.org/wiki/Alternative_minimum_tax#Histor...

It grew in an unmanageable mess of complicated rules that nobody understands and that has very little relation to its original purpose. Since it worked so nice the first time, we absolutely have to do it again.

> and have yet to hear negatives to the "rich" paying a bit more, especially if many of them are for it.

By "many of them" you mean half-dozen wannabe politicians? You are confusing the opinion of tiny vocal minority with the opinion of silent majority which doesn't do talks on TV. The reasons not to do it are plenty - grabbing more money from productive people to feed insatiable appetites of runaway government spending projects is not a sustainable model. Since most of the politicians are afraid to talk about any serious spending cuts and measures to bring deficits under control, it will not end up in anything but the same deficits with more government spending. Government can spend arbitrary sums of money, so we'd just end up in the same place very soon.

Re: Too Hot for TED: Income Inequality

#95

Post by eli_gottlieb » Wed, May 16, 2012, 10:18 PM UTC

mtjl79 wrote: post #90

eli_gottlieb wrote: post #85

Earlier quoted context omitted.

At the end of the day, a country is a business. No, it's not. It needs to manage its finances responsibly, but that is quite different from being a profit-generating business.

Countries are the largest companies that exist on the planet.

Quite simply, no. The goal of a country is not to amass wealth in the government.

Re: Too Hot for TED: Income Inequality

#96

Post by waterlesscloud » Wed, May 16, 2012, 10:20 PM UTC

splinterofchaos wrote: post #81

waterlesscloud wrote: post #65

Earlier quoted context omitted.

"That only further demonstrates the income inequality in the United States. " So is this the basic issue, then? That there's income inequality? Because that's always going to be the case. Even in the most socialist nations, or even communist nations. There is always a strong disparity of income and power. Always. And there always will be.

That is not to say that the level of inequality is not greater than it was before or is elsewhere. The extent of inequality has grown in the states ( http://www.motherjones.com/politics/2011/02/income-inequalit... ) and compares unfavorably with other countries ( http://en.wikipedia.org/wiki/List_of_countries_by_income_equ... ).

With a first look at that chart, what it seems to truly reflect is the size of the middle class in each nation.

Wouldn't a better solution be to increase the size of the middle class rather than decrease the size of the upper class?

Also, among the western european nations and the US, I suspect a strong correlation between immigration rates and the data on the chart.

Re: Too Hot for TED: Income Inequality

#97

Post by muhfuhkuh » Wed, May 16, 2012, 10:21 PM UTC

nikcub wrote: post #67

viggity wrote: post #63

Earlier quoted context omitted.

Agreed, looking at top marginal rate seems weird, why not look at effective tax rates for the Top 1, 5 and 10% instead?

because it doesn't give you the answer you want

What answer would that be? Because looking here[1], the effective tax rate during our largest job growth (Clinton Administration) was also when we saw the largest effective tax rates for the 10, 5, and 1%.

I guess I have to correlate until we run out of data, then checkmate or something.

[1] http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...

Re: Too Hot for TED: Income Inequality

#98

Post by buerkle » Wed, May 16, 2012, 10:23 PM UTC

jakubmal wrote: post #20

I can't believe my eyes actually. As I was opening this comments page, I thought that majority will represent vastly different opinion here. But since that's not the case, I decided to speak up. Nick Hanauer cannot be more wrong. Taxing rich people means punishing someone for his success. There is no argument that could justify such Robin Hood's behaviour. In fact that's what was (or is) happening in the communism. S…

It's not about punishing the wealthy, it's about realizing the enormous benefits the wealthy receive from society.

Re: Too Hot for TED: Income Inequality

#99

Post by webXL » Wed, May 16, 2012, 10:23 PM UTC

eli_gottlieb wrote: post #72

webXL wrote: post #9

Another rich guy trying to persuade average folk that all our problems would be solved if people like him were taxed more. Never mind that the Buffet-rule (minimum 35%) would net $31 Billion over the next 11 years versus $7 Trillion in estimated deficits. ( http://www.politico.com/news/stories/0312/74232.html ) Another reason this idea is so wrong-headed is that there can never be enough superrich Americans to power…

But you can invest... Your money isn't stuffed under your mattress, is it?? Investment generates profits. It doesn't add to aggregate demand, but subtracts from it.

Why should the government "invest" then?

Re: Too Hot for TED: Income Inequality

#100

Post by davekinkead » Wed, May 16, 2012, 10:23 PM UTC

timwiseman wrote: post #57

aeturnum wrote: post #29

Earlier quoted context omitted.

Though I support the idea that wealthy people should pay high taxes, perhaps even higher taxes than they do now, I think it's also worth noting that the US already gets 70% of all its taxes from the top 10%[1]. As long as we're keeping capitalism, I don't buy the argument that simply being rich is wrong. I'm also fairly skeptical of set limits on income, as setting those limits is very hard. What goes into it? How mu…

Well said. To go a bit further, limits on income are likely to encourage people not to try truly hard or truly risky ventures. Paul Graham addresses this at http://paulgraham.com/gap.html

Yeah, because high tax rates always discourage entrepreneurship

Norway - with one of the highest tax rates & comprehensive welfare states on the planet - has higher rates of entrepreneurship than the USA does. http://blogs.reuters.com/felix-salmon/2011/01/20/norway-entr...

If you look at international entrepreneur rates, its pretty clear that there is no relationship between income tax rates and start-up activity (that's not to say that specific tax policies don't make a difference). http://www.internationalentrepreneurship.com/total-entrepren...

For every argument about high tax discouraging risky ventures, there is a counter-argument that high safety nets reduce the risk of start ups.