The Benefits of Economic Expansions Are Increasingly Going to the Richest
nytimes.com
nytimes.com
You're picturing wealth as 0's in a checking account but "more wealth" is control of capital, probably shares in an increasingly valuable company. I don't think we've discovered the limits of capital utility; the power and influence some companies wield is only increasing.
I disagree with the premise, but for the sake of argument, even if taken as assumption the point still stands. "Taxing the rich" is a proposition that will help the people that collect the tax far more than the general population.
A simple example of this can be Seattle and San Francisco Governments, that have had explosive tax income booms, most of their staff collection 6 figure salaries, and yet both cities enjoy very large homeless populations.
Increasing tax income does not mean inequality will decrease. It might even make it worse.
Your argument is completely incoherent. Are you suggesting that raising taxes on the rich through closing loopholes, raising capital gains tax, removing 529 and housing subsidies, and yes, increasing income tax, would actually end up with Gini inequality getting even more skewed?
Absurd.
I didn't turn anything: they are the same thing more often than not.
> Your argument is completely incoherent. Are you suggesting that raising taxes on the rich through closing loopholes, raising capital gains tax, removing 529 and housing subsidies, and yes, increasing income tax, would actually end up with Gini inequality getting even more skewed?
And thus my examples of Seattle and San Francisco: cities that have had exponential tax income at the same time as a net increase in homelessness. + TAX + (extreme?)Poverty simultaneously. It is disproven constantly that what the state gathers, it does not distribute appropriately.
The city of san francisco spends 20k+ a year per homeless person, but if you look at the way they live, you can be pretty certain they don't get that.
Raising taxes is not the solution to poverty. Specially when everybody pays them.
https://www.seattle.gov/financedepartment/documents/Economic...
https://www.seattletimes.com/seattle-news/politics/podcast-h...
Thats seattle. I have limited anecdotal data of seattle, but the homelessness is pretty pervasive, almost San Francisco Level.
On SF:
http://www.sfchronicle.com/bayarea/article/S-F-spends-record...
Googling has reports on SF tax revenue, but dont have a quick link for it. It will definitely show growth in the past decade, since there are more people, more consumption, housing boom (and hence prop taxes) etc. If you insist I can google more, but I dont have a skill you dont on that front.
Two of the fastest growing cities ever, tax revenue surge, increased government expenditure, higher homelessness.
Cant help but think that Henry George was right.
Provide me with data that shows that both 1) and 2) are not the case.
Your second link is just a big "data dump" and doesn't point me to the relevant facts, so I'll just share what I saw out of it: tax revenue is growing, even though tax rates aren't being increased. So, amongst other factors, this is likely due to population growth. This actually makes the opposite point of what you want to make.
Your third link does nothing to connect the homeless problem to the increases in tax rate. Show me that homelenessness spikes each time tax rates are increased. It's really a pretty simple graph I am asking for.
You provided no evidence for other points I raised, and the evidence you did provide were for mostly for questions I did not ask. In my first post, I clarified that I want data that shows cause and effect you claim:
increases in tax rates (not revenue!) => increases in city spending => increases in homelessness
Grade: fail. Off to the gulag with you.
2013: 4.32Billion
2014: 4.72Billion
2015: 5.14Billion
2016: 5:41Billion
2017: 5.71Billion
Tax revenue is increasing enormously.
> Your second link is just a big "data dump" and doesn't point me to the relevant facts, so I'll just share what I saw out of it: tax revenue is growing, even though tax rates aren't being increased. So, amongst other factors, this is likely due to population growth. This actually makes the opposite point of what you want to make.
My point is that increasing taxes is not the way to solve poverty. Increasing tax rates is a proxy to leevying taxes, its not meaning per se. Its not that if you tax 40% you have poverty and if you tax 41% you have equality. What matters is how much money is taking and how much is given from top top bottom.
But lets say we want to talk only in percentages. Its not about the legal increase of rates, its about the effective rate. Seattle gathers most of its income with property taxes, which, even with the tax rules unknown to me, have to have been increasing with the increase of prices of land and properties, I'm confident. To the very least, it shows in the revenue.
> ou provided no evidence for other points I raised, and the evidence you did provide were for mostly for questions I did not ask. In my first post, I clarified that I want data that shows cause and effect you claim:
increases in tax rates (not revenue!) => increases in city spending => increases in homelessness
I did not say that increasing tax rates increases homelessness. I said increasing taxes does not necessarily decrease homelessness. SF and Seattle are examples of increased revenue (and effective rates, considering income and prop taxes respectively) and increasing homelessness.
So to the one that says that a steeper progressive taxation will reduce poverty, I shall answer nay.
USSR + communist china + North Korea + Communist countries in Europe + Cuba + communist countries in Africa. They kind of blow that ideal-neutral theory out of the water
Zero marginal utility in buying stuff. Tons of utility in giving you influence over laws and power over society.
Beyond a certain point it's not about wealth as buying utility at all, those people play the game for power, control, and to play the game.
That's why I find it ludicrous hearing about this or that "hard working" billionaire. It's not "hard work" when you don't have to do it. It's just doing what you like all day in -- like a 20-yo could play videogames all day in, those people play business and power games. Work is really work (with all the extra weariness and anxiety that comes from it) if you either do what you don't want to do (e.g. are a cog in some company or flipping burgers) or you do what you like but not just because you like it but also to get by (e.g. lots of small business owners, creators, etc fall into this category). Rant off.
>I don't envy the rich nor am a communist so let them be as rich as they want as long as we don't compete for the same resources.
The hurt is not them merely being rich, it's about them stifling wages, damaging the economy, buying policies, hurting the future, fostering abusing monopolies, and all that to increase their fortunes and win more...
just recently a chunk of California coast was preserved in such a way by the founders of map company Esri.
we also set aside vast acreage as monuments. this land is also permanently "off the market"
If your hobby project is e.g. putting humans to Mars, you need a lot, and every tiny million USD counts. Same applies to biotech (defeat deadly diseases, slow down or reverse aging, etc), terraforming (stop deserts from expanding and recultivate them, etc), lowering humanity's greenhouse gases emission, improving or reworking education across the world, etc.
These things are normally not what a for-profit company makes its explicit target. It's what some of the super-rich spend their own money on, seeing utility in that.
Now apply this mindset blindly to a person with $10mn, $100mn, $1bn and so on..
Technically, they have "enough" to live comfortably for LIFE (and a few generations after them). But capitalism says GROW, so they will put their money somewhere that returns more than bank interest rates or government bonds etc. Because growth is imperative.
So, despite the extra wealth having zero marginal utility, the rich try to become wealthier because they are of the MINDSET that growth is the highest goal and nothing trumps growth.
So sorry but they want to keep using land to farm you.
Very good point. Rich have cornered housing markets in all #1 cities effectively farming workers & capturing value they create.
Road to serfdom?
https://www.goodreads.com/book/show/18736925-capital-in-the-...
If nature hasn't figured out how to do it any different, given the time she has had, neither are we.
If you are not powerful, make yourself useful to the powerful. And that doesn't mean working for a douchebag.
Not following the logic here at all. What does an economy have to do with an ecosystem? What is "nature"? Are there Apex predator bacteria? How does an Apex preditor map to an economic actor?
This is as lazy naturalist fallacy as it gets.
This has happened many-a-time in history. The Hapsburgs are a powerful family even today. The Japanese royal family is the same family it was 2500 years ago.
It's rather ironic that the keynesian perspective in the article is that the policies "aren't targeted" but in reality they couldn't be anything but.
But no, for some ridiculous reason those ideas seem to be unacceptable with the Overton Window defined by mass-media (conglomerate-owned, of course) and economists who propose small-state solutions.
1. Redistribution of wealth carries a corresponding redistribution of political power.
2. The quality of life for the bottom quartile (or choose your threshold) is increased by more than the corresponding decrease for the rich.
3. Redistribution increases consumer spending, which stimulates growth, if for instance the economy is in a state of poor demand.
Needless to say, these are all speculative on my part.
https://www.theguardian.com/inequality/2017/nov/14/worlds-ri...
Based on federal gov't data on total taxes paid, the top 0.01% (even higher income than you 0.1%) pay over 20% of all taxes with an average rate of over 49%.[1]
Remember gas taxes are just as much a tax as income or property tax.
Both relative and absolute poverty matter and have different causes and solutions.
A dollar taxes to the top 1% that owns more than 50% of all assets, in contrast, loses far less from taxation.
It stands on the idea that the tax is more effective to leevy and that it will produce less suffering (to the rich that pay it). But unfortunately, reality shows you the actual utilitarian application: the rich spend lots of resources to avoid, lobby and protect themselves from taxation, making it hard to grab and cause lot of apparent pain. But a sales tax on food, and a tax on income hits the poor, which can't defend themselves as well, and don't perceive the pain attributable to the tax.
If your stance is that taxes should be utilitarian, you already have an application.
Thats where money goes today, so if you raise taxes you have to take into account that the military will still eat a chunk of it. Its yet another argument of why raising taxes is not the solution to poverty.
Free universities, free healthcare, long paternity leaves, environmental protection and subsidies to underdeveloped areas are all factors that are proven to have helped substantially to reduce inequality and increase social mobility.
I seriously can't stop marveling at how people can defend an increasingly unequal world when there is a shrinking middle class and a more fragile position for the most vulnerable.
The funny thing is that the world itself is not increasingly unequal, the global gini coefficient is coming down, mostly due to arbitrage - migration away from countries with corruption and poor, confiscatory monetary policy to ones where the confiscation is slow enough to be generational.
Statoil is a massive mixed enterprise and it's doing just fine, and unlike the rest of the countries where wealth from oil gets funneled overseas or goes to a few corporations, it goes into the largest sovereign fund in the planet to safeguard people's wealth.
The Nordic nations have the proportionally massive states and nobody's saying that they would be better off with fewer public services... because they wouldn't, and it's obvious to anyone who wants to make the debate global.
If you genuinely believe that:
1) Please use a deflationary currency (like bitcoin) for all your transactions.
2) Study the impact of deflation on Japan. Or the deflations in the US that almost always coincided with a depression with one (arguable) exception. Keep in mind, that arguable exception was one of half a dozen such events.
I suggest studying the free banking era and the us during the 1800s. How did the country ever survive without inflation??? They even managed to royally screw things up with a civil war and a completely insane bimetallic standard, without implosion.
I suggest you study the effect of inflation on Japan. How's that lost decade going? Well, at least we got a lot of pansocial angst among the < 30 crowd (and some interesting anime) out of it.
How about immigration policy, both statutory and real-world. I do know that the Nordics are largely mono-cultures where something like 98% of the people are the same color and religion. If the Nordics are such great places to be, and if they have statutorily open borders (they are in the EU, right?), why are they not flooded with poor people from other nations? Are they socially hostile to immigrants?
You have no idea what you are talking about. Finland uses the euro. Denmark is pegged to the euro, a peg which cannot be broken like Switzerland's because it is 100% politically controlled. Norway is not in the EU so why would it use the euro? Iceland is also not in the EU.
Besides being completely wrong, why does the nordics being on the euro even matter for this discussion?
Eventually you run out of other people's money. Remember that Greece looked pretty good ten years ago.
Same with US. By now it should have turned to 1997 with Curt Russell being president &c, but it did not really happen.
BTW same with any stock that someone on the internet has bought or shorted. Sure it's going down... about to collapse!!! Going up... buy now!!
Thanks. I love getting some hot macroeconomic advice from a random person on an internet forum. Especially if it does not provide any sort of backing analysis, that is just the best way to do it.
But the tax burden overall, of course, is higher in Germany. That extra money comes from the middle class. Here are the tax brackets for a single person (in Euros):
0% up to 7,664
15% 7,665- 52,153
42% 52,154 - 250,000
45% 250,001 and over
If Trump proposed implementing a tax plan that distributed the burden of taxation the way Germany's does, people would be apoplectic.
It reminds me of an interview with a candidate in the Canadian election back in the 1990's. This was the NDP party (left wing).
The candidate said his platform was to raise taxes for the rich. The intrepid reporter asked "what is rich?". The candidate in a moment of honesty said "A family of four making more than $60K per year".
People went apeshit with that comment.
2) National Healthcare Standards that end the balkanization of the healthcare market.
3) Infrastructure maintenance deficits (we've fallen really far behind on that).
4) Basic Research in basically every field.
5) NASA.
6) Breaking oligopolies/monopolies
7) Public Affordable Housing. (i.e. High Density housing projects that otherwise charge market rates to cover costs.)
I'm not even sure why the idea of doing the first 6 things are even "political issues" that require discussion, to be frank. There is something seriously wrong when basic maintenance and balancing the scales of power to something below "lol rent seeking" qualifies as "increased public spending" because basically nothing is done in those areas.
So more money goes to doctors, who are in the top 10%?
> 3) Infrastructure maintenance deficits (we've fallen really far behind on that).
So more money to MTA workers and administrators making $100/hour: https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-....
> 4) Basic Research in basically every field.
> 5) NASA.
So more money to privileged, highly-educated folks who are in the top 10%?
These proposals just benefit the top 10% instead of the top 0.1%. (It exemplifies American politics, which has largely become a war between the top 10% and the top 0.1%, with nobody looking out for the interests of the bottom half). It won't reduce the inequality that the article is talking about, which is caused by the fact that the bottom 90% have little bargaining power in a world dominated by automation and computers.
It would be far better to just give poor people money. Or better, yet, put the money in trust funds for them.
https://www.forbes.com/sites/merrillmatthews/2015/01/05/doct...
> Medicare, which provides health coverage for seniors, pays doctors, on average, about 80 percent of what private health insurance pays. However, Medicaid, which provides health coverage for the poor, pays a much lower rate, about 56 percent.
Imagine that sort of downward pressure on prices and how that would enable the poor to help educate their children, etc. It isn't always about cutting down the wealthy. Sometimes it is just about improving the quality of life so the bottom suffers less.
You are seriously arguing Doctors are eager for a 20-44% paycut per hour worked.
Please donate 44% of your income to charity for the rest of your life if you believe this is the case. Beyond whatever contributions you make now. I will believe you if you do it.
> So more money to MTA workers making $100/hour: https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-....
http://work.chron.com/much-highway-construction-workers-make...
> About 197,920 construction workers were involved in highway construction, as of May 2011, according to the Bureau of Labor Statistics. They earned a mean $45,940 per year, or $22.09 per hour. The largest number of jobs belonged to the 73,490 construction labors who averaged an annual $38,030, or $18.28 per hour.
https://www.infrastructurereportcard.org/cat-item/dams/
To claim it has anything to do with the pay scale of subway workers is absurd.
> So more money to privileged, highly-educated folks who are in the top 10%?
Basic research is about growing the pie of opportunity for everyone and the fact it is not normally rewarded in a capitalistic society. Do you genuinely believe technological growth has not improved life for everyone?
> This is my point. Politics in the U.S. is a battle between the top 1% (represented by the Republicans), and the top 10% (represented by the Democrats). This spending won't reduce the inequality the article is talking about.
No.
It is a battle between the economic interests of the 1%'s vs. literally everyone else.
http://www.igmchicago.org/surveys/tax-reform-2
Independent economists whose paychecks are not cut by people with political agendas rated the latest "1%" plan 1 in favor, 37 against.
Adorable. Can you name one that is not in the 1%
* Repairing infrastructure?
* Better public education (especially adult retraining)?
* Expanding public transportation?
* Medical R&D?
* Other tech R&D - like batteries, fusion, quantum computing, superconductors, etc
* Single payer healthcare?
The root cause is that every developed nation on earth runs an inflationary monetary policy coupled with perpetual deficit spending. Money creation via central banks and deficits is not uniform, it pours into economies via cheap credit, subsidies, spending on boondoggles, and it's the people who have first access to this newly created money who benefit the most, and these tend to be the people with a lot of capital, political connections, etc. The average person simply sees their limited buying power decreasing over time.
There's that and then also the problem of the global monetary system. The average American is getting crushed by the dollar reserve currency system. America can't be globally competitive in labor intensive industries in substantial part because of it. Triffin's Dilemma. But the ability to issue endless USD denominated debt that the rest of the world eagerly gobbles up is fantastic if you're closely attached to the DC cash spigot or NYC banking. So there's this direct opposition of interest between the current elite who derive enormous power and wealth from the system, and typical Americans who just want a job.
Seems a bit hyperbolic..The unemployment rate for programmers is <3%.
I’d be shocked if the numbers didn’t look very different if you looked at the expansionary cycle to date.
There is a tremendous confusion in separating wealth from producers to non-producers.
Taxes very frequently end up going from the poor to the rich, because of how benefits are given away (ex. prop 13, mortgage interest deductions, rent control). Not only that, taxing the rich for producing would make less production, which is fundamental for economic growth.
Why should a developer build a 40 apt building and pay 100x the taxes a month single family home next to it pays? Didnt he just make everyone a lot richer by his planning and exhertion?
Ironic how the state (at least in the case of the US) is the largest it has ever been.
Do you think fame inequality is a problem? There are people who have 100s of millions of followers/fans and then there are people who are not famous (vast majority).
Why is that not considered a problem?
Fame inequality:
1. Undermines democracy. If you have a tiny group of famous people who have a massive cultural influence, their ideas and opinions matter almost infinitely more than ideas of those who are not famous. This by definition undermines the idea that everyone's opinion/vote should have equal weight.
2. Damages people's health. When people see someone famous it can make them depressed because they are constantly being compared to cultural icons. This can have serious impact on psychological health.
3. Perpetuates itself. People can become famous and get a leg up in life just because their parents are famous. Is that fair to all talented people who don't have famous parents?
Inequality can be a problem alone, even if all else is equal ,because the greatest danger to freedom is the concentration of power, and what is inequality but the concentration of wealth and power into fewer hands?