Hacker News Reader

Comment by Veelox | Hacker News Reader

One of my issues with the discussions of reducing wealth inequality is that people talk about the negatives of having billionaires but often propose measures that would negatively affect millionaires. Also, it would be nice to see more discussion about how to improve the wealth building ability of those at the bottom.

Often times the argument starts with something like "rich people have to much money" and then talks about how we should take more money from them. I had a lot of respect for Bernie Sanders because he started with "we should do X good thing for society" and then he proposed a specific tax to pay for that thing. I think that is much better rhetoric than arguing that some people have to much.

View on HN

I have no issues with income / wealth inequality, per se. But I have some issues as to why that inequality happens. Some important rationales are the following:

A) Taxing high income will cause capital / investment flight.

B) Wealth trickles down.

A: could be true, but it does not warrant letting private investors take all profits without incurring in the necessary expenses, which are currently funded by the tax payer (disproportionately low-medium income workers), or simply not covered (health care).

B: This is, after several decades of lying to the electorate, patently false.

>But I have some issues as to why that inequality happens.

Can you expand on why inequality happens and some ideas to change/fix the causes?

I'd venture a guess based on B) that GP believes that inequality happens in part due to tax laws that support the idea that wealth trickles down, while GP believes (as do I), that it absolutely does not. A proposed fix would be to stop giving tax cuts to the rich/businesses in hopes that the not rich will somehow magically get some trickled down benefit and instead do things that actively benefit the lower economic classes.

>A proposed fix would be to stop giving tax cuts to the rich/businesses in hopes that the not rich will somehow magically get some trickled down benefit and instead do things that actively benefit the lower economic classes.

So it seems like you are saying, tax the rich and do something to benefit the lower economic classes. What specific policies to you support that would benefit the lower economic classes?

> So it seems like you are saying, tax the rich and do something to benefit the lower economic classes. What specific policies to you support that would benefit the lower economic classes?

The simplest one would be to reduce taxes which disproportionately impact those classes; moving the trust fund contributions currently made out of the employer share of payroll taxes to be drawn from general revenue would be one example.

Even though it's technically a business tax cut, is directly on a cost of employing people, making employing workers at any given wage cheaper for the employer, so that more of the employer cost goes to the employee.

As I see it the problem is that profits from speculation and rent seeking results in concentration of wealth providing even more leverage for speculation and rent seeking. Thus forming an accelerating feedback loop.

A particular elegant way to address that is to realize that most of this wealth accumulation is expressed in terms of property. Fundamentally a relationship between two parties, the non-owners, and the current owner. The former who takes the opperunity cost of not having, and the owner who extracts the rent-value from having.

So one way to adress the fundamental issue is to compensate the former group for their opperynity cost cost by taxing the owner. The difference between the opportunity cost and extracted rent can be seen as the unique contribution of the current owner, but the rest could be distributed fairly among the non-owners as a dividend.

The way I like to look at it: What "societal goods" and "societal bads" come from a wealth distribution like we have today, where a vanishingly tiny number of people hold close to all the country's wealth. If the bads outweigh the goods, that in itself should be enough of an argument to do away with the distribution.

Reply on news.ycombinator.com