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Comment by giantg2 | Hacker News Reader

Wouldn't that also force the less wealthy to sell their assets to pay the tax? They have less cushion and fewer assets, so they would be more likely to need to sell and reduce the compounding they could achieve, leading to less upward mobility.

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There are approaches that can alleviate the impact on the less wealthy (think progressive taxation; taxing progressively only amounts above predefined limits, such that you don't end up getting less money in hand after a promotion etc).

But, I'd be curious to hear what do you (and people in general) consider wealthy-but-less-so, if that makes sense. Can we try to assign very rough dollar ranges on these categories?

I think that makes sense in an academic/theoretical setting. I think it would require a massive tax/policy overhaul to make it work in real life (which would be good but seems unlikely). We seem to tax just about every level of income, but then offer all sorts of credits, deductions, etc to promote some special interest. And the special interests (looking at your TurboTax) want to keep it complicated to make money off of it. Then we have all sorts of use based taxes like property, gas, sales, guns, alcohol, cigarettes, etc.

Probably the simplest way to assign ranges of income is to apply statistics to the unadjusted pretax income in the US. It would probably make sense to adjust it based on COL too. I'm not sure what numbers and adjustments the following distribution used. I did not expect to see 10% of households making over $200k. That seems insanely high to me, but maybe that's an effect of HCOL places like Silicon Valley and dual income families.

https://www.statista.com/statistics/203183/percentage-distri...

I wonder with crypto and the dysfunction of nation states growing if property tax or some sort of land value tax may be the only collectible one in the future?

If it collapses that far, then I think there's a chance that we could see the old Depression farm sale paradigm where the community would gather at the auction to make sure the only bidder would be the evicted owner so they could buy it back for a penny. Or we could see complete overthrow of the system.

This still happens now. So I'm quite sure we'd see it happen.

Is it possible for everyone in a society to achieve upward mobility through compounding?

No. Some limitations might be inherent (disabilities), some might be personal choices (spend rather than save, gamble). It also depends on inflation and what sort of returns one gets. It offers a chance at mobility, but no guarantees. There's almost no mobility in today's world without some sort asset appreciation.

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