All while the world's elites have doubled or tripled their fortunes. Great Robbery would be a more apt name than Great Resignation.
And its not clear that US federal spending is causing the inflation. Month-on-month, the trajectory has been remarkably similar between US, UK and EU.
https://econbrowser.com/archives/2022/01/inflation-us-vs-eur...
Update: I think some people's views of this are skewed by the prices in the places they live. It's worth while doing the comparison of what can be bought for about 1.4 million, in Roanoke:
https://www.zillow.com/homedetails/15-Cardinal-Rd-SE-Roanoke...
and in Los Angeles:
https://www.zillow.com/homedetails/2495-Butler-Ave-Los-Angel...
That's why the concentration of wealth into a very few hands at the top marches on, not because of "wages".
If someone one owns a billion dollars of stock foobar, and foobar grows 10x, then that person is now worth 10B and "made" 9B. However they have not sold anything so while they can be reported as making 9B, they are none of it was directly cash and not taxed; at least not yet.
However, while Bezos "only" has a salary/bonus of 1.5 million a year, it is very common for executives to have total comp packages in the 10s to hundreds of millions a year. These can easily be converted into hourly rate equivalents because there is only so many hours you can work a year.
They can cycle debt to avoid ever having to sell a single share for their entire life, at rates more favorable than any middle class person has access to.
We can fix our tax code with legislation to address this loophole, our politicians just don't have the will to do this currently (largely because many of them amass fortunes through stocks and insider tips, IMO).
Of course, if that value drops you’ll get margin called for more collateral
Unaccredited investors (us, commoners) have access to margin loans for up to 50% value of account.
Accredited investors have access to portfolio margin which can be up to 90% of mark to market value.
That’s nothing to say of any custom financial instruments that banks might come up with to save bezos any taxes. Think swaps.
A wealth tax could address this, but perhaps there are other legislative options, like (partial?) realization of capital gains when used as loan collateral in the income tax code, or something like that. I'd prefer that latter, as it seems more direct.
But I don't know the specific best way to address this, I'm no a tax expert. But, I think its pretty clear that this scheme is an abuse of the system and should be remedied in some way.
In fact, unless you have a cash-only account, you likely use margin every time you buy & sell a stock. Technically, stock transactions don't settle for 2-3 days. When your brokerage fronts you the shares to immediately buy, sell, or transfer funds, it's all margin under the hood. It gets even more complex once you get into options, swaps, and other esoteric financial instruments.
TLDR: It's simple in principle, but very complex in practice. Further complicating IRS rules is unlikely to win the whack-a-mole competition -- especially when IRS auditors under-target the ultra wealthy to begin with.
The historical critiques of class warfare have some good points, because there's obviously a privileged class here that's doing really well on the backs of labor, and this privileged class can afford to buy (and let's face it, it's really bribe) itself ever more privileges for a very tiny share of their wealth.
If the definition of "rich" is "independently wealthy," that family certainly doesn't meet it. They still have to work for a living.
If it means you never have to worry about where the next meal is coming from or losing the roof over your head, sure, a lot of people are "rich." And maybe this is better than 90% of humanity does, but it's still not a reasonable first world standard for being "rich" IMHO.
He answered: 'No, you are often winning, but when you lose you lose way too high.'
(-;
No they don't. They could live in a median dwelling with a median income indefinitely on the interest of what they've saved over the past few years.
If you're saying that they have to work for the living that they're accustomed to, so does Musk.
"Shaq is rich. The white man that signs his check, is wealthy." [Chris Rock]
https://www.investopedia.com/ask/answers/071114/can-moving-h...
“Moving up” in a tax bracket never means earning less in nominal or in real terms. It just means you get less in your pocket of the extra you earned, not of the total you earned.
0 - theguardian.com/money/2014/jul/20/benefits-cliff-minimum-wage-increase-backfire-poverty
It's still very misleading to say "wage gains aren't good" though - the problem is not that you got a 5% raise, it's that inflation is 5% so you need a slightly-higher-than-inflation raise to keep up. If you didn't get a 5% raise you'd just be even worse off.
https://www.irs.gov/newsroom/irs-provides-tax-inflation-adju...
IRS provides tax inflation adjustments
And links to https://www.irs.gov/pub/irs-drop/rp-20-45.pdf
"This revenue procedure sets forth inflation-adjusted items for 2021 for various provisions of the Internal Revenue Code of 1986 (Code)"
It's states adjusting for inflation for the tax year beginning March 2021. The document came out in October 2020 when inflation was 1.2%, I'm not sure when they adjust it and you may disagree with the measure of inflation
The year before was November 2019
https://www.irs.gov/pub/irs-drop/rp-19-44.pdf
Here's the one for 2021/2 (Nov 29th 2021)
https://www.irs.gov/irb/2021-48_IRB
Married Individuals Filing Joint Returns, lowest and highest bands:
Thresholds for tax year 2021/2 goes from 19750 to 19900 (0.7%) at one end, and from 622050 to 628300 at the other (1%)
Thresholds for tax year 2022/3 goes from 19900 to 20550 (3.27%) at one end, and from 628300 to 647850 at the other (3.11%)
To simplify 100k split 50k @20%, 50k @ 40% is less than (105k split 50k @20%, 55k @40%) / 1.05
The fist is worth 50 * 0.8 + 50 * 0.6 = 70k, the second is worth (50 * 0.8 + 55 * 0.6)/ 1.05 = 69.52k.
If you make $41k, you still pay 10% on your first ~$10k, 12% on the next ~$30k, and 22% only on that last $1k.
So yes, you could be in a situation where you had been at the top of a bracket, and your incremental wages from the raise are taxed at the next bracket's rate. But it doesn't trigger any kind of situation where your entire salary is now charged at the higher rate.
Yes, of course, a 5% raise does not compensate for 5% inflation. But that's just because taxes exist, not because you are entering a higher bracket per se.
IMO, the whole pervasive narrative around tax brackets being something to fear is a fear-uncertainty-and-doubt move by those seeking to vilify the tax system. It's worked surprisingly well to those ends.
There are a few edge cases where these can be technically true but they are rare and limited in scope and magnitude.
I'm not sure how else to read that. If you make more money, you can buy more things. Even if you go up a tax bracket. If you make twice as much money and that moves you up a tax bracket, you won't be able to buy twice as many things, but you can still by more things than you could when you made half as much. Maybe 1.8 times more things.
Do some lawmakers only support a law because it will have a lower (min. wage) or higher (tax) real monetary significance in the future?
Other places do have more horrid, retroactive taxation.
But that said, tax rates are typically based upon cutoffs. So the more you make, the more tax you pay.
So this means that if you get a raise to meet inflation, you could see your raise more heavily taxed, if it is above the next tax bracket.
Eventually, with enough inflation, and no changes to tax regs, you could see the very poor, taxed like the well to do, a few years before.
There are also some tax benefits, which have income cutoffs, and also programs which have income cutoffs.
With inflation at historic lows for 25 years, there is little institutional knowledge about how fast >10% inflation can erase buying power, and at the same time big raises mean nothing..
Being highly paid in salary you are subject to very high taxation where someone who receives most of their income in stock and sells after holding for a year would have dramatically less taxes on the same amount of money received. Its why these CEO's making $1 a year(and having stock grants in the 100's of millions) are a slap in the face to the working engineer who incurs substantially higher taxes as a percentage than the CEO making 100x his salary.
If inflation goes to zero, that does not mean prices have fallen to where they were before. It merely means prices stop increasing further.
So a temporary bout of inflation equal in magnitude to a one-time but persistent wage increase, _do_ cancel out.
Gas prices are high now, but nobody expects them to stay at this level indefinitely. (And nobody expects the price of gas to stop increasing without then also dropping back down.) Supply-chain related price increases aren't permanent, and go in the other direction when the supply chain improves.
And the larger point is it's a positive development if workers really are able to renegotiate their compensation -- and that isn't entirely negated by slightly higher prices in January.
Or, more accurately: if everyone has more money, wouldn't demand for goods & services go up? And per the law of supply & demand, if demand goes up, prices should go up. And, per how inflation is calculated (CPI), if prices go up, inflation is on the rise. That's a lot of steps to get from "printing money" to "the value of the US dollar decreases".
It certainly can cause, and is a component of today's, inflation. But there are three confounding factors:
First: We're in an unprecedented economic climate, yet we still apply many of the laws of economics written during the Gold Rush. Today, its reasonable to assume that many people have a "demand maximum"; outside of a few high value commodities (houses and cars being the two biggest), there's only so many CPI-included goods & services which can see significantly increased consumer demand given a larger money supply. Food doesn't really see increased demand. Housing and Living supplies don't. Maybe you splurge on a PS5 (if you can find one, see (3)) or a bigger TV.
Houses & Cars, being the two biggest areas people will splurge, and related to that, Rent, are seeing massive price inflation. Which leads to:
Second: All else being equal, the average consumer sitting near a "demand maximum" socioeconomic point should mean that they're sitting on more money in a bank account. But, most aren't. The fundamental reasoning for this is complex, but it boils down to: most of the money being printed by the Fed isn't entering consumer pockets. On the contrary, most Fed policies have hurt consumers more than helped; because of rising real estate prices, which are in no-small-part due to low interest rates, housing & rent prices have skyrocketed, which mostly hurts consumers. QE over the past decade has lined American company balance sheets to unprecedented values, but that money hasn't trickled down to front-line workers in any meaningful sense; all it really serves to do is inflate stock prices, which destabilizes the stock market and makes for fun Forbes headlines about the richest Americans getting even richer (on paper).
Third: Biggest: Supply chain shock. CPI is calculated based on the price of consumer goods. Supply & Demand overwhelm the pricing decisions of most consumer goods. Some products are experiencing demand shock; but nearly everything is experiencing supply shock right now. Blame COVID. Blame China & Russia. Blame capitalism's tendency toward hyper-optimization creating a brittle supply chain.
Overall point being: Many correctly associate the word "inflation" to mean "weakening of the US dollar", but then incorrectly extrapolate it to mean "weakening of the US dollar relative to other currencies". The reality is exactly what's written on the box: its weakening relative to what you'd buy with it. And if its happening to most currencies (as it is, today); its not a currency issue, it's a supply/price issue. I'd argue not only is it not clear that Fed spending is causing inflation; its most probable that it isn't, and Fed spending over the past two years has been a positive, invisible force against higher inflation.
This has been going on for like 30-40 years. It's sad, but nothing new. I got about a 4.5% value cut this year.
I have not done the math, but I would not be surprised to see this is true for me. Certainly feels like it.
I do not hate my current job, and I loathe interviewing, but I feel like I will need to jump soon just so I can push the reset button and get my compensation to keep up with inflation lately.
Some things changing hit some people more than others. For example, high fuel prices would hit those very dependant on fuel.
It could easily be 20% raises for those moving and 1% for those who are not.
EDIT: this was... 2004/2005 era.
Not really, as in this field that is about halfway through your tenure. Market has certainly shifted a lot in 9 months past.
Either you agree to buy or sell at a certain price, or not. “Value” plays no role in the determination of prices.
There are other meanings of the word "value" in business transactions, but that is probably the most common and fundamental one.
The subjective assessment of the "value of the trade" is then a function of the subject's alternatives, which is usually how much someone else will pay or accept from them.
I find the term utility to be more beneficial than value, due to it being less likely to be confused. As a boss, I would say I value all the employees equally, in human terms. But the employees provide different amounts of utility/$. Although I can see how people use value and utility interchangeably.
I agree that it is a function of the alternatives, but the operative alternative here is not trading. The best way to assess value is that which you lose by taking something away, like taking a player out of a team or a customer out of your book of business
Note that for buying and selling labor, price is not only the amount of currency being exchanged, but will also include things like work schedules, work environments, break time, location, etc. I prefer to think of it as $x per a certain amount of quality of life at work.
Lots of reasons.
First of all, job hunting takes time and effort. If you're rusty at interviewing and need some practice, then even more so. People that have kids or other responsibilities outside of work have even less of both available. On top of that you have to face rejection, which for many people is emotionally difficult.
Secondly, even if everything goes well, it's still a substantial risk. The new job might seem great at first, then turn out to be a nightmare a couple of months in. The old job might not be ideal, but you're used to it, and know you can live with it -- it's the devil you know. Same way that couples often stay in unsatisfying relationships for years, because it seems better than risking ending up alone.
"The new job might seem great at first, then turn out to be a nightmare a couple of months in"
This is pretty much most of my jobs. The current one is probably the nicest I have had in a long time but I still need a raise as the thought of working until 65 just to be old and then die fills me with existential dread.
On the surface they are complaining but I suspect many are using this as an opportunity to make changes that they've wanted to make for a long time but couldn't for various reasons. Mainly because elites tend to play game of thrones in their respective organizations and it wasn't politically favorable to make certain changes before covid.
Who and how?
https://www.reuters.com/business/pandemic-boosts-super-rich-...
It’s all a function of two things: 1. what percentage of your wealth is where, (ie home, stock market, checking account) and 2. Even if you and a rich man are both 80% in the stock market, he’ll come out in absolute terms having made more money.
Is that fair? I think so. Both made the same percentage. And if it drops, he’ll lose more absolute money, too.
If you had just read the article or looked at the report, you'd see that the time frame involved includes the March 2020 crash, which in fact did not cause a massive cut for billionaires, who maintained 2.0% of the worlds wealth throughout.
Not that these things don't happen regardless but artificially inflated capital (AKA debt) perpetuates the issue.
Maybe we should realize that increasing debt via banks and financial products is not good in of itself. Especially when we contrast it with investing in technology and workers.
The words "all" and "doubled" are an exaggeration, though.
My concern with this is primarily because people in Germany (not that many) believe that the pandemic is controlled by big pharma, big tech and by the 'elite' (great reset) and I think it's just much simpler described somehow else than the control of rich people.
I don't get it. Why does what they do have anything to do with what you or I do? Why does anyone begrudge someone else for being lucky, harder-working, in the right place at the right time, better looking, fitter, smarter, better at business, better at making connections, faster at learning, or anything else that helps them acquire more wealth? Was it at your expense? I've certainly been passed for hiring because someone found a better candidate. I've receive smaller raises than a co-worker probably because they did more impactful work. I'm sure I've missed opportunities due to office politics.
I guess this is where we should all whip out the "U mad bro?" meme.
Yes, I think the point of complaints of the richest becoming richer is that they are doing so on the backs of the poor. They are underpaying employees and otherwise taking advantage of the lower classes to extract efficiency from them. If at the end of the year, I'm poorer because wages didn't even keep pace with inflation but my employer is 2-3x richer, something is wrong.
In a healthy econonomy, the idea would be that the employer pays you for services rendered and we both come out ahead and with some sort of balance.
Which, in a truly competitive free market, that should be the case. Amazon shouldn't be able to pay peanuts and work employees like dogs (or drones). Because in a free market, a competitor would show up and pay more and treat employees with more respect. But the moat is too wide and deep for many of these companies.
Heck, even if someone did make a serious play for Amazon's online retail and fulfillment, they would simply use their AWS earnings or even borrowing power due to their market cap to fund their retail side and underprice you out of the market. (Something that they have done several times before).
The vast majority of the stimulus money was spent on bills, not frivolity.
[1] https://www.nbcnews.com/business/business-news/how-are-stimu...
“Lamborghini had its most profitable year ever during the coronavirus pandemic”[1]
Each of this cars may be something like 5 years of average salary in US.
[1] https://europe.autonews.com/automakers/lamborghini-had-its-m...
As soon as you get into rating the worthiness of a spend it becomes a bit puritanical.
The ironic thing is that I mostly agree with you, but judging others ‘wasted’ spend is too slippery a slope to go down.
Definitely absolute values have a meaning to me, otherwise would not make sense to talk about billionaires and non billionaires and a better classification would be starving and non starving people.