Does someone earning more than you hurt you?
Also… do billionaires employ people? Do you want their employees to have their jobs seized from them when the johny555 tax goes into effect?
This is an absurd slippery slope, and a bizarre appeal to "plenty of people" to boot. There is a significant and categorical difference between $500/mo and $1 billion. You undermine your own point by not addressing it.
In fact, if there were a wealth cap of $500/mo as you posit, it would take over 150000 years to accumulate $1 billion, which frankly only reinforces how excessive that amount of money is.
It's the same problem when it comes to tax increases - everyone thinks raises taxes on everyone else is a great idea, themselves? Oh, not me, I'm not rich.
This even happens on HN which is a pretty well off crowd. When the SALT deduction was capped everyone complained - even the same ones that claimed "I'm fine paying higher taxes".
The same way most of them do now -- through venture capital firms. Or maybe if they had more tax revenue, the US government could sponsor more speculative research and companies.
I'm not talking about "Let's start a social media app for Aardvarks!" kind of ideas, but actual scientific research. We used to have pure research orgs like Bell Labs, but companies aren't funding pure research any more, so we need more investment from government. Not every idea should have a path to monetization before it's funded.
I don't equate "skunkworks" with high risk. To me, that's not "risk" as much as "I don't care about monetization in the first place", like you're saying. I agree that research without promise of a payout is sorely missing these days.
When I say "maybe we should have less high risk", I'm thinking of fly-by-night companies that do make a social media app for aardvarks, spend a bunch of money on slick marketing so they can pump their IPO, and then pull the rug with them when they bail.
But billionaires don't become billionaires by doing skunkworks projects. They often do the latter.
So there is the possibility the market can be made to care again.
And sure, you could just say "well, let's just not do bailouts then", but then that leads to things like bank closures, airline collapses, imploding automobile industries [0], etc. Basically, we can argue about specific cases, but there are some things that become too important to fail.
Ultimately, there are things that benefit society that taxes should be used to pay for. Some of those things should be done regardless of what any potential payout might be. Note that billionaires don't help solve these problems. If anything, they make them worse because they often pay a far lower percentage tax than anybody else.
[0]: Of which the US at least is highly dependent on. I want this to change, but it won't be an overnight thing by any means.
This is rhetoric that tries to confuse two totally different scenarios in order to convince the majority to oppose something that only hurts a tiny minority. Saying "one person should not have 5 generations worth of wealth" is not the same thing as saying "people should not make a middle class salary". They aren't even similar. If there was any place on earth where $1,000,000,000 was comparable to $500/month in any way, you might have a point.
> Does someone earning more than you hurt you?
Yes. Without a doubt. Wealth is freely convertible to and from political power, so outsized wealth translates into outsized political/lawmaking power, which affects us all.
Let's make an extreme example if you don't believe me: Should sextillionaires exist? Do you think that maybe, just maybe, someone having $1,000,000,000,000,000,000,000 might have a negative effect on other people's lives?
> Also… do billionaires employ people?
Some do, some don't. Some non-billionaires employ people, some don't. Employment was around long before billionaires. It's not a requirement.
To me, wealth should be like the speed of light. There should be a limit, and it should be increasingly harder and harder to approach (but never achieve) that limit as you get wealthier. Not sure how you'd actually implement such a Lorentzian economic speed limit, but it seems fair to me. Make the limit high enough where at 99% of it, you can have your needs and your family's needs fully met in the most expensive neighborhood on earth, or whatever.
Any cap you put on the top could have the effect of reducing the value of a currency meaning the buying power doesn't change. A billion cap would make your million dollar house worth $100. However you slice it you are poor and someone else is rich.
The problem with billionaires though is they typically make and hold their money through assets, so what we really need is a bunch of reforms on how we tax assets. Namely, it should be such that if you have more than $1B in assets, taxes eat away at it pretty swiftly until it is back down to something reasonable. I think that's something we all can get behind.
Disclaimer: I live in a 3rd world country and my salary is 1/3 of what the standard US salary is.
YES, I do believe that everybody's compensation (including mine) who are in the top 10% of the population should be decreased/limited. Provided that their living costs are adjusted so that the $500/month get you similar standard of living to other nice places (say, Chile, Mexico, Spain, Portugal, etc).
The top 10% of the population hold 70% of the total wealth. That's just crazy and unsustainable. How the 90% of the population haven't turned on us is just sheer luck and a political, security system that is rigged in our favor.
I would be happy to be part of a "pay cut initiative" for all the top 10% earners, if it meant equalizing opportunities for everybody. I had the opportunity to grow up and be friends with poor people who just did not have the chance to succeed, so I don't believe the "poor people are just lazy" narrative. There's good hard working people that just never had a chance. Similarly how there is bad rich people that just want to leech from others.
Been sustained so far throughout all of human history.
https://www.taxpolicycenter.org/statistics/historical-highes...
Don't confuse monetary inequality with wealth inequality. Measure by the standard of living, not monetary units.
What are the actual differences between the life of the average American worker and Jeff Bezos? It's not that big. Jeff Bezos has the ability to buy luxuries most of us could never dream of, sure, but what about the essentials?
Nearly everyone can get fresh, nutritious meat, as well as fruits and vegetables. High quality milk and dairy products. Frozen goods. Bacterial epidemics are unheard of. Our recent viral pandemic increased annual deaths by about 10-15% over baseline — compare this to epidemics which used to wipe out entire populations. Life expectancy for all people, regardless of class, ranges between 2-3x human life expectancy in a state of nature (roughly 30 years). You can travel hundreds of miles in a day for only a few hours of labor worth of money. You can cross continents or oceans with a few day's of labor worth of money.
Sure, Bezos can have a fancier car with someone driving or his own jet with a pilot flying, but at the end of the day, you can both take off from LAX and land at JFK 6 hours later. You're both going to eat 2,000 calories of nutritious food. You both have running water. And, you're sitting here, both able to communicate with everyone in the world instantly.
Let's not buy into the political propaganda about inequality, the reality of the situation is right in front of our eyes.
Here are just a few massive differences between the life of the average American worker and Jeff Bezos that have nothing to do with buying luxury goods:
1. Jeff Bezos can get an audience with any Congressperson, any State governor, most countries's heads of state and probably the President of the US, with a telephone call and likely with less than 24 hours notice. That person will listen to and likely be influenced by what he says.
2. Jeff Bezos's public statements can move global financial markets.
3. Jeff Bezos can (and does) own and control mass media companies which can amplify and downplay political issues and shape the outcomes of elections.
4. Through philanthropy, Jeff Bezos can, if he wants, simply decide what counts as a "public good" to be funded and supported, as opposed to the public deciding through the democratic process. Bezos is capable of offering an amount of support for his causes that dwarfs government-funding. We are merely lucky that billionaire philanthropists have so far focused on good things like curing malaria and not on evil.
Basically, when you remove money, something else becomes the currency you're describing. Taking away billionaires wealth might actually make it harder to identify the people who have this influence. Rather than news outlets writing articles every other day about Jeff, you'd have some shady person high up in some unelected bureaucracy getting to wield this power. How is that better?
Can he?
[1] https://www.forbes.com/sites/debgordon/2021/10/13/50-of-amer...
Americans are the people who complain when the wifi goes down or someone says the wrong word.
Well, then, surely it doesn't matter if we tax away 90% of Bezo's wealth, right? His living standard will be same.
Beyond that, though, you can only tax away 90% of billionaires' wealth once. That whole game depends on them continuing to produce the same amount of wealth, even though they won't receive any of the returns. (Remember also that most of these people reinvest the majority of this money into their ventures, meaning that taking these dollars will have a compounding negative effect on future productivity.) Look at history. Your superficially benevolent idea has been tried, it always results in mass hunger and death.
Why would they keep taking on so much responsibility? To raise your standard of living? Why should they care about you?
Any of those guys are capable of becoming a surf bum, living on $30k a year, but instead, they build massive companies that deliver incredible value to the rest of us — they get their money because we pay them for that value. Would you rather incentivize Elon Musk to keep working on Tesla or would you prefer him to retire?
So you are advocating 0% taxes?
That argument (of type Econ 101/Ayn Rand) is misguided, because the world is not as envisaged by Econ 101 (or Ayn Rand, who famously enjoyed Social Security and Medicare).
Counter arguments:
1. Society has made available the gift of the limited liability company, to encourage risk taking and entrepreneurship.
2. Society has made available streets, canalisation, schools, defence, police, fire fighters, certain forms of insurance, etc., for a simple reason: market failures. Those goods would be provided in insufficient (suboptimal) number by the free market due to: strong positive externalities, non-excludability, adverse selection, and many other reasons.
For those (and many other reasons) government does have the right to taxation. The question then is the optimal level.
> Your superficially benevolent idea has been tried, it always results in mass hunger and death.
Yeah, the poor Northern Europeans, starving to death... Somewhat higher income, capital gains, estate, and maybe even wealth taxes won't result in mass starvation.
> they get their money because we pay them for that value.
Again, a neat Econ 101 idea that fails to take into account reality. "salary = marginal product" is only true under entirely idealised assumptions of perfect competition [1], in particular no economies of scale and no network effects. That is most definitely not the case for today's tech companies, which quite obviously have monopolistic tendencies, thus extraction of monopoly profit (rent) which accrues, guess to whom, the boss.
And, for what it's worth, if Elon becomes a surf bum, or twitters full time, we'll still get great electric vehicles, maybe a tad later.
[1] Here's a list: https://en.wikipedia.org/wiki/Perfect_competition#Idealizing...
> Measure by the standard of living, not monetary units.
From the paper below:
"This reflects considerably stronger global convergence in quality of life than in income"
https://www.cgdev.org/sites/default/files/technology-and-dev...
When we get 3days work week and 4 days of „time for my stuff” we can go back to discussing that.
The ruling class will happily soak up all spare productive capacity - and as the amount of work necessary to keep someone clothed, sheltered, and fed went down, that spare productive capacity grows, and more of it flows upwards.
Landlord was lending land to peasents - rich peasents, because bottom cast did not even have a chance to talk to landlord.
For the land peasents got, they had to work for the landlord specific number of days in a week. For some time it was 1-2-3-4-5 days per week. Most common was 3 days.
Thing is - the peasent was not obligated to do that work himself. He could have sent a son, family member or even hire someone.
That way it was super easy to keep his agreement with the landlord while mostly focus on his own farm.
Who had it terrible were bottom, poor peasents that worked for other peasents.
They did not have their own land and were at mercy of their “master peasents”.
They most likely had to work whole week or 5-6 days.
They were more of a slave than a peasent tbh, but its a hard disregarded truth.
Current middle class in our times could be translated to “master peasents” back in time. Slave peasents would be the slave-wage ppl.
When I discuss or compare medival peasents to current corporation workers I always compare master peasents to corposlaves.
And master peasents had it super better than corposlaves do now.
To claim that an impoverished serf working land "had 4 days off a week" is nonsense. They worked hard af for all sunlight hours for some seasons, and had plenty of leisure in times like the winter. On average, maybe that's 4 days off, but let's not pretend that working the land is not back breaking work. It's not leisure. If you really think some 40 hour wfh coding job is harder work than farming for your life, then there's no law saying you can't buy some land and go off grid. You're welcome to subsist. Hell you could land a few million subs on youtube airing the experience, that category is all the rage these days
Well.. noone said that. If you mind reading the comment again.
But its true that peasents had a lot more time to work on their own stuff than on what master told them to do.
Either way most peasents worked for higher tier peasent because landlord often has hubdreds of hectars of land.
But in the past 4 decades, I'll remind you that around 800,000,000 Chinese (that's eight hundred million people) were lifted above the global poverty line and were able to stop subsistence farming. https://www.worldbank.org/en/news/press-release/2022/04/01/l...
So to say that global inequality is getting worse, when billion+ have been lifted out of abject poverty in that time, it's not correct to me. Things were worse 40 years ago when billion+ more humans were below the global poverty line, even if today billionaires are even richer than the middle class.
Imagine you live in a neighbourhood of 50 people. Everyone starts earning more, that's absolute income increase. Then imagine your richer neighbours income has increased 100x faster than anyone else, that's income inequality.
Exactly. Didn't really change which broad group of families were in control (some were lowered a peg through taxes for supporting the wrong side.)
>Other than that top families basically unchanged 1000 years.
So we've shifted the goalposts from "all of human history" to "in my country" and only for the past "1000 years".
No... why do you think that?
> The top 10% of the population hold 70% of the total wealth.
That's basically been the case everywhere, all the time. In other countries the 'top 10%' has changed hands through revolution, war, etc, but it's still 10% controlling 70% (or whatever) - because they take the last 10%'s 70% and carry on! No goal posts moved there.
Someone asked a separate question about revolution, and I said even that's not successfully happened where I live. I wasn't making a broader point with that answer to that question.
> "all of human history" to "in my country" and only for the past "1000 years"
I mean... are you under some sort of misapprehension that before 1000 and outside of the UK there was some kind of democratic socialist consensus? Fraid not.
Well, according to your first assertion we're not supposed to cover only your country for the past 1,000 years. We're supposed to cover all of human history - every nation, as far back as at least 10,000BCE.
> Someone came back and pointed out that it hasn't always remained that way and there have certainly been blips
The blips didn't change the ratios though. Ratios have stayed the same.
> You then responded by saying "not in my country" for the past "1000 years".
Yeah - my country hasn't really had those blips. And the blips in other countries didn't change the ratios anyway, just transferred who owned them, so it was a separate point.
> Well, according to your first assertion we're not supposed to cover only your country for the past 1,000 years.
No it was a separate comment and point!
I'm not trying to be pedantic, but this comment contributes to pernicious myths about the human condition. If you're interested in this subject I would recommend the book "The Dawn of Everything" by David Graeber and David Wengrow.
It doesn't though. Taxing the rich, limiting the existence of billionaires is not going to do anything for equalizing opportunities.
If you think so, then please tell me the name of one efficiently-run government organization?
> If you think so, then please tell me the name of one efficiently-run government organization?
How are these two passages connected? If there's one efficiently-run government organization (there are, even in the US—benefits programs tend to be quite efficient, contrary to "common knowledge") then that proves... what? That taxing the rich would equalize opportunities? The two things have practically nothing to do with one another.
Why is government judged on efficiency rather than service?
If there's a government agency with money to give to vision impaired people, and they set up a website (graphics heavy, non-ADA compliant of course) as the only way to sign up for the payments, that department would be extremely efficient - they might only be able to reach a fraction of their target market, but they'd do so very efficiently with little overhead and they'd even have money left over since they had so few applicants, so they could cut the budget next year!
In contrast, if that same agency took $100M of their fund to set up offices across the country, and hire outreach staff to drive to the homes of qualified applicants to help them apply, that wouldn't be very efficient, but it would provide better service.
Government is not a business and shouldn't be run like one.
Please let this trope die. The US government is generally, and especially when it comes to welfare programs, efficient.
"It currently stands at about 25 percent, as did in the 1970s. This means the ability of the poor to sustain a higher level of income independently of transfers has not changed over time."
[1] https://www.richmondfed.org/publications/research/economic_b...
But these are not the "capitalist class". They don't own significant portions of a company unless they started a small business (a lawyer or doctor running their own practice). They also generally had to go through an enormous burden to get there. A doctor for example might be nearly 40 years old with $500,000+ in debt before they're making $300k, and many doctors will never make that much, period.
The funny part of "limiting income" is that it only affects the working rich, not the capitalist class. Steve Job's salary was $1 and many CEO's famously have basically no salary and compensation in stock.
So what do you do? Tax their stock sales? We do and should do more. Force them to sell their stock for the benefit of the taxpayer? Ban them from even owning large amounts of the company? Have the government automatically own part of the company? All of these sound yikes to me.
Basically, you're saying that the current distribution is crazy/unsustainable (and maybe it is) but the distribution is actually not totally out of whack with the 80/20 rule (or Pareto principle).
Just wondering where your confidence comes from that a functioning society doesn't actually depend somewhat on that distribution? i.e. that the general populace's sense of "fair" isn't actually correctly calibrated at this distribution?
I would argue that it's not going to collapse to 1 artist or 1 song for a similar reason that all wealth will never be in the hands of 1 person. If the rate of change (or just raw distribution) in wealth is unhealthy, that will present itself in the form of a less healthy economy.
That will likely cause a bit of a churn and redistribution to sort of self correct. There's also the fact that wealth typically doesn't survive through generations all that well. If this didn't happen, the Rockafeller's/ Vanderbilt's/ Carnagie's from the past would still have the top wealth holdings - sure they are still incredibly well off and have a huge advantage from family name, but per a Forbes list none of them are in the top 2500 wealthiest.
You're not making a serious point if you're looking at world income to guide policy in the USA, or any other first world country, you're just making up a strawman.
do billionaires employ people
I'm sure they have a small household staff, maybe security, yacht staff, private pilots, so maybe in the small hundreds.
But Tesla employees a 100,000 people, SpaceX employes 10,000 - both of those companies would exist regardless of Elon Musk's personal wealth. In fact, having so much wealth in one person is a liability to the company -- Musk can singlehandedly tank Tesla's stock.
You're making bizarre nonsensical arguments here--slippery slope, strawman, etc.
So how do you decide who's scale to use?
Like the way all other murky subjects are settled, you just decide on one. We don't legalize murder just because some slayings are justified. The existence of grays areas does not preclude the black and white.
There has to be a better solution.
Sure, over successive generations, the family might lose control of their original fortune/company, but that is compatible with the intention of the tax.
edit: Just noticed that you are talking about estate taxes and I'm talking about wealth taxes...
But what you propose is probably better than the alternative at least.
He who owns then capital is king, so tax the capital.
But in reality it would as you say force all sorts of unwanted liquidation and monetisation of assets just to pay the tax.
You don't see your error?
What we're talking about here is when people like Jeff Bezos have billions of dollars of income--direct income from gains realized in asset sales, income generated from property, stock sales, salaries, etc.--we shave a significant portion of those gains off in a wealth tax.
The economy is not a zero sum game. But billionaires are getting all the growth while middle class and the poor see their share of the economy shrink.
This is not about my neighbour earning more than me, it's about corporations that take over big chunks of the economy.
In your own sentence you had to use specific words "their share of the economy shrinks" can be true, while their wealth increases. The economy is not a zero sum game. The middle class could see their share of the economy increase while also having standard of living, total wealth, etc. all decreasing.
Yes. Because they can afford private schooling, legal and medical care that the bottom 90% cannot because those services are privatized and only available to the very wealthy. If the ruling class/wealthy who controlled the system could not depend on their vast wealth for great schools for their children, health and legal protection - then all of a sudden the social system would be spectacular, and everyone would benefit.
Inequality is poisonous because it creates massive disincentives to create a working socialized health, education, legal system....
Game theory says there are no easy answers. Child outcome data suggest that strong family structures seem to have the most impact.
There doesn't really seem to be much of a tragedy of the commons when it comes to healthcare - nobody is really that excited about getting an unneeded biopsy, or hip replacement, or colonoscopy....
Agreed that full-throated capitalism seems to be the best system when it comes to allocating most resources (I absolutely do not begrudge Billionaires their Yachts, big houses, islands, private jets - have at it!) - but it's pretty sad when someone who works hard their entire life has to die 10 years early because they can't afford a decent doctor.
Nobody makes billions by "earning more than you", they make it my owning companies, or funds, so this has nothing to do with salaries.
But the fact is that the existence of billionaires hurts everyone, especially in poor countries, but also definitely in the US. Now I'm not talking about the ethics of some people wallowing in wealth why others are starving, the biggest problem is that when you reach a certain level of wealth you can start influencing, or even controlling, public policy. This obviously has the effect that public funds are diverted away from the public into their pockets. In the third world this process is quite direct, in the rich world it's more about enacting policies that benefit these oligarchs, at the expense of everyone else.
This is a huge problem.
Someone taking the wealth that other people have produced with their labor is not earning, though. And a lot of us do think that earning 300x what the average worker does is a physical impossibility.
Never mind that a billionaire could live anywhere and literally couldn’t spend all of their money if they tried.