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Comment by snapplebobapple | Hacker News Reader

Your needs and wants are not a claim on my life. My life is my own. If you want to feed your money into whatever you define good as, go ahead. Dont expect anyone to cater to your whims with the fruits of their labors though.

this is the fundamental problem with society today. Everyone thinks they have a claim to goods and services they did not earn and hate people that earned them, rather than pushing for antitrust enforcement to break up market power that allows incompetent offspring to stay rich rather than lose their wealth and return to average wealth where their capability says they belong.

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It’s not the fruit of their labor. It’s a combined effort they’re disproportionately benefiting from due to the aforementioned policy failures/corruption.

The definition of "Earn" is what most genuine observers would debate. By definition, any interest/dividend bearing asset is a claim on a portion of societal output. As the majority of wealth in the US is now inherited, a rational individual might challenge whether such assets were "Earned". It's easy to take the opposite claim that those "Earnings" are the property of those who produced via income, or even those who consume via net savings.

The fine balance between income and savings are well understood through inflation/deflationary cycles - however there are less understood profit cycles. There are many historic examples of the political problems which emerge from too large of a profit burden - such as the French Revolution, Shogunate, Bolshevik's, and arguably the US revolution and Soviet Dissolution.

Where did you get the idea “the majority of wealth is now inherited”?

I’m curious about your assessment of what fraction of wealth was inherited one and two centuries ago, and how you’re measuring the total stock of wealth.

Holding legal title to a thing is one extremely culture specific subset of wealth; being healthy, consuming goods and services is another, having status in your communities of choice is yet another, and control of the levers of societal power is yet another.

I am deeply skeptical of the claim that a larger fraction of titled wealth is now inherited than it was centuries ago, and I don’t see how you’d measure these other forms of wealth in a meaningful way.

I'm using a simplistic and quantifiable measure of wealth - capital assets. I'd also admit to using a short-hand of wealthy people as equal to billionaires.

I don't see the purpose in comparing billionaires quantifiable wealth to other forms of wealth considering the high probability that billionaires are wealthy in all other forms as well.

https://www.investopedia.com/more-billionaire-wealth-achieve..."

This is not a credible source for even the (vastly different from originally stated) claim that billionaires are more likely to hold title to inherited wealth “now”:

- it’s a survey. Rich people do not generally agree to do surveys. It’s a survey done by wealth management businesses looking for new clients

- it’s a survey across an incredibly short time period, 9 years

- it contains the quote “While more of new billionaires' overall wealth was generated by inheritance, the number of new self-made billionaires still surpassed the number of new billionaires who inherited the money.”

Finally, most of the effect this link claims to measure is in mainland China. I do not think billionaires inheriting assets is the main policy failure of mainland China, and it doesn’t seem very relevant for a context where you said “As the majority of wealth in the US is now inherited”.

Ahh, yes the marxist slight of hand to turn compounding on foregone consumption into something evil rather than something that should be applauded and appreciated. Interest/dividends are not claims on societal output. They are voluntary payment for foregoing consumption and allowing that consumption to be used in some enterprise.

The profit cycle is just a dumber way of saying the natural outcome of a free market is monopoly, which leads to rent seeking and above marginal cost pricing. A revolution is the dumbest way to solve a monopoly, we have plenty examples of antitrust being used too effectively pre renquist supreme court and there's no reason we can't get back that direction.

> Ahh, yes the marxist slight of hand to turn compounding on foregone consumption into something evil rather than something that should be applauded and appreciated.

What's the foregone consumption on 1 Billion+ dollars of inheritance? These are sums that outstrip anything but the most conspicuous consumption. An individual who inherited such a sum could live with such consumption their entire lifetime.

>antitrust being used too effectively pre renquist supreme court and there's no reason we can't get back that direction.

This is likely a prime reason for US resilience to political instability. Recent moves have been to print money to make up for the short-falls induced by wealth concentrating at the top. However this only works provided that the folks to which wealth is concentrating fail to spend the wealth.

Someone didn't consume at some point and invested that foregone consumption wisely to get that billion plus dollars, at least in North America. There are still a few left over [hereditary dictatorships] monarchies in Europe that still keep their wealth accumulated through [straight theft] taxation. You're really obsessed with wealth passing from parents to kids and that really isn't the problem. Eventually kids do something dumb enough to dissipate that wealth if they don't have sure thing companies with monopoly power to abuse to shore up their wealth, it just takes a few generations. Go look at where the wealth is from the gilded age families who were mostly broken up by antitrust law for example. There are still a bunch with 5-15 billion in wealth but it's spread out among several hundred families with only a few of them still having real wealth (usually from a later generation descedent making wise business choices for themselves for a long time). They overwhelmingly give it away to charity, drink it, put it up their noise, waste it in other fashions and that's way better to me than the government ruining any incentive to try to become the next rockefeller or gates because it doesnt' involve coercion and confiscation by the government.

I think increasing antitrust enforcement and breaking up obviously monopolies/oligopolies is the actual thing we should be doing, it will b far better for society with far more immediate effect and without the outside profits from the private coercion that is an oligopoly it will alleviate some of that large profit you are complaining about being concentrated in a few hands.

> Your needs and wants are not a claim on my life. My life is my own. If you want to feed your money into whatever you define good as, go ahead. Dont expect anyone to cater to your whims with the fruits of their labors though.

This quote is interesting, as it supposes that you'll ever be in this position (and you may be. It's HN and I haven't opened your bio). Many people think the same way, which leads into my point:

A lot of policy failures arise from voters being wooed away from the certainty of a social safety net by the idea of obscene wealth. And therefore we end up overborrowing for infrastructure when we should be taxing based on how someone benefits from it.

> Everyone thinks they have a claim to goods and services they did not earn and hate people that earned them

Not everyone, only the people who recognize that the infrastructure that enabled someone's success still needs to be paid for, and that many of those who thrive on such underlying infrastructure refuse to pay for it.

I would like to discuss your phrase: "..voters being wooed away from the certainty of a social safety net by the idea of obscene wealth".

Your preference for "certainty" may not be the OP's preference. The leap from their comment to "the idea of obscene wealth" is also troubling. It is entirely possible to have different preferences, without implying that the person wants "obscene wealth".

To me, policy success would be that we get to make choices - whether they lead to us living modestly and having to deny our family opportunities that wealth might buy, or whether they lead to you living with the margins that allow you to provide your kids the leg up.

Nowhere in my comment did I imply that everyone thinks this way, or that op specifically thinks this way.

I turned a very middle class upbringing into a fortune in the low tens of millions. I'm not in software or a traditional HN industry, I just enjoy technology. I don't plan on leaving much of it to my children, but that is and should be my choice and my choice alone. That quote doesn't suppose I'll be in any position, it supposes I am an individual and should be free to make my own choices regardless of your position (self inflicted or otherwise). That you are in some real or perceived negative situation does not mean I should be obligated to help you. Whether I help you or not is my own decision.

That being said, because I enjoy helping people (and I enjoy the positive network effects of many policies indirectly) I am often willing and happy to help and/or pay taxes to provide services I don't get the full direct benefit of.

I don't think you are right about a lot of policy failures stemming from people misjudging their ability to make lots of money. I think many policy failures come from idiotic first principles driving ideas around maximizing social welfare without taking into account who is paying for those policies because policy that has no/minimal direct or indirect benefit to the tax payer will be something the tax payer actively tries to avoid and often that avoidance comes in shitty political forms that only partly avoids the bad spending while also negating most of the benefit to the people not paying the taxes.

Instead we should be making some reasonably conservative assumptions about what the benefit flow to each tax payer looks like, targeting a net positive benefit to every tax payer and maximizing social welfare along that indifference curve

> That you are in some real or perceived negative situation does not mean I should be obligated to help you. Whether I help you or not is my own decision.

Since it's a core belief of yours, you should keep voting that way, whereas I'll keep voting to make sure the social safety nets exist since fairness and successful bootstrapping are never guaranteed.

Your problem is you think you have the moral high ground on social safety net and you don't. I'm a fan of the social safety net, it just has to be way less idiotic than it is today. To have any interest in paying for it, it needs to have far greater returns to me while costing less. That means refocusing spending on metrics that more directly benefit the tax payer (more effectively keep my employees healthy, more effectively fire shite teachers and raise education standards, keep my streets safe, provide effective transportation for both my workers and my goods to market, remove stupid nimby BS actively making all these services cost more and be less effective, etc)

Also, your vote is utterly ineffective other than annoying one time relocation penalties if the burden of dealing with this country becomes too high (not to mention, if you are in the usa both your options are coopted by people not good for me or for you). It would be far better if instead of thinking legacy social contract thoughts you started thinking in marginal cost and benefit terms.

I think you're assuming more about my policy preferences than I've let on. This conversation isn't likely to be productive as a result.

Ok, what's your policy preferences? You sound like a social contract kind of guy, which I obviously don't agree with. I would be more of a Rawlsian for legal system fairness and coercion minimization for social service provision (basically attempting to provide services that provide enough network effect benefit to the tax payer that the only coercion of the tax payer is for free loading avoidance rather than coercing tax payers into paying for things that are actively bad for them or negative value at current cost of provision)

This attitude leads to the state of society today in the US.

Your life is your own if you're on a remote island somewhere, but as long as we're living with you, please don't replace a middle class family in the city with your dogs...

The essence of your argument is "I don't believe in the same moral values you do."

A lot of us would dispute that anyone that rich "earned" their money. $1bn is an absurdly disproportionate compensation for any one person's work, whatever they do. It may be legal, but it isn't right.

Did JK Rowling sell too many books? Should they have banned the purchase of Harry Potter books after her net worth hit $999mm?

What exactly is your policy prescription here.

Taxes

What kind of tax structure? 100% for all income over $1B?

If it wasn't totally impossible to implement, you could replace all taxes with low single digit percent per year service fee on your total assets for protecting them from criminals and foreign dictators. (Piketty invented that. It was tried, and didn't work out well for pragmatic reasons like jurisdiction shopping.)

The service fee would be set so that the return on capital was equal to the overall growth rate of the economy. Naturally, it's higher, which makes it mathematically inevitable for a few family offices to end up owning everything. (Also from Piketty.) If the risk-free rate was 3% this year and the GDP grew by 2%, your service fee would be 1%.

Alternatively/in addition, significant inheritance taxes for the ultra-rich.

A lot of wealth is multi-generational and nepotistic (i.e. do we really think Jim Walton would have got the job if he wasn't the son of the founder, and even if he did, would he have earned as much as he has?).

Inheritance taxes don't work in a world where one can jurisdiction shop/utilize multiple different trust and other setups. What inheritance tax does accomplish is keeping the newly rich from becoming multi generational while protecting the old wealth, which is the worst possible outcome. On top of that, to enforce them requires a level of privacy and personal liberty abuse that is counterproductive.

A better solution is much more effective antitrust enforcement through both breaking up monopolies/oligpolies and outlawing contract abuses by oligoplies as we see them (i.e. the myriad of things amazon puts in their seller contracts to ensure the prices elsewhere are always near amazon's price).

You asked the wrong question about Jim Walton. You should ask would Jim be able to pull off the same level of wealth accumulation if walmart had been broken up so that it could not have abused its market power for the last 30-40 years? Probably not, because he's probably not great at creating businesses people want to spend money at. You could say the same thing about guys like Bill gates (he would be worth at least 10X what he is currently worth if he had just kept his microsoft stock instead of diversifying bit by bit each year). When you look at it, it's almost always the market power abuse that is the problem, not the wealth per se (notable exception is Elon Musk, who has knocked it out of the park on multiple companies in starkly different fields, kind of impressive).

This is a false dichotomy - It's not one or the other, it's both and more.

It's the right question about Jim Walton, and there is a question about breaking up Walmart on top of that. Walmart can still be broken up in a world where inheritance tax exists!

> On top of that, to enforce them requires a level of privacy and personal liberty abuse that is counterproductive.

Disagree with this - forcing billionaires (or anybody for that matter) to provide details of their estate for tax purposes is pretty well-trodden territory.

It's not a false dichotomy, it's actually what happens because the newly rich are often earning their new riches in a way that is not easily hidden away in any of the myriad of legal structures that can hide income permanently from the high tax countries. The new guys will get their wealth eaten by your proposed policies but the old wealth will not, calcifying the system.

It is the wrong question about Jim Walton because it only matters if walmart is still the obvious oligopoly abuser it is. There is a huge difference between someone who managed to get big enough to abuse market power in one space and collected monopoly rents to amass a large fortune (The waltons, bill gates, etc.) and the guys who appear to be excellent managers and have grown massively society improving businesses in disparate industries (currently only Elon comes to mind, I am sure there are other but they are rare enough and/or have stuck to a single business that they grew large enough to extract excess profits that I can't think of any other semi proven names). The good managers you want to be as rich as possible because they are deploying that cash well, the other guys not so much. This translates into much more concern about the children of the super rich (which is correct) but to which you are trying to solve with an inheritance tax, which will just make things worse and slow growth. It's far better to break up the monopolies/oligopolies/regulate away the most obvious abusive contracting and let time do it's thing to get the junk offspring back to normal wealth levels.

You don't get it. Reporting requirements are quite invasive now and they aren't working. The level they will have to get to to actually make an inheritance tax work is a place that is far too much power for the government to have and won't end well (because that level of power has never ended well in the hands of the government). You are trying to solve a questionable problem (billionaires) by feeding an obvious, terrible, and literally deadly problem with massive historical precedent (government power).

If Walmart is broken up and Jim Walton is forced to divest, he will invest his money elsewhere and still own the means of production (capital) just in other companies.

It doesn’t solve the underlying issue of wealth distribution.

Of course it will, just not on a very quick (and destructive) timeline. He loses a monopoly abusing company and its excess profits which fed inflated salary and stock compensation for him personally and is instead left with taking the equivalent of the S&P 500 return or trying his hand at actually being a good manager and growing a company from small to large again or investing in early stage private stuff and experiencing the huge risk of that. If he's actually a good manager/ entrepreneur he can still grow his wealth starting something new, if he's not then he, or his kids, or his grand kids will eventually put enough of the wealth into failed company ideas, up their nose, in their veins, down their throats, into bad real estate, etc. that they cease being billionaires and have to get real jobs. This is the classic way wealth was dissipated. It's non violent, slow, but effective. most importantly it doesn't ruin the calculus on whether someone should strive to be a great entrepreneur or just keep their head down because they can be sure the government will steal it if they succeed.

I think we should aim to do better than fixing it across a 200-300 year timeline.

It’s not particularly ambitious.

We need to acknowledge that 'trickle down' is a myth, and that the'rich gets richer' phenomenon is much stronger. And that is a massive democratic problem, which will destabilise our societies.

For our democracies to survive we must put many different taxes in place to counter the rich get richer, and the perverce gathering of power it causes. There won't be a single policy to fix it, and actually finding a good compromise which helps growth instead of hindering it is hard (especially giving the constant lobbying from the rich).

Personally I am quite for a high inheritance tax, but it's definitely not enough. I have no problem with JK Rowling being rich. But I don't think it makes sence that she has a wealth 1000000 times what a teacher makes in their lifetime. And it certainly don't make sence that her child (if she has any) should receive a wealth that size.

> But I don't think it makes sence that she has a wealth 1000000 times what a teacher makes in their lifetime.

Why? What number do you think “makes sense”? Once you pick that number, do you think it’s correct when you compare it to a teacher’s income in the DRC?

"Thomas Piketty and Emmanuel Saez, for instance, find that once corporate and estate taxes are added into the mix, the top 0.1 percent of earners paid 71.4 percent of their income to the IRS in 1960, compared with 34.7 percent in 2004"

https://slate.com/business/2015/04/top-tax-rates-why-its-abs...

This is a cute myth, but it is not true. There are plenty of billionaires who inherited their wealth [0]. One thing to note is this list (as most wealth lists often do) focuses on USA billionaires whose wealth is largely from industry, and their children who inherited it; it does not include the more internationally observed phenomenon of children of royalty or similar heirs of great wealth.

[0] https://www.madisontrust.com/information-center/visualizatio...

Cool, yep, I'm also in favour of a 100% inheritance tax and abolishing monarchies.

Seconding this, stratospheric wealth is a side effect of long-standing race condition bugs in the way we generate and route value through society.

At some point there is absolutely no additional contribution made by one's own personal merits toward the amount of wealth that they generate, it's just a snowball effect with the same little pebble in the center of the ball that started it, sucking up and bashing through everything in its path.

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