Comment by numba888 | Hacker News Reader

Comment by numba888 | Hacker News Reader

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> You have no clue about the collapse of the USSR.

I lived through it. We can talk a lot about, but the fact is equality doesn't work. Maximum it gets to is everyone equally poor. And as a result of it there are no startups. You need middle class for this and motivation. Government controlled and own monopolies is also the result of equality. Nobody else has the resources. So commies had to create the economy, few bigger things are easier to manage. Managers aren't interested in risk taking, it's not worth it. Finally everything stalled and fell far behind the rest of the world. There were bright spots, but that's it. Like North Korea today can build missiles and not much else.

Just look around. Probably only Cuba and North Korea are still in true socialism. In both there is a small super-rich class and the rest is, yes, equally poor. Super-rich are pretending to be poor too and invent theories to keep the rest under control. BTW, I'm not sure Cuba still has strong ideology today.

Just as a factual matter I think everyone can agree with these three statements:

The USSR didn’t actually have economic equality.

The US has drastically lower tax rates for capital gains.

Finally, arguing for equal taxation isn’t arguing for equal pay.

As to my actual argument, I’m saying economic growth is slowed through the economic inefficiency resulting from unequal taxation. The point of economics is to make goods and services people want and capitalism achieves this through investments and exchanges of money. But distorting that feedback loop through taxes unequal taxes on individuals or companies is a distortion. Invest in the wrong things and economic growth stalls.

> The USSR didn’t actually have economic equality.

More or less it had. Except for privileged commie bosses everyone poor. "Rich" had cars (!) Having noticeable business was prohibited. Selling own potatoes on flea market, or growing chicken and pigs was fine.

> The US has drastically lower tax rates for capital gains.

In Mass. it's 10% to begin with.

> I’m saying economic growth is slowed through the economic inefficiency resulting from unequal taxation.

Not sure about this. Do you have examples when equal taxation helps?

> Except for privileged commie bosses everyone poor.

By modern standards dirt poor, but by historic standards it becomes more nuanced economically if not socially. Most of the world was just shockingly poor until very recently.

As to equality the economy isn’t just the legal economy. A cop accepts a bribe is making more than a clean cop and greasing the wheels of bureaucracy was really common as was a rather extensive black market fed by production being diverted etc. It’s quite consistent how effectively people learn to leverage what they have to get what they want.

> Do you have examples where equal taxation helps.

You can look at tax rates vs long term GDP growth and see trends but economic growth isn’t clear cut. The best example is cases where tax breaks for the wealthy has been harmful is the UK which is still doing alright but had massive advantages from it’s early industrialization and colonies that it quite effectively squandered.

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