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> a supermajority of novel innovation comes from people at the bottom becoming rich, not the rich getting richer. Citation needed? As PG points out, most start

by mhaymo 11y ago

> a supermajority of novel innovation comes from people at the bottom becoming rich, not the rich getting richer. Citation needed? As PG points out, most startup founders are not poor. They take the risk of innovating not because they are desperate, but because they see a large upside. Reducing that upside will certainly reduce the motivation to innovate at the margins. The only question is how much does it reduce motivation, and do the benefits outweigh the costs?

zanny 11y ago
Poor is relative. We are talking about the difference between having a safety net at your parents house where they have a combined income of 300k and might have a cleaning maid every weekend versus a billionaire CEO with penthouses in four cities and his own airplane. One is middle class, the other is extremely rich.
- mhaymo 11y ago
  So the focus on "inequality" is a focus on large wealth at the expense of thinking about poverty, to the degree that you call 6-figure earners "people at the bottom". I'm still not convinced that a "supermajority" of innovation does not involve the very rich. Much innovation today comes from companies like Google, Apple, SpaceX, lead by very wealthy leaders. Even if you were right, the point remains that limiting the upside of risk-taking also reduces the incentives for middle-class people to innovate.
  - jcalvinowens 11y ago
    > Even if you were right, the point remains that limiting the upside of risk-taking also reduces the incentives for middle-class people to innovate. No, it doesn't: relative to middle-class net worth, hitting it big makes you orders of magnitude richer. Even if you taxed that level of wealth at 95%, it would still be absurdly rich compared to the mean.
  - quadrangle 11y ago
    You're confusing causation and correlation even if your premise is valid (which is totally questionable). First, Google and Apple have nothing to do with personal wealth, they are corporations. The fact that have lots of corporate wealth means they have resources to put into innovation. They can do that completely independently of whether they pay absurd salaries or stock-dividends. Corporations can profit off their activities and put the profits back into innovation, and when that happens they are business expenses that aren't even taxed!! So the entire issue about taxation of wealthy incomes is only about wealth that people take home as personal profit and do not reinvest in business. Now, let's accept the questionable premise that these people with high incomes produce the greatest innovation. That simply means that innovation correlates with high income. It does not tell us anything about cause. Maybe these are people who would be innovative no matter what and our system happens to reward that with riches. If that hypothesis holds, then higher taxes would have zero impact on their innovation. There's tons of evidence that innovative people are motivated in other ways besides getting richer, i.e. that the promise of further riches isn't the cause of their innovative work.
    - mhaymo 11y ago
      > First, Google and Apple have nothing to do with personal wealth, they are corporations. When Steve Jobs returned to Apple, he made it far more productive, and he was personally paid to do so. If his personal wealth was capped he may not have found it worthwhile to do this work that he was clearly exceptionally qualified for. > Maybe these are people who would be innovative no matter what and our system happens to reward that with riches. You can only believe this if you believe that people (or just "innovative people") are not even slightly motivated by money, which is clearly absurd. I certainly believe that people are motivated by many things besides money, however at the end of the day money is what gets you many of the things you want. I know that I personally am much happier to work hard when I know I will be amply rewarded.

by mhaymo 11y ago

zanny 11y ago

Poor is relative. We are talking about the difference between having a safety net at your parents house where they have a combined income of 300k and might have a cleaning maid every weekend versus a billionaire CEO with penthouses in four cities and his own airplane. One is middle class, the other is extremely rich.

mhaymo 11y ago
So the focus on "inequality" is a focus on large wealth at the expense of thinking about poverty, to the degree that you call 6-figure earners "people at the bottom". I'm still not convinced that a "supermajority" of innovation does not involve the very rich. Much innovation today comes from companies like Google, Apple, SpaceX, lead by very wealthy leaders. Even if you were right, the point remains that limiting the upside of risk-taking also reduces the incentives for middle-class people to innovate.
- jcalvinowens 11y ago
  > Even if you were right, the point remains that limiting the upside of risk-taking also reduces the incentives for middle-class people to innovate. No, it doesn't: relative to middle-class net worth, hitting it big makes you orders of magnitude richer. Even if you taxed that level of wealth at 95%, it would still be absurdly rich compared to the mean.
- quadrangle 11y ago
  You're confusing causation and correlation even if your premise is valid (which is totally questionable). First, Google and Apple have nothing to do with personal wealth, they are corporations. The fact that have lots of corporate wealth means they have resources to put into innovation. They can do that completely independently of whether they pay absurd salaries or stock-dividends. Corporations can profit off their activities and put the profits back into innovation, and when that happens they are business expenses that aren't even taxed!! So the entire issue about taxation of wealthy incomes is only about wealth that people take home as personal profit and do not reinvest in business. Now, let's accept the questionable premise that these people with high incomes produce the greatest innovation. That simply means that innovation correlates with high income. It does not tell us anything about cause. Maybe these are people who would be innovative no matter what and our system happens to reward that with riches. If that hypothesis holds, then higher taxes would have zero impact on their innovation. There's tons of evidence that innovative people are motivated in other ways besides getting richer, i.e. that the promise of further riches isn't the cause of their innovative work.
  - mhaymo 11y ago
    > First, Google and Apple have nothing to do with personal wealth, they are corporations. When Steve Jobs returned to Apple, he made it far more productive, and he was personally paid to do so. If his personal wealth was capped he may not have found it worthwhile to do this work that he was clearly exceptionally qualified for. > Maybe these are people who would be innovative no matter what and our system happens to reward that with riches. You can only believe this if you believe that people (or just "innovative people") are not even slightly motivated by money, which is clearly absurd. I certainly believe that people are motivated by many things besides money, however at the end of the day money is what gets you many of the things you want. I know that I personally am much happier to work hard when I know I will be amply rewarded.