7 ms·

The title and the tone of the OP are a bit inflammatory for my taste, but the data and graphs from the research paper are eye-opening: most economic growth in t

by cs702 9y ago

The title and the tone of the OP are a bit inflammatory for my taste, but the data and graphs from the research paper are eye-opening: most economic growth in the US over the past three decades has indeed gone to the top 1%, and particularly to the top 0.01%, leaving everyone else behind.[1] Here's the money shot: https://cdn.vox-cdn.com/uploads/chorus_asset/file/9013427/Screenshot_2017_08_08_12.34.47.png https://cdn.vox-cdn.com/uploads/chorus_asset/file/9013427/Sc... However, rather than debate the causes of this divergence, or accuse "the rich" of anything, we should instead be coming up with WORKABLE SOLUTIONS for increasing the income -- and therefore the spending power -- of the masses in a sustainable manner. I imagine a tremendous amount of pent-up consumer demand would be unleashed, because THE MORE THE MASSES EARN, THE MORE THEY SPEND ON PRODUCTS AND SERVICES, including those created by entrepreneurs. [1] Here's the paper: http://gabriel-zucman.eu/files/PSZ2017.pdf http://gabriel-zucman.eu/files/PSZ2017.pdf

Taek 9y ago
The core of the problem isn't any sort of tax setup, it's the foundation of our economy. The first employee of a startup usually gets less than 2% equity. Apple made $700k per employee in a single quarter. Our whole economy is set up to funnel money to the top. We need a new way of structuring corporations to change that.
- deegles 9y ago
  Or create a more widespread culture of stock ownership.
  - gehwartzen 9y ago
    This is the key. For an economic system based on capitalism we have surprisingly few 'real' capitalists. For the vast majority of people who own company equity it is tied up in retirement funds. Our system is designed to concentrate money in the hands of those that have it to begin with. As soon as more workers outside of startups start earning equity in the companies they work for we will see the income distribution change. And I suspect we would see a massive boom in worker productivity as they directly realize the financial gains. "In terms of types of financial wealth, in 2013 the top one percent of households had 49.8% of all privately held stock, 54.7% of financial securities, and 62.8% of business equity. The top ten percent had 84% to 94% of stocks, bonds, trust funds, and business equity, and almost 80% of non-home real estate."
sjg007 9y ago
Raise taxes on the 0.01%, it's the only way.
- sysdyne 9y ago
  But you cannot do that!! I'm part of those who will get to be the 0.01%!! How could you take away my money that I will purposely wrote in my check from the monopoly that I will own with my company.
  - arkitaip 9y ago
    You sound like you need some Toffifee or Werther's original.
    - deleted 9y ago
      [deleted]
- prostoalex 9y ago
  Most of them derive annual income via capital gains, and it's pretty much a voluntary tax. One either borrows against the asset, so zero selling occurs, or harvests some tax losses from other assets before they execute a sale on an appreciated asset.
  - VHRanger 9y ago
    You can impose a consumption tax
manicdee 9y ago
For every problem there is a solution which is simple, elegant, and completely wrong. So here's my attempt: 1. Remove subsidies including tax writeoffs like depreciation. Either an asset brings value or it doesn't. 2. Tax revenue not profits. Either you make a profit selling a thing or you don't. Fancy tricks like buying an item from a fully owned subsidiary and selling it at a loss to compensate for profits from services is not realising the value your services and products bring to the economy 3. Change the paradigm from employees serve the company to companies serve the employees. Companies are a way to insulate participants from economic risk of a capital-intensive activity, not a way to structure tax affairs. Edited for formatting
- seanmcdirmid 9y ago
  > Tax revenue not profits. Either you make a profit selling a thing or you don't. Fancy tricks like buying an item from a fully owned subsidiary and selling it at a loss to compensate for profits from services is not realising the value your services and products bring to the economy You mean, make Apple a Chinese company because being an American one is no longer viable? A VAT would be more reasonable, as it taxes value actually added at each point in the system, rather than a flat tax on each point in the system as you are proposing.
  - british_india 9y ago
    No, stop permitting companies to give their IP to a foreign subsidiary to pay license fees that wipeout their domestic US taxable income
    - seanmcdirmid 9y ago
      You mean, they should just develop their IP abroad then? Microsoft has a lot of R&D centers in china already, other companies are following suit. Also, please say that you mean American companies, you obviously don't mean companies like SAP or infosys that the American companies compete with.
- loserboss 9y ago
prostoalex 9y ago
Current government policies penalize income (39.6% at the top bracket) and subsidize company-sponsored non-monetary benefits (health, dental, vision, meals, commuter benefits, ESPP, 401k matching, ISOs, NSOs), so not all that surprising that workers see less income and more of non-monetary benefits as a result. The workable solution through a tax policy might include reducing the number of brackets for personal income tax, dropping personal income tax rates within those brackets, and removing deductibility of all aforementioned corporate benefits as a trade-off. I don't see a wave of pent-up consumer demand though, as cheap and easy credit de-couples spending and earning. A lot of economists predicted boost in consumer spending as oil (and gas) prices fell over the past few years, but in reality all that spending had already taken place years before, and consumers simply used gas savings to deleverage their credit accounts. Household debt is peaking again https://www.nytimes.com/2017/05/17/business/dealbook/household-debt-united-states.html https://www.nytimes.com/2017/05/17/business/dealbook/househo... so any additional savings or boosts in earnings will likely go towards deleveraging.
- skybrian 9y ago
  It seems likely that consumer confidence has a lot to do with willingness to take on debt? So the liming factor wouldn't be availability of credit, it's what payments you think you'll be able to afford later. In the case of student loans, that amounts to confidence in being able to find a good job to pay them off.
- deleted 9y ago
  [deleted]
- AstralStorm 9y ago
  The thing is that the richest could easily have 90% income garnished without even moving this chart one bit.
  - prostoalex 9y ago
    I think you are confusing the wealth (the richest) and the high-income individuals. Membership in the first club is more or less permanent, while the second club has a revolving door. A bunch of members of the high-income club - employees of a high-tech startup, hedge fund managers, movie producers, inventors, lottery winners, wrongfully imprisoned individuals, victims of malfeasance or drug side effects - get one large paycheck once in their life, representing sometimes decades of work at below-market rates. They won't have another Powerball jackpot, court settlement or a startup IPO next year.
tmnvix 9y ago
We should be taxing productive activity less and income earned through simply owning things more. The balance has moved too far in the opposite direction.
- sooheon 9y ago
  I agree, and so do many economists: https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism The distinction is that mere ownership of capital, especially common goods (such as land and natural resources) excludes other members of society from access to that resource. It does not create value, but merely holds claim to existing value, seeking rent for allowing others access to it. This should be taxed. OTOH, productive activity takes that capital, adds labor and ingenuity, and creates goods or services which benefit society--such activity should be taxed less, or not at all.
  - WalterBright 9y ago
    I'd go further and tax destructive activities, such as polluting or consumption of finite resources, instead of productive activities.
    - jaggederest 9y ago
      This is why I'm disappointed with the current-era Republican party. There are so many things that could be solved with true market-based solutions - for example, carbon markets and other major externalities. But nearly everyone would rather ignore evidence-based solutions for ideologically correct ones.
- abhi3 9y ago
  Allocating ones capital (simply owning things as you say) is a productive activity in itself. Without people competing to allocate capital for higher returns, a lot of things we all love wouldn't exist.
  - sooheon 9y ago
WhitneyLand 9y ago
Why should we be looking for solutions? To be clear I would agree it's intuitively disturbing and seems "not fair". But do you call for solutions because: 1) There might be a way to have higher productivity than we have now. This can't be why, it's always a goal regardless right? 2) Strategies should be considered than intentionally reduce productivity and/economic growth in order to increase worker compensation. Now things get tricky - productivity helps everyone, it makes the things we buy cheap, it boosts our standard of living. Is such a strategy even feasible? 3) There might exist some kind of goldilocks plan whereby growth and productivity are not affected, yet average compensation grows substantially. Again, kind of gets into uncharted economic waters no? 4) It wouldn't be about economics. It's just about fairness, morality, and maybe the self-interested prevention of civil unrest. It's policy not to change economics, but to change politics, who gets what, move things around, etc. I don't doubt there are some all around good win-win ideas that could be implemented, but as a category it doesn't seem full enough to be game changing.
- sooheon 9y ago
  Why not? If the state of affairs is disturbing and unjust, should the disenfranchised not seek to improve their lot? It may be easy to sit on top of the busily productive pile and insinuate that those on the bottom be satisfied with the scraps ("...those at the bottom get bigger scraps than they otherwise would have", etc.). But it's much more palatable and interesting for me to seek out how to remedy injustices (as I perceive them, I can't claim to be objective about this), to "quantum tunnel" out of this extreme gravitational well of inequality, so to speak.
  - WhitneyLand 9y ago
    It almost makes me want to puke to think I wrote words that caused someone to think I would like to "sit on top...[while] those on the bottom [get] scraps". This is the opposite of what I believe. The point is, everyone wants to charge forward without thinking about what are the solutions that will really work. This is a problem of economics and politics. The more that this problem can be solved by best economic evidence and theory (apolitical), the better. A solution based purely on politics gets progressively worse, all the way down to the level or torches and pitchforks. I listed a few economic issues I see (as a lay person) that if answered could start thinking towards something that ends well. Shall we consider those, or shall we head to straight to the pitchforks?
WalterBright 9y ago
> would be unleashed That's the theory that the rich hoard their money in Scrooge McDuck cash vaults, keeping it out of the economy. That's false - all of it is in the economy, via investments. Even money kept in a checking account is invested in the economy (banks loan out that money). The only cash kept in cash vaults is the reserve that the government requires banks to keep to provide a buffer against runs on the bank. Various times in history people have "liberated" wealth from wealthy people, and it never stimulated the economy (quite the reverse), because the wealth was already in the economy.
- chrisgd 9y ago
  Loans create deposits. Banks are not constrained to make loans based on how much is on deposit.
  - WalterBright 9y ago
    > Loans create deposits Initially, yes. But people borrow money in order to spend it, not leave it on deposit. > not constrained That's right, just as airlines are not constrained to keep their airplanes flying payloads. But if they don't, they are not making money. Every time you step in a bank, they try to sell you a loan for a reason.
- WalterBright 9y ago
  There's a good explanation in the movie "It's A Wonderful Life" about what happens to the money deposited in a bank, and where it goes.
- MrBingley 9y ago
  What about the Panama Papers?
- cs702 9y ago
  > ...the rich hoard their money in Scrooge McDuck cash vaults, keeping it out of the economy. I did NOT say that. Please don't attack a straw man! > All of it is in the economy, via investments. Even money kept in a checking account is invested in the economy (banks loan out that money). It's a little more complicated than that. Since the Global Financial Crisis, many central banks around the world, including the Federal Reserve, have been doing EVERYTHING and ANYTHING they can to get banks to lend more, and to get businesses and individuals to borrow more and invest more. Yet no matter what central banks have tried, individuals and businesses are not yet investing at historical rates, as evidenced by historically high liquidity[1], historically low money velocity[2], and even negative nominal interest rates in some countries[3], which are historically unique.[4] Keynes's argument that depressionary depressions/recessions may be caused by increased 'preference' for liquidity and lack of aggregate demand could actually be right, for all I know. Meanwhile, the evidence I've seen suggests that redistributionist policies don't seem to have an impact on economic growth. For example, see: http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf So, why not try it, e.g., in the form of UBI or works programs, say, in controlled regional experiments? If it turns out that it works, great; if it doesn't work, then let's try something else. NOTES: [1] https://fred.stlouisfed.org/series/AMBNS https://fred.stlouisfed.org/series/AMBNS -- look at that jump in 2008! [2] https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V [3] Example: https://www.reuters.com/article/us-snb-results-banks-idUSKBN1AG0P9 https://www.reuters.com/article/us-snb-results-banks-idUSKBN... [4] http://www.businessinsider.com/chart-5000-years-of-interest-rates-history-2016-6 http://www.businessinsider.com/chart-5000-years-of-interest-...
JamesBarney 9y ago
The cause matters because it tells us what the workable solutions are. For instance say a company's CEO was the only person who got a raise for 30 years. One possibility is the CEO was a real go getter who kept getting better and more valuable at his job and while everyone else stagnated. The other possibility is that the CEO locked all of his employees into non-competes, keeping their salaries low, and freeing up budget to write himself large bonuses. Obviously these two situations aren't going to be solved by the same solution.
- AstralStorm 9y ago
  Both are solved with making marginal gains tax hyperregressive. Said CEO would gain little in either case on his salary. (Making it gains also closes loopholes like getting buildings, deals, land, expensive cars or such.) Regardless of whether he bargained for it or squashed the employees, someone paid for this gain. With increased productivity they didn't benefit from or with plain old loss. It probably really is the only way to prevent rich from getting much richer than everyone else and taking it all.
  - JamesBarney 9y ago
    Do you mean hyper progressive? A regressive tax is on that taxes the rich less than the poor like cigarettes.
JamesBarney 9y ago
The cause matters because it tells us what the workable solution are. For instance say a company's CEO was the only person who got a raise for 30 years. One possibility is the CEO was a real go getter who kept getting better and more valuable at his job and while everyone else stagnated. The other possibility is that the CEO locked all of his employees into non-competes, keeping their salaries low, and freeing up budget to write himself large bonuses. Obviously these two situations aren't going to be solved by the same solution.
JamesBarney 9y ago
The cause matters because it tells us what the workable solution are. For instance say a company's CEO was the only person who got a raise for 30 years. One possibility is the CEO was a real go getter who kept getting better and more valuable at his job and while everyone else stagnated. The other possibility is that the CEO locked all of his employees into non-competes, keeping their salaries low, and freeing up budget to write himself large bonuses. Obviously these two situations aren't going to be solved by the same solution.
karimei 9y ago
This graphic is interesting, thought it might be instructive to calculate accumulated values: For the median (50% percentile): 1.005**36 = 1.2 P99: 1.022**36 = 2.2 P99.9: 1.032**36 = 3.1 P99.99: 1.043**36 = 4.6 P99.999: 1.06**36 = 8.1 It would be interesting to see absolute numbers. I remember vaguely that the productivty increased by a factor 8 since the eighties...

by cs702 9y ago

Taek 9y ago

The core of the problem isn't any sort of tax setup, it's the foundation of our economy. The first employee of a startup usually gets less than 2% equity. Apple made $700k per employee in a single quarter. Our whole economy is set up to funnel money to the top. We need a new way of structuring corporations to change that.

deegles 9y ago
Or create a more widespread culture of stock ownership.
- gehwartzen 9y ago
  This is the key. For an economic system based on capitalism we have surprisingly few 'real' capitalists. For the vast majority of people who own company equity it is tied up in retirement funds. Our system is designed to concentrate money in the hands of those that have it to begin with. As soon as more workers outside of startups start earning equity in the companies they work for we will see the income distribution change. And I suspect we would see a massive boom in worker productivity as they directly realize the financial gains. "In terms of types of financial wealth, in 2013 the top one percent of households had 49.8% of all privately held stock, 54.7% of financial securities, and 62.8% of business equity. The top ten percent had 84% to 94% of stocks, bonds, trust funds, and business equity, and almost 80% of non-home real estate."

sjg007 9y ago

Raise taxes on the 0.01%, it's the only way.

sysdyne 9y ago
But you cannot do that!! I'm part of those who will get to be the 0.01%!! How could you take away my money that I will purposely wrote in my check from the monopoly that I will own with my company.
- arkitaip 9y ago
  You sound like you need some Toffifee or Werther's original.
  - deleted 9y ago
    [deleted]
prostoalex 9y ago
Most of them derive annual income via capital gains, and it's pretty much a voluntary tax. One either borrows against the asset, so zero selling occurs, or harvests some tax losses from other assets before they execute a sale on an appreciated asset.
- VHRanger 9y ago
  You can impose a consumption tax

manicdee 9y ago

For every problem there is a solution which is simple, elegant, and completely wrong. So here's my attempt: 1. Remove subsidies including tax writeoffs like depreciation. Either an asset brings value or it doesn't. 2. Tax revenue not profits. Either you make a profit selling a thing or you don't. Fancy tricks like buying an item from a fully owned subsidiary and selling it at a loss to compensate for profits from services is not realising the value your services and products bring to the economy 3. Change the paradigm from employees serve the company to companies serve the employees. Companies are a way to insulate participants from economic risk of a capital-intensive activity, not a way to structure tax affairs. Edited for formatting

seanmcdirmid 9y ago
> Tax revenue not profits. Either you make a profit selling a thing or you don't. Fancy tricks like buying an item from a fully owned subsidiary and selling it at a loss to compensate for profits from services is not realising the value your services and products bring to the economy You mean, make Apple a Chinese company because being an American one is no longer viable? A VAT would be more reasonable, as it taxes value actually added at each point in the system, rather than a flat tax on each point in the system as you are proposing.
- british_india 9y ago
  No, stop permitting companies to give their IP to a foreign subsidiary to pay license fees that wipeout their domestic US taxable income
  - seanmcdirmid 9y ago
    You mean, they should just develop their IP abroad then? Microsoft has a lot of R&D centers in china already, other companies are following suit. Also, please say that you mean American companies, you obviously don't mean companies like SAP or infosys that the American companies compete with.
loserboss 9y ago

prostoalex 9y ago

Current government policies penalize income (39.6% at the top bracket) and subsidize company-sponsored non-monetary benefits (health, dental, vision, meals, commuter benefits, ESPP, 401k matching, ISOs, NSOs), so not all that surprising that workers see less income and more of non-monetary benefits as a result. The workable solution through a tax policy might include reducing the number of brackets for personal income tax, dropping personal income tax rates within those brackets, and removing deductibility of all aforementioned corporate benefits as a trade-off. I don't see a wave of pent-up consumer demand though, as cheap and easy credit de-couples spending and earning. A lot of economists predicted boost in consumer spending as oil (and gas) prices fell over the past few years, but in reality all that spending had already taken place years before, and consumers simply used gas savings to deleverage their credit accounts. Household debt is peaking again https://www.nytimes.com/2017/05/17/business/dealbook/household-debt-united-states.html https://www.nytimes.com/2017/05/17/business/dealbook/househo... so any additional savings or boosts in earnings will likely go towards deleveraging.

skybrian 9y ago
It seems likely that consumer confidence has a lot to do with willingness to take on debt? So the liming factor wouldn't be availability of credit, it's what payments you think you'll be able to afford later. In the case of student loans, that amounts to confidence in being able to find a good job to pay them off.
deleted 9y ago
[deleted]
AstralStorm 9y ago
The thing is that the richest could easily have 90% income garnished without even moving this chart one bit.
- prostoalex 9y ago
  I think you are confusing the wealth (the richest) and the high-income individuals. Membership in the first club is more or less permanent, while the second club has a revolving door. A bunch of members of the high-income club - employees of a high-tech startup, hedge fund managers, movie producers, inventors, lottery winners, wrongfully imprisoned individuals, victims of malfeasance or drug side effects - get one large paycheck once in their life, representing sometimes decades of work at below-market rates. They won't have another Powerball jackpot, court settlement or a startup IPO next year.

tmnvix 9y ago

We should be taxing productive activity less and income earned through simply owning things more. The balance has moved too far in the opposite direction.

sooheon 9y ago
I agree, and so do many economists: https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism The distinction is that mere ownership of capital, especially common goods (such as land and natural resources) excludes other members of society from access to that resource. It does not create value, but merely holds claim to existing value, seeking rent for allowing others access to it. This should be taxed. OTOH, productive activity takes that capital, adds labor and ingenuity, and creates goods or services which benefit society--such activity should be taxed less, or not at all.
- WalterBright 9y ago
  I'd go further and tax destructive activities, such as polluting or consumption of finite resources, instead of productive activities.
  - jaggederest 9y ago
    This is why I'm disappointed with the current-era Republican party. There are so many things that could be solved with true market-based solutions - for example, carbon markets and other major externalities. But nearly everyone would rather ignore evidence-based solutions for ideologically correct ones.
abhi3 9y ago
Allocating ones capital (simply owning things as you say) is a productive activity in itself. Without people competing to allocate capital for higher returns, a lot of things we all love wouldn't exist.
- sooheon 9y ago

WhitneyLand 9y ago

Why should we be looking for solutions? To be clear I would agree it's intuitively disturbing and seems "not fair". But do you call for solutions because: 1) There might be a way to have higher productivity than we have now. This can't be why, it's always a goal regardless right? 2) Strategies should be considered than intentionally reduce productivity and/economic growth in order to increase worker compensation. Now things get tricky - productivity helps everyone, it makes the things we buy cheap, it boosts our standard of living. Is such a strategy even feasible? 3) There might exist some kind of goldilocks plan whereby growth and productivity are not affected, yet average compensation grows substantially. Again, kind of gets into uncharted economic waters no? 4) It wouldn't be about economics. It's just about fairness, morality, and maybe the self-interested prevention of civil unrest. It's policy not to change economics, but to change politics, who gets what, move things around, etc. I don't doubt there are some all around good win-win ideas that could be implemented, but as a category it doesn't seem full enough to be game changing.

sooheon 9y ago
Why not? If the state of affairs is disturbing and unjust, should the disenfranchised not seek to improve their lot? It may be easy to sit on top of the busily productive pile and insinuate that those on the bottom be satisfied with the scraps ("...those at the bottom get bigger scraps than they otherwise would have", etc.). But it's much more palatable and interesting for me to seek out how to remedy injustices (as I perceive them, I can't claim to be objective about this), to "quantum tunnel" out of this extreme gravitational well of inequality, so to speak.
- WhitneyLand 9y ago
  It almost makes me want to puke to think I wrote words that caused someone to think I would like to "sit on top...[while] those on the bottom [get] scraps". This is the opposite of what I believe. The point is, everyone wants to charge forward without thinking about what are the solutions that will really work. This is a problem of economics and politics. The more that this problem can be solved by best economic evidence and theory (apolitical), the better. A solution based purely on politics gets progressively worse, all the way down to the level or torches and pitchforks. I listed a few economic issues I see (as a lay person) that if answered could start thinking towards something that ends well. Shall we consider those, or shall we head to straight to the pitchforks?

WalterBright 9y ago

> would be unleashed That's the theory that the rich hoard their money in Scrooge McDuck cash vaults, keeping it out of the economy. That's false - all of it is in the economy, via investments. Even money kept in a checking account is invested in the economy (banks loan out that money). The only cash kept in cash vaults is the reserve that the government requires banks to keep to provide a buffer against runs on the bank. Various times in history people have "liberated" wealth from wealthy people, and it never stimulated the economy (quite the reverse), because the wealth was already in the economy.

chrisgd 9y ago
Loans create deposits. Banks are not constrained to make loans based on how much is on deposit.
- WalterBright 9y ago
  > Loans create deposits Initially, yes. But people borrow money in order to spend it, not leave it on deposit. > not constrained That's right, just as airlines are not constrained to keep their airplanes flying payloads. But if they don't, they are not making money. Every time you step in a bank, they try to sell you a loan for a reason.
WalterBright 9y ago
There's a good explanation in the movie "It's A Wonderful Life" about what happens to the money deposited in a bank, and where it goes.
MrBingley 9y ago
What about the Panama Papers?
cs702 9y ago
> ...the rich hoard their money in Scrooge McDuck cash vaults, keeping it out of the economy. I did NOT say that. Please don't attack a straw man! > All of it is in the economy, via investments. Even money kept in a checking account is invested in the economy (banks loan out that money). It's a little more complicated than that. Since the Global Financial Crisis, many central banks around the world, including the Federal Reserve, have been doing EVERYTHING and ANYTHING they can to get banks to lend more, and to get businesses and individuals to borrow more and invest more. Yet no matter what central banks have tried, individuals and businesses are not yet investing at historical rates, as evidenced by historically high liquidity[1], historically low money velocity[2], and even negative nominal interest rates in some countries[3], which are historically unique.[4] Keynes's argument that depressionary depressions/recessions may be caused by increased 'preference' for liquidity and lack of aggregate demand could actually be right, for all I know. Meanwhile, the evidence I've seen suggests that redistributionist policies don't seem to have an impact on economic growth. For example, see: http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf So, why not try it, e.g., in the form of UBI or works programs, say, in controlled regional experiments? If it turns out that it works, great; if it doesn't work, then let's try something else. NOTES: [1] https://fred.stlouisfed.org/series/AMBNS https://fred.stlouisfed.org/series/AMBNS -- look at that jump in 2008! [2] https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V [3] Example: https://www.reuters.com/article/us-snb-results-banks-idUSKBN1AG0P9 https://www.reuters.com/article/us-snb-results-banks-idUSKBN... [4] http://www.businessinsider.com/chart-5000-years-of-interest-rates-history-2016-6 http://www.businessinsider.com/chart-5000-years-of-interest-...

JamesBarney 9y ago

The cause matters because it tells us what the workable solutions are. For instance say a company's CEO was the only person who got a raise for 30 years. One possibility is the CEO was a real go getter who kept getting better and more valuable at his job and while everyone else stagnated. The other possibility is that the CEO locked all of his employees into non-competes, keeping their salaries low, and freeing up budget to write himself large bonuses. Obviously these two situations aren't going to be solved by the same solution.

AstralStorm 9y ago
Both are solved with making marginal gains tax hyperregressive. Said CEO would gain little in either case on his salary. (Making it gains also closes loopholes like getting buildings, deals, land, expensive cars or such.) Regardless of whether he bargained for it or squashed the employees, someone paid for this gain. With increased productivity they didn't benefit from or with plain old loss. It probably really is the only way to prevent rich from getting much richer than everyone else and taking it all.
- JamesBarney 9y ago
  Do you mean hyper progressive? A regressive tax is on that taxes the rich less than the poor like cigarettes.

JamesBarney 9y ago

The cause matters because it tells us what the workable solution are. For instance say a company's CEO was the only person who got a raise for 30 years. One possibility is the CEO was a real go getter who kept getting better and more valuable at his job and while everyone else stagnated. The other possibility is that the CEO locked all of his employees into non-competes, keeping their salaries low, and freeing up budget to write himself large bonuses. Obviously these two situations aren't going to be solved by the same solution.

JamesBarney 9y ago

karimei 9y ago

This graphic is interesting, thought it might be instructive to calculate accumulated values: For the median (50% percentile): 1.005**36 = 1.2 P99: 1.022**36 = 2.2 P99.9: 1.032**36 = 3.1 P99.99: 1.043**36 = 4.6 P99.999: 1.06**36 = 8.1 It would be interesting to see absolute numbers. I remember vaguely that the productivty increased by a factor 8 since the eighties...