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Top 1%? They have more wealth than ever and keep accumulating more and more while the differences in wealth between everybody else end the top class keep wideni

Top 1%? They have more wealth than ever and keep accumulating more and more while the differences in wealth between everybody else end the top class keep widening. Look at Warren Buffer, one of the best investors in the world and he has hundred billion dollars just sitting around as he sees no good investment opportunities. Apple & other companies are hoarding money as well, much faster than they can spend it or invest. Instead they are buying back there shares because what else to do with all that cash.

briandear 8y ago
What is Warren Buffet’s cash holdings? There’s a good chance they are in Treasuries or Money Market accounts which mean that money is being used by banks or the government to loan and invest. It isn’t like he has a room in his house filled with cash. The idea that cash is being hoarded is absurd. On deposit at a bank isn’t “hoarding” as the bank is able to make use of that capital to provide loans. Without the “rich” “hoarding” cash, banks have less capital which means it’s harder for you to get a car loan because the supply of money available to lend would be less. These class-warfare arguments are interesting because rarely do they actually include the benefits to the financial system. These arguments also make the assumption that governments are more efficient at spending money than individuals, a claim that just isn’t proven out by facts. Dead-weight loss is a real thing. Warren Buffet spending a dollar means a dollar goes into the economy. The the State of California spending a dollar means that perhaps $0.75 actually goes into the economy. What you seem to be arguing for is redistribution. But redistribution has deadweight losses as well as the unintended consequences of changing behavior. Perhaps a new business wouldn’t be started if taxation were at 75% — the reward wouldn’t be worth the risk, so the new economic activity from the new business wouldn’t happen at all — the associated jobs and tax revenue from that new venture would be zero. Individuals with a million dollars to create a business would create more than a million dollars in economic activity because they’d ostensibly be producing a product or a service which would result in more economic benefit than the taxable value of that million dollars. If government taxed that money at 100%, and just completely redistributed it, that would result in $1 million - x% actually reaching the economy because government doesn’t create any new value and in fact, it reduces value because of unavoidable deadweight loss. Not to mention government taxing that money at 100% means that money wouldn’t likely be earned in the first place — why even bother?
- gamblor956 8y ago
  Only responding to the last paragraph: The government created the computer and the internet...funds most major pharmaceutical, chemical, material sciences, and theoretical scientific research. The value created by the US government alone is estimated to be in the low hundreds of trillions and that's just measuring value created to this date. The reduction of friction created by government regulation is estimated to provide a value equal in many cases to 100% of the price of the transaction (as in, the transactions simply wouldn't happen without government regulation creating sufficient trust between the parties). Excessive taxation is a burden, but taxation in itself is not.

briandear 8y ago

What is Warren Buffet’s cash holdings? There’s a good chance they are in Treasuries or Money Market accounts which mean that money is being used by banks or the government to loan and invest. It isn’t like he has a room in his house filled with cash. The idea that cash is being hoarded is absurd. On deposit at a bank isn’t “hoarding” as the bank is able to make use of that capital to provide loans. Without the “rich” “hoarding” cash, banks have less capital which means it’s harder for you to get a car loan because the supply of money available to lend would be less. These class-warfare arguments are interesting because rarely do they actually include the benefits to the financial system. These arguments also make the assumption that governments are more efficient at spending money than individuals, a claim that just isn’t proven out by facts. Dead-weight loss is a real thing. Warren Buffet spending a dollar means a dollar goes into the economy. The the State of California spending a dollar means that perhaps $0.75 actually goes into the economy. What you seem to be arguing for is redistribution. But redistribution has deadweight losses as well as the unintended consequences of changing behavior. Perhaps a new business wouldn’t be started if taxation were at 75% — the reward wouldn’t be worth the risk, so the new economic activity from the new business wouldn’t happen at all — the associated jobs and tax revenue from that new venture would be zero. Individuals with a million dollars to create a business would create more than a million dollars in economic activity because they’d ostensibly be producing a product or a service which would result in more economic benefit than the taxable value of that million dollars. If government taxed that money at 100%, and just completely redistributed it, that would result in $1 million - x% actually reaching the economy because government doesn’t create any new value and in fact, it reduces value because of unavoidable deadweight loss. Not to mention government taxing that money at 100% means that money wouldn’t likely be earned in the first place — why even bother?

gamblor956 8y ago
Only responding to the last paragraph: The government created the computer and the internet...funds most major pharmaceutical, chemical, material sciences, and theoretical scientific research. The value created by the US government alone is estimated to be in the low hundreds of trillions and that's just measuring value created to this date. The reduction of friction created by government regulation is estimated to provide a value equal in many cases to 100% of the price of the transaction (as in, the transactions simply wouldn't happen without government regulation creating sufficient trust between the parties). Excessive taxation is a burden, but taxation in itself is not.