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It's the concentration of wealth causing this as the economy is being bled dry. the fix is to restore the progressive tax code, income in excess of $5M/yr taxed

It's the concentration of wealth causing this as the economy is being bled dry. the fix is to restore the progressive tax code, income in excess of $5M/yr taxed at 99%. not rocket science, but nearly impossible because politics, so get used to being poor America. currently half of jobs in usa pay less than $18/hr. only going to get worse unless the root cause is addressed.

CNJ7654 8y ago
This just in! Most major businesses moving outside of the US pending radical tax code reform!
- matthewwiese 8y ago
  Your comment was dead but I thought I may as well vouch it. Although you wrote your point in a snarky tone, taking large corporations into account when discussing this topic seems at least halfway in good faith. FWIW I too am a jobless Millennial at the moment, so it's not like I am playing devil's advocate because of a nefarious hidden agenda. EDIT: Spelling.
kindarooster 8y ago
I wish I heard this view on taxes more often. Have a nice smooth tax curve up to like 95% at some income level (5 or 10 M). The rich are not taxed anywhere close to enough.
- rich-and-poor 8y ago
  If someone figures out how to make 5M/year of income, I am absolutely certain they are better at capital allocation than the current administration. You are suggesting that they are not, and that we need to have the state decide where the money of the top earners go. I'm sorry, but we have tried that before. It does not end well.
  - spruciefic399 8y ago
    I think the problem with that argument is that the reasons an individual might be good allocating their own capital are distinct from the reasons they have capital, or what is justified, in the sense of ethical or societally defensible. A successful white-collar criminal can be said to be good at capital allocation, to make an extreme example. My argument is not that wealth means someone is criminal (although I do think criminality has as a goal wealth rather than poverty, which is the inverse but relevant). However I do think there are lots of hidden costs that people advertently or inadvertently manage to get out of paying for, and taxes are meant to recognize that fact. The bailouts of the great recession are good examples of this to me in some sense. The government saved certain businesses, or ameliorated their crash. Whether or not this was the right decision is one thing, but given that they did get bailouts (or outs), suggests that what we should expect is taxes and regulation to support these kinds of things. There are lots of other things like this that conveniently get glossed over, like hidden environmental costs, education and infrastructure, research, etc. I find it incredibly manipulative, for example, for arguments to be made against net neutrality on the grounds that telecom companies somehow bootstrapped their way up from nothing, when the internet itself was a government invention, and much of their infrastructure is made possible by public right-of-way laws or other privileges given by municipalities. I think the fundamental problem with US society today is an extreme form of survivorship or fundamental attribution bias, where we grossly overattribute success to individual characteristics and not other factors. Then we get locked into these strawman debates that pit extreme capitalism against communism, as if there's no moderated grey area, that our only choices are complete equality of wages etc. or winner-takes all gross inequality. What I increasingly see in the US are the haves and the have nots, and I no longer believe that the haves, by in the large, deserve what they have in a way that the have nots do not. Income inequality, to me, is bad not just because of the disparity itself, but because it tends to exaggerate market errors in valuation. We tend to have these conversations and HN and elsewhere where we look at these examples of downward mobility and point to everything someone did wrong, but then do not turn to management, administration, business, etc. and ask "did they really do everything right"? We also tend to act as if, if they really made an error, that is really worth the downward mobility they accrued.
  - Harvey-Specter 8y ago
- gok 8y ago
  A 95% tax on incomes over $5M/year would raise about $100B per year in the US. That would be about a 3% increase in total federal revenue. Even if that were directly redistributed, every American would get a $400 check. It would not affect income inequality measurably.
tjr225 8y ago
I think the pendulum is bound to swing that way...hopefully sooner rather than later.
- rich-and-poor 8y ago
  Hopefully sooner? I think, hopefully never. As soon as you take the money away from the geniuses, the insanely industrious businessmen, and allow the lame bureaucrats and politicians to decide where it goes, then you destroy a generation: No more will angsty, thirsty, motivated young bloods work 20 hour days for a decade to build a business.
  - profunctor 8y ago
    That didn't happen under Eisenhower when the top tax rate was 92%. Although I think its not a 92% income tax that is needed but a high tax on capital.
    - rich-and-poor 8y ago
      Fair enough, I think given the replies I've received that I need to learn more about tax rates and growth; since I've already started the conversation with you do you have any suggestions on how I should understand this topic better?
    - mikestew 8y ago
      "And what happened next, Grandpa? Did such oppressive tax rates stem economic growth?" "My boy, not at all! What followed was one of the most prosperous times in the country!" I'm not saying correlation, causation, blah, blah, blah. But such rates not only didn't "destroy a generation", it's a time many look back to fondly (in which case they're probably white and male).
  - evilduck 8y ago
    Haven't we _already_ destroyed a generation with your template?
rich-and-poor 8y ago
EDIT: I rewrote this comment because I thought it was too combative, and not with the guidelines. So. I think that the idea that we should tax the high earners of their entire income is a very bad idea! Would it not destroy the motivation of those top earners to work hard, to keep innovating, and to strive for success? It also makes the assumption that, should we take the income away from the top earners, that the state will do a better job at putting that money back into the economy. I think that assumption is incorrect. A person who has figured out how to make 5M a year, whether it's through advertising or a manufactured product, is probably better at capital allocation than a bureaucrat or politician. You also mention that "the root cause needs to be addressed." Unfortunately, we don't know what the root cause of wealth inequality is, and all historical attempts at "fixing the root cause" with wealth redistribution have ended in catastrophe; we really do need to remember that because your comment is quite similar to Marx's famous quote "From each according to his ability, to each according to his needs". In fact, unequal distribution of resources is a natural law, called the Pareto Principal, and it is everywhere: The height of trees, number of progeny of chimps, number of players that win Monopoly in a given game... Inequality is not an evil force, it is a natural force that has been fought historically at the great peril of the populations that decided to fight it. Now, perhaps there is some variation of this progressive tax law that encourages investment. Perhaps that is even suggested in your comment. I would be open to something that allowed people to have 5M/year in income, but above that, they were heavily incentivized to invest.
- munificent 8y ago
  > taking all the money from the businessmen that are most effective will demolish what is left of the economy, overnight. Do you have any data showing that top marginal rate negatively correlates to economic growth? I'm looking at the charts right now and, if anything, a high marginal rate appears to lead to greater growth.
  - rich-and-poor 8y ago
    Can you show me the charts?
gok 8y ago
Extremely progressive taxation isn't effective. The very rich have ways of hiding or deferring income. There's also the problem that there simply isn't very much money at that level. Just to put it into perspective, the top 1% of tax payers only had an AGI of about $2 trillion. Let me get even more extreme than what you propose. If you taxed at 100% over $1M/year, you'd only get $431 billion. So that would only add about $200 billion (about 15%) of Federal revenue per year since they're already paying about half of that on earnings over $1M/yr. Oh yeah, BTW, how would they pay local and state taxes out of that?
- xenadu02 8y ago
  Then close the loopholes. The long-term alternative is revolution where the rich are lined up against a wall and shot. There is no natural law guaranteeing a right to private property. Nor is there anything guaranteeing wealth shall accrue to the wealthy. We could just as easily make it the law that accumulating net assets > $10m is punishable by death. This same pattern has repeated itself many times. The people at the top accumulate all the money, the economy grinds to a halt, the 0.1% use propaganda and control of state power to suppress any attempts to change the status quo (whether violent or not), then eventually the system collapses under its own weight. The outcome is often quite bad for everyone but since the 90% have nothing to lose that hardly matters. Unfortunately it was fear of communist revolution kept capitalism in check. Now nothing does. I fear we're going to continue our slow slide downward, with ever more cuts, voter suppression, and various fascist policies in an effort to control "the people" and prevent change. Without a relief valve pressure will just continue to build until it can't.
- amelius 8y ago
  The problem is the rich using their wealth for more wealth accumulation, e.g. through rent seeking. Even if progressive taxing doesn't get you much money directly, indirectly it will improve wealth through a better wealth distribution. In other words, it is no problem that the rich have more money; the problem is them using that money against the rest of us. If you don't see how, try entering a game of Monopoly a few rounds after it has started.
- itchyouch 8y ago
aantix 8y ago
How is the U.S. economy being "bled dry"? 96% of the population have a television. 90% have a cell phone. 80% have access to the Internet. Catastrophic healthcare is now capped, and low-income families are subsidized on health plans. Public education is mandated and provided everywhere. Public libraries are available in virtually every city.
- itchyouch 8y ago
  The truth probably lies somewhere in between you and the OP. Most of the things you've mentioned are at the top-half of Maslow's hierarchy of needs. For many, they are one pay check away from homelessness. Public education, while mandated, is not equal, as property taxes pay for education across most of the U.S, which equates to, rich folks/better neighborhoods having access to better funded schools. There was a hackernews comment some time ago that pointed out that the fundamental problem seems to be that over the years, the distribution of risk has moved from institutions to the individual. The individual bears the brunt of the risk, with cascading burdens tied to small emergencies. The oft cited scenario of low-income folks losing their job due to car troubles, thus being on the brink of homelessness, due to non-payment of rent is becoming more of a reality for the middle class.
- ntsplnkv2 8y ago
  A television is a sign of wealth? TVs can be bought for $100 nowadays. Cell phone? You can get those EXTREMELY cheap. Define access to the internet? > Catastrophic healthcare is now capped, and low-income families are subsidized on health plans. This is simply untrue. Many changes Obamacare made have essentially been gutted by the current administration. > Public education is mandated and provided everywhere. Public libraries are available in virtually every city. Public libraries have been around decades as has public education.
  - burfog 8y ago
    Never mind actually owning a television. The fact that you can purchase one for an amount of money that seems trivial is an indicator that you are, in an absolute sense, wealthy. Our poorest people are in many ways wealthy compared to both people of times past and compared to people in poor nations. Homeless people can get apples and potatoes all year long, something even William the Conqueror couldn't have.
mcantelon 8y ago
Outsourcing and automation still have much of the economy to eat in America and the rest of the West.

CNJ7654 8y ago

This just in! Most major businesses moving outside of the US pending radical tax code reform!

matthewwiese 8y ago
Your comment was dead but I thought I may as well vouch it. Although you wrote your point in a snarky tone, taking large corporations into account when discussing this topic seems at least halfway in good faith. FWIW I too am a jobless Millennial at the moment, so it's not like I am playing devil's advocate because of a nefarious hidden agenda. EDIT: Spelling.

kindarooster 8y ago

I wish I heard this view on taxes more often. Have a nice smooth tax curve up to like 95% at some income level (5 or 10 M). The rich are not taxed anywhere close to enough.

rich-and-poor 8y ago
If someone figures out how to make 5M/year of income, I am absolutely certain they are better at capital allocation than the current administration. You are suggesting that they are not, and that we need to have the state decide where the money of the top earners go. I'm sorry, but we have tried that before. It does not end well.
- spruciefic399 8y ago
  I think the problem with that argument is that the reasons an individual might be good allocating their own capital are distinct from the reasons they have capital, or what is justified, in the sense of ethical or societally defensible. A successful white-collar criminal can be said to be good at capital allocation, to make an extreme example. My argument is not that wealth means someone is criminal (although I do think criminality has as a goal wealth rather than poverty, which is the inverse but relevant). However I do think there are lots of hidden costs that people advertently or inadvertently manage to get out of paying for, and taxes are meant to recognize that fact. The bailouts of the great recession are good examples of this to me in some sense. The government saved certain businesses, or ameliorated their crash. Whether or not this was the right decision is one thing, but given that they did get bailouts (or outs), suggests that what we should expect is taxes and regulation to support these kinds of things. There are lots of other things like this that conveniently get glossed over, like hidden environmental costs, education and infrastructure, research, etc. I find it incredibly manipulative, for example, for arguments to be made against net neutrality on the grounds that telecom companies somehow bootstrapped their way up from nothing, when the internet itself was a government invention, and much of their infrastructure is made possible by public right-of-way laws or other privileges given by municipalities. I think the fundamental problem with US society today is an extreme form of survivorship or fundamental attribution bias, where we grossly overattribute success to individual characteristics and not other factors. Then we get locked into these strawman debates that pit extreme capitalism against communism, as if there's no moderated grey area, that our only choices are complete equality of wages etc. or winner-takes all gross inequality. What I increasingly see in the US are the haves and the have nots, and I no longer believe that the haves, by in the large, deserve what they have in a way that the have nots do not. Income inequality, to me, is bad not just because of the disparity itself, but because it tends to exaggerate market errors in valuation. We tend to have these conversations and HN and elsewhere where we look at these examples of downward mobility and point to everything someone did wrong, but then do not turn to management, administration, business, etc. and ask "did they really do everything right"? We also tend to act as if, if they really made an error, that is really worth the downward mobility they accrued.
- Harvey-Specter 8y ago
gok 8y ago
A 95% tax on incomes over $5M/year would raise about $100B per year in the US. That would be about a 3% increase in total federal revenue. Even if that were directly redistributed, every American would get a $400 check. It would not affect income inequality measurably.

tjr225 8y ago

I think the pendulum is bound to swing that way...hopefully sooner rather than later.

rich-and-poor 8y ago
Hopefully sooner? I think, hopefully never. As soon as you take the money away from the geniuses, the insanely industrious businessmen, and allow the lame bureaucrats and politicians to decide where it goes, then you destroy a generation: No more will angsty, thirsty, motivated young bloods work 20 hour days for a decade to build a business.
- profunctor 8y ago
  That didn't happen under Eisenhower when the top tax rate was 92%. Although I think its not a 92% income tax that is needed but a high tax on capital.
  - rich-and-poor 8y ago
    Fair enough, I think given the replies I've received that I need to learn more about tax rates and growth; since I've already started the conversation with you do you have any suggestions on how I should understand this topic better?
  - mikestew 8y ago
    "And what happened next, Grandpa? Did such oppressive tax rates stem economic growth?" "My boy, not at all! What followed was one of the most prosperous times in the country!" I'm not saying correlation, causation, blah, blah, blah. But such rates not only didn't "destroy a generation", it's a time many look back to fondly (in which case they're probably white and male).
- evilduck 8y ago
  Haven't we _already_ destroyed a generation with your template?

rich-and-poor 8y ago

EDIT: I rewrote this comment because I thought it was too combative, and not with the guidelines. So. I think that the idea that we should tax the high earners of their entire income is a very bad idea! Would it not destroy the motivation of those top earners to work hard, to keep innovating, and to strive for success? It also makes the assumption that, should we take the income away from the top earners, that the state will do a better job at putting that money back into the economy. I think that assumption is incorrect. A person who has figured out how to make 5M a year, whether it's through advertising or a manufactured product, is probably better at capital allocation than a bureaucrat or politician. You also mention that "the root cause needs to be addressed." Unfortunately, we don't know what the root cause of wealth inequality is, and all historical attempts at "fixing the root cause" with wealth redistribution have ended in catastrophe; we really do need to remember that because your comment is quite similar to Marx's famous quote "From each according to his ability, to each according to his needs". In fact, unequal distribution of resources is a natural law, called the Pareto Principal, and it is everywhere: The height of trees, number of progeny of chimps, number of players that win Monopoly in a given game... Inequality is not an evil force, it is a natural force that has been fought historically at the great peril of the populations that decided to fight it. Now, perhaps there is some variation of this progressive tax law that encourages investment. Perhaps that is even suggested in your comment. I would be open to something that allowed people to have 5M/year in income, but above that, they were heavily incentivized to invest.

munificent 8y ago
> taking all the money from the businessmen that are most effective will demolish what is left of the economy, overnight. Do you have any data showing that top marginal rate negatively correlates to economic growth? I'm looking at the charts right now and, if anything, a high marginal rate appears to lead to greater growth.
- rich-and-poor 8y ago
  Can you show me the charts?

gok 8y ago

Extremely progressive taxation isn't effective. The very rich have ways of hiding or deferring income. There's also the problem that there simply isn't very much money at that level. Just to put it into perspective, the top 1% of tax payers only had an AGI of about $2 trillion. Let me get even more extreme than what you propose. If you taxed at 100% over $1M/year, you'd only get $431 billion. So that would only add about $200 billion (about 15%) of Federal revenue per year since they're already paying about half of that on earnings over $1M/yr. Oh yeah, BTW, how would they pay local and state taxes out of that?

xenadu02 8y ago
Then close the loopholes. The long-term alternative is revolution where the rich are lined up against a wall and shot. There is no natural law guaranteeing a right to private property. Nor is there anything guaranteeing wealth shall accrue to the wealthy. We could just as easily make it the law that accumulating net assets > $10m is punishable by death. This same pattern has repeated itself many times. The people at the top accumulate all the money, the economy grinds to a halt, the 0.1% use propaganda and control of state power to suppress any attempts to change the status quo (whether violent or not), then eventually the system collapses under its own weight. The outcome is often quite bad for everyone but since the 90% have nothing to lose that hardly matters. Unfortunately it was fear of communist revolution kept capitalism in check. Now nothing does. I fear we're going to continue our slow slide downward, with ever more cuts, voter suppression, and various fascist policies in an effort to control "the people" and prevent change. Without a relief valve pressure will just continue to build until it can't.
amelius 8y ago
The problem is the rich using their wealth for more wealth accumulation, e.g. through rent seeking. Even if progressive taxing doesn't get you much money directly, indirectly it will improve wealth through a better wealth distribution. In other words, it is no problem that the rich have more money; the problem is them using that money against the rest of us. If you don't see how, try entering a game of Monopoly a few rounds after it has started.
itchyouch 8y ago

aantix 8y ago

How is the U.S. economy being "bled dry"? 96% of the population have a television. 90% have a cell phone. 80% have access to the Internet. Catastrophic healthcare is now capped, and low-income families are subsidized on health plans. Public education is mandated and provided everywhere. Public libraries are available in virtually every city.

itchyouch 8y ago
The truth probably lies somewhere in between you and the OP. Most of the things you've mentioned are at the top-half of Maslow's hierarchy of needs. For many, they are one pay check away from homelessness. Public education, while mandated, is not equal, as property taxes pay for education across most of the U.S, which equates to, rich folks/better neighborhoods having access to better funded schools. There was a hackernews comment some time ago that pointed out that the fundamental problem seems to be that over the years, the distribution of risk has moved from institutions to the individual. The individual bears the brunt of the risk, with cascading burdens tied to small emergencies. The oft cited scenario of low-income folks losing their job due to car troubles, thus being on the brink of homelessness, due to non-payment of rent is becoming more of a reality for the middle class.
ntsplnkv2 8y ago
A television is a sign of wealth? TVs can be bought for $100 nowadays. Cell phone? You can get those EXTREMELY cheap. Define access to the internet? > Catastrophic healthcare is now capped, and low-income families are subsidized on health plans. This is simply untrue. Many changes Obamacare made have essentially been gutted by the current administration. > Public education is mandated and provided everywhere. Public libraries are available in virtually every city. Public libraries have been around decades as has public education.
- burfog 8y ago
  Never mind actually owning a television. The fact that you can purchase one for an amount of money that seems trivial is an indicator that you are, in an absolute sense, wealthy. Our poorest people are in many ways wealthy compared to both people of times past and compared to people in poor nations. Homeless people can get apples and potatoes all year long, something even William the Conqueror couldn't have.

mcantelon 8y ago

Outsourcing and automation still have much of the economy to eat in America and the rest of the West.