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As a partial rebuttal to the article’s points about income inequality, it seems worthwhile to quote one of PG’s better-known essays [0]: >Variation in wealth c

As a partial rebuttal to the article’s points about income inequality, it seems worthwhile to quote one of PG’s better-known essays [0]: >Variation in wealth can be a sign of variation in productivity. (In a society of one, they're identical.) And that is almost certainly a good thing: if your society has no variation in productivity, it's probably not because everyone is Thomas Edison. It's probably because you have no Thomas Edisons. >In a low-tech society you don't see much variation in productivity. If you have a tribe of nomads collecting sticks for a fire, how much more productive is the best stick gatherer going to be than the worst? A factor of two? Whereas when you hand people a complex tool like a computer, the variation in what they can do with it is enormous. Now, the middle-class and upper-middle-class do subsidize the wealthiest Americans as a result of the US’s tax structure, and that’s a problem. But aside from that, the fact that the top quantiles in the US are wealthier than their equivalents elsewhere is not fundamentally a bad thing. [0] http://www.paulgraham.com/gh.html http://www.paulgraham.com/gh.html

bobthechef 8y ago
The broader truth is that inequality as such is not an indication of injustice or, as it seems to be presented, an injustice itself. There's a huge difference in wealthy between Bill Gates and a member of the upper middle class, but few people worry about that, expect the envious. Poverty is a problem, and corrupt uses of enormous wealth to hijack politics and exert power in unjust and immoral ways are problems, but not the wealth as such.
- ddingus 8y ago
  I think of it this way. Say we are CEO and our enterprise makes 60 billion a year. Bankable. Now, if we fund better lives, we make 58 billion a year. (Just randomish numbers) What is the priority and why?
munk-a 8y ago
I'd like to see us address the magnitude of wealth & income inequality, but it isn't necessary for us to end up at a uniform distribution, some inequality in income distribution helps to spur growth in under-served or high risk vocations... but we've reached a rather ridiculous extreme at this point and for some reason we're still retaining strongly regressive taxes (i.e. payroll, and various complex loop holes that allow percentage savings while having mostly fixed costs to exploit)
- tfehring 8y ago
  I completely agree - my point is that the posted article’s metrics aren’t effective at illustrating these points. It would be more meaningful to look at, say, the share of productivity gains that has flowed to capital as opposed to labor (~100% in the US) or at the volume and distribution of various transfers and cross-subsidies over time.
lend000 8y ago
I am surprised by how infrequently I see the arbitrary progressive tax bracket levels being brought up in these debates. The fact that you are considered ultra wealthy and paying at about the top bracket at ~200k per year is absurd. Meanwhile there is no progressive taxation for capital gains. The highest brackets should be stretched into the tens of millions (or even in the hundreds), and taxes should be significantly lower for the upper middle class (for whom it is increasingly difficult to become upper class through hard, good work and a somewhat standard career directory).
- evanpw 8y ago
  > there is no progressive taxation for capital gains (I know this is not your main point, but) short-term capital gains are taxed at the same rate as ordinary income, and long-term gains have three brackets (0%, 15%, and 20%).
  - dahdum 8y ago
    Goes up to 23.8% federal due to ACA, along with 13.3% CA state tax for long term capital gains. Just about the highest in the developed world IIRC.
- tfehring 8y ago
  Better yet, tax wealth instead of income. The value derived from government services is more closely proportional to wealth than to income, and income-based taxation is inherently regressive compared to wealth-based taxation. The only significant wealth-based tax in the US is property tax, and even that is somewhat regressive because the share of income and wealth spent on housing decrease as income and wealth increase.
  - walshemj 8y ago
    That wouldn't work have you not heard of splits :-) ie trusts / funds designed with separate classes of share one gives income one gives capital gain.
  - dahdum 8y ago
maxxxxx 8y ago
Nobody disputes that more productive people should get more reward. But with inequality increasing I have my doubts that the top x % are increasingly more productive than the rest. Or are today's CEOs who make for example 200 times the average workers salary 10 times better than the CEOs in the 50s who made 20 times as much as their workers?
s2g 8y ago
> Variation in wealth can be a sign of variation in productivity Yes, Jeff Bezos is 2 million times more productive than the average person. Maybe we shouldn't listen to the guy worth, at least, hundreds of millions when it comes to wealth inequality.
- tuesdayrain 8y ago
  > Yes, Jeff Bezos is 2 million times more productive than the average person. That is true to some extent. I think the average person could live out 2 million lifetimes and not once achieve the success he's gotten.

bobthechef 8y ago

The broader truth is that inequality as such is not an indication of injustice or, as it seems to be presented, an injustice itself. There's a huge difference in wealthy between Bill Gates and a member of the upper middle class, but few people worry about that, expect the envious. Poverty is a problem, and corrupt uses of enormous wealth to hijack politics and exert power in unjust and immoral ways are problems, but not the wealth as such.

ddingus 8y ago
I think of it this way. Say we are CEO and our enterprise makes 60 billion a year. Bankable. Now, if we fund better lives, we make 58 billion a year. (Just randomish numbers) What is the priority and why?

munk-a 8y ago

I'd like to see us address the magnitude of wealth & income inequality, but it isn't necessary for us to end up at a uniform distribution, some inequality in income distribution helps to spur growth in under-served or high risk vocations... but we've reached a rather ridiculous extreme at this point and for some reason we're still retaining strongly regressive taxes (i.e. payroll, and various complex loop holes that allow percentage savings while having mostly fixed costs to exploit)

tfehring 8y ago
I completely agree - my point is that the posted article’s metrics aren’t effective at illustrating these points. It would be more meaningful to look at, say, the share of productivity gains that has flowed to capital as opposed to labor (~100% in the US) or at the volume and distribution of various transfers and cross-subsidies over time.

lend000 8y ago

I am surprised by how infrequently I see the arbitrary progressive tax bracket levels being brought up in these debates. The fact that you are considered ultra wealthy and paying at about the top bracket at ~200k per year is absurd. Meanwhile there is no progressive taxation for capital gains. The highest brackets should be stretched into the tens of millions (or even in the hundreds), and taxes should be significantly lower for the upper middle class (for whom it is increasingly difficult to become upper class through hard, good work and a somewhat standard career directory).

evanpw 8y ago
> there is no progressive taxation for capital gains (I know this is not your main point, but) short-term capital gains are taxed at the same rate as ordinary income, and long-term gains have three brackets (0%, 15%, and 20%).
- dahdum 8y ago
  Goes up to 23.8% federal due to ACA, along with 13.3% CA state tax for long term capital gains. Just about the highest in the developed world IIRC.
tfehring 8y ago
Better yet, tax wealth instead of income. The value derived from government services is more closely proportional to wealth than to income, and income-based taxation is inherently regressive compared to wealth-based taxation. The only significant wealth-based tax in the US is property tax, and even that is somewhat regressive because the share of income and wealth spent on housing decrease as income and wealth increase.
- walshemj 8y ago
  That wouldn't work have you not heard of splits :-) ie trusts / funds designed with separate classes of share one gives income one gives capital gain.
- dahdum 8y ago

maxxxxx 8y ago

Nobody disputes that more productive people should get more reward. But with inequality increasing I have my doubts that the top x % are increasingly more productive than the rest. Or are today's CEOs who make for example 200 times the average workers salary 10 times better than the CEOs in the 50s who made 20 times as much as their workers?

s2g 8y ago

> Variation in wealth can be a sign of variation in productivity Yes, Jeff Bezos is 2 million times more productive than the average person. Maybe we shouldn't listen to the guy worth, at least, hundreds of millions when it comes to wealth inequality.

tuesdayrain 8y ago
> Yes, Jeff Bezos is 2 million times more productive than the average person. That is true to some extent. I think the average person could live out 2 million lifetimes and not once achieve the success he's gotten.