3 ms·

That is true, but the numbers are probably higher than you think. At least for me, I think wealth at least (as distinct from income) makes a non-trivial differe

by darawk 8y ago

That is true, but the numbers are probably higher than you think. At least for me, I think wealth at least (as distinct from income) makes a non-trivial difference to me up until I can afford to live the rest of my life comfortably without continuing to work for someone else. Now, above that level, there are actually some other emotionally satisfying wealth strata, such as: - Ability to invest in or personally found/fund companies for ideas that you have - Ability to found/fund charities that you think would make the world better I'm not saying that everyone needs to achieve these things to be happy. But I would say that I think it's easy to look up to say, 2-3x your own income and say "how could anyone ever want more than that", but then when you get there, you find that actually there's a lot of interesting stuff that you might be able to do if you made 5-10x more still, and at least for me, it's mostly not about luxury. It's about being able to pursue interesting things with autonomy.

ForHackernews 8y ago
> up until I can afford to live the rest of my life comfortably without continuing to work for someone else. There are probably a few exceptions (i.e. 19 year old superstar athletes who just signed their first major league contract) but I would generally assume that when we're talking about people with annual income in the > $10MM range, then those people already have more than enough wealth to live comfortably forever without working.
- darawk 8y ago
  Totally, but the point of this paper isn't the people who already have $10mm. It's the people who want to get there, and what they're willing to sacrifice to do it. Building a massive business like say, Amazon, takes enormous personal sacrifice and risk. The high incomes that result from it incentivize that sacrifice/risk. They cause the person who currently has relatively little, to risk what they do have to produce something great, something that we all benefit from. The point of this paper is that there is an amount of risk/sacrifice people will make for $10mm, that is different from what they will make for $100mm, and different still from what they'll make for $1b. By truncating the reward distribution at $10mm, you tell those people to pursue something else instead. Bezos is actually an excellent example. In his career at DE Shaw, he was almost certainly making very high 6 figures or maybe even 7, or certainly on a career track to be doing so shortly. He threw that away to take a massive personal risk to build Amazon. Would he have done that if you capped his potential reward at $10mm? Or would he have stayed in his comfortable finance job, making a bit less than that?
  - dlp211 8y ago
    Considering that Bezos derives the vast majority of his wealth through capital gains as opposed to income, I'd say yes.
    - dahfizz 8y ago
      That's avoiding the issue. If the tax code were such that capital gains and all other income was captured, your parent's logic holds. The loopholes of the current tax system doesn't affect theoretical considerations.
      - sooheon 8y ago
        Regardless, the theoretical considerations are a straw man. No serious progressive tax scheme results in a hard cap of income at something as low as $10m.
        darawk 8y ago
        Ok, and how does the soft cap change the argument?
        sooheon 8y ago
        It means the ordering remains monotonic. It means if you’re on top of the world, you remain so with all the psychological trappings, just on a slightly lower mound. The scraps that come from slightly lowering your absolute position (but keeping relative position the same) will go to addressing externalities and common goods.
        dahfizz 8y ago
        > the ordering remains monotonic That only holds true if you assume people will act the same exact way and with the same exact outcomes. This is a silly assumption to make when you significantly change both the incentives and the difficulty. > The scraps ... will go to addressing externalities and common goods. What world do you live in?
sooheon 8y ago
> I'm not saying that everyone needs to achieve these things to be happy. But I would say that I think it's easy to look up to say, 2-3x your own income and say "how could anyone ever want more than that", but then when you get there, you find that actually there's a lot of interesting stuff that you might be able to do if you made 5-10x more still, and at least for me, it's mostly not about luxury. It's about being able to pursue interesting things with autonomy. This is called the hedonic treadmill and is pretty much built into all humans. Spoiler alert: it never ends.
- darawk 8y ago
  Indeed it is. And on a personal level, that can be a tragedy. But on a social/economic level, it's great for raising everyone's living standards, which is the point of this paper.

by darawk 8y ago

ForHackernews 8y ago

> up until I can afford to live the rest of my life comfortably without continuing to work for someone else. There are probably a few exceptions (i.e. 19 year old superstar athletes who just signed their first major league contract) but I would generally assume that when we're talking about people with annual income in the > $10MM range, then those people already have more than enough wealth to live comfortably forever without working.

darawk 8y ago
Totally, but the point of this paper isn't the people who already have $10mm. It's the people who want to get there, and what they're willing to sacrifice to do it. Building a massive business like say, Amazon, takes enormous personal sacrifice and risk. The high incomes that result from it incentivize that sacrifice/risk. They cause the person who currently has relatively little, to risk what they do have to produce something great, something that we all benefit from. The point of this paper is that there is an amount of risk/sacrifice people will make for $10mm, that is different from what they will make for $100mm, and different still from what they'll make for $1b. By truncating the reward distribution at $10mm, you tell those people to pursue something else instead. Bezos is actually an excellent example. In his career at DE Shaw, he was almost certainly making very high 6 figures or maybe even 7, or certainly on a career track to be doing so shortly. He threw that away to take a massive personal risk to build Amazon. Would he have done that if you capped his potential reward at $10mm? Or would he have stayed in his comfortable finance job, making a bit less than that?
- dlp211 8y ago
  Considering that Bezos derives the vast majority of his wealth through capital gains as opposed to income, I'd say yes.
  - dahfizz 8y ago
    That's avoiding the issue. If the tax code were such that capital gains and all other income was captured, your parent's logic holds. The loopholes of the current tax system doesn't affect theoretical considerations.
    - sooheon 8y ago
      Regardless, the theoretical considerations are a straw man. No serious progressive tax scheme results in a hard cap of income at something as low as $10m.
      - darawk 8y ago
        Ok, and how does the soft cap change the argument?
        sooheon 8y ago
        It means the ordering remains monotonic. It means if you’re on top of the world, you remain so with all the psychological trappings, just on a slightly lower mound. The scraps that come from slightly lowering your absolute position (but keeping relative position the same) will go to addressing externalities and common goods.
        dahfizz 8y ago
        > the ordering remains monotonic That only holds true if you assume people will act the same exact way and with the same exact outcomes. This is a silly assumption to make when you significantly change both the incentives and the difficulty. > The scraps ... will go to addressing externalities and common goods. What world do you live in?

sooheon 8y ago

> I'm not saying that everyone needs to achieve these things to be happy. But I would say that I think it's easy to look up to say, 2-3x your own income and say "how could anyone ever want more than that", but then when you get there, you find that actually there's a lot of interesting stuff that you might be able to do if you made 5-10x more still, and at least for me, it's mostly not about luxury. It's about being able to pursue interesting things with autonomy. This is called the hedonic treadmill and is pretty much built into all humans. Spoiler alert: it never ends.

darawk 8y ago
Indeed it is. And on a personal level, that can be a tragedy. But on a social/economic level, it's great for raising everyone's living standards, which is the point of this paper.