11 ms·

As long as the pie is increasing in size, people can tolerate getting a proportionally smaller slice. If the pie stops growing, that becomes untenable. I think

• GarrisonPrime 7y ago
  Wealth taxes would only be a band-aid, kicking the can down the road. The wealthy aren’t a magically endless source of loot.
  • mdorazio 7y ago
    Wealth taxes might be the only way to avoid complete inequality in market-based systems [1]. Especially if the market is not growing for everyone. The wealthy kind of are an endless source of loot because the definition of wealthy is one relative to a median, so you'll either end up with everyone roughly equal in wealth (is that a bad thing?) or, more likely, over time new people will enter and exit the wealthy class due to various advantages and market dynamics so that there is an endless supply. [1] https://www.scientificamerican.com/article/is-inequality-inevitable/ https://www.scientificamerican.com/article/is-inequality-ine...
    • deleted 7y ago
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    • Isinlor 7y ago
      You should define what you mean by wealth. What does it mean that you will loot wealthy people? Will you eat shares of a company for breakfast? Will you burn cash in stove to warm your house? Wealthy people control resources. You can take control from them, but it will not create more resources. One, fundamental resource is human labor. This resource will decline in proportion to the total human population whether it will be controlled by wealthy people or not. Someone will need to physically do the work that needs to be done around old people. And there will be more old people, than there will be young people.
      • MiroF 7y ago
        > Wealthy people control resources. Yes, it turns out that resources are actually the thing we need to sustain older people. > Someone will need to physically do the work that needs to be done around old people. Someone literally is already doing the work that needs to be done for old people. It's just that most of the wealth produced from that work goes to already wealthy people.
        • brokenkebab 7y ago
          It's just that most of the wealth produced from that work goes to already wealthy people. Exactly that work (social support, and healthcare for seniors) in total numbers consumes resources, not produces them. If it wouldn't be so there would be no need to fund it from taxes. Frankly, it sounds like you rushed with a randomly chosen slogan to this thead.
      • mdorazio 7y ago
        I'm not really following your question. The idea of a wealth tax is pretty straightforward. You take stock of a person's assets, take a percentage of that figure (say 1%) and send them a bill for that dollar amount. How they choose to pay that bill is entirely up to them - they can borrow against their assets, liquidate some of them, or use cash on hand. I don't really see how control of resources factors into the equation.
        • Isinlor 7y ago
          Control of resources factors into the equation, because dollars are intrinsically worthless. If money have intrinsic value, why not to print 1 000 000 000$ on a bill and give one to everyone? Suddenly everyone would become a billionaire. Your example is less extreme, but it is still about redistributing control. Redistributing dollars redistributes control of what people do, and how other resources are allocated. This is related to the article, because moving control of people does not create more people. As population will be getting older, there will be more old people that less young people will need to take care of. This is a fact. You could argue that redistributing wealth will lead to more efficient control of resources, and so it will make it easier to provide care. But it is still fundamentally about control of diminishing resources and increasing needs. BTW - I'm Polish and my government tries to literally pay people for having children. Around 30 000$ spread across childhood (take into account that Poles earn a lot less than Americans), and while it put a small dent in fertility rate, the number of children born in Poland is currently lower than before introducing that program.
    • marcusverus 7y ago
      You cannot destroy the incentive structure for economic activity (financial rewards) without catestrophic consequences. People don't pull start-up hours so that their neighbors can prosper, they do it for themselves. When you take away the possibility of great rewards, you destroy the incentive to add great value. See the entire history of collectivism.
      • ClumsyPilot 7y ago
        The conversation is about what's fair incentive structure, correcting it does not amount to its destruction. Also we do not require people to pull startup hours, and only a minority of the population ever does that. I dont see how that comes into this conversation.
        • MiroF 7y ago
          It's a Rawlsian question of "how can we structure incentives such that everybody is better off?" Now, the metric for "everybody is better off" is still an open problem, but there seem to be near pareto optimal steps we can take, like a high threshold wealth tax.
        • marcusverus 7y ago
          I'm not sure what conversation you're participating in, but the parent comment was flippantly discussing the possibility of taxes so draconain that the GIDI coefficient would approach zero: "The wealthy kind of are an endless source of loot because the definition of wealthy is one relative to a median, so you'll either end up with everyone roughly equal in wealth (is that a bad thing?) " In the world advocated for in that comment, with aggressively averaged out income/wealth, there is no incentive to produce value above what is required to reach the average income.
      • MiroF 7y ago
        A 2% wealth tax above a few hundred of millions of dollars doesn't destroy the incentive structure for economic activity, it is disingenuous to suggest it would.
  • moron4hire 7y ago
    Given that the gap between the rich and poor as a share of GDP has been growing for quite some time, it kind of suggests the rich already do have a "magical, endless source of loot".
    • praptak 7y ago
      This is known at least since Marx.
  • zappo2938 7y ago
    I used to be a chef. In one situation I was payed dividing the number of patrons by number of cooks to cook for 40 people a night. In another situation I payed the same cook for 4 wealthy people on a yacht. It isn't hording. It is how the money is spent. One owner of a yacht was on the board of his alma mater. The school was required by law to spend equally on women's sports as men't sports. The school had to invest in sports fields which were expensive. He complained about it. Later I worked on a yacht of a person who grew grass. During this time when the schools were required to increase the size of their fields he made a fortune. There are just winners and losers. But cooking for 40 or 4 are pretty much the same from a labor perspective at that size because recipes scale to 10x easily.
  • MiroF 7y ago
    Are people not aware how large wealth inequality is at this point? A small marginal wealth tax would generate just absolutely massive amounts of revenue because that is where most money is locked up, not in people's salaried income.
  • klyrs 7y ago
    > The wealthy aren’t a magically endless source of loot. True. But that's how they've been treating folks with less advantage since time immemorial. Which tends to work until the exploitation becomes too egregious and lower classes implement a head tax on the wealthy.
  • notacoward 7y ago
    I think it's very revealing that your argument assumes "the wealthy" are a class completely distinct from everyone else, without new people becoming wealthy all the time. Of course, nobody ever admits that they support such an arrangement, even as they oppose the primary means of preventing it.
• seppel 7y ago
  But the thing is: This is not a wealth problem. In every society where some people are working ("the young") and some people are not ("the old"), and everybody is consuming, the young people have to work for the old. There is no way around that. There are not much goods or services that you can store for more than a year. They young always have to do the work. You can think of different schemes how you transfer the buying power to the old (taxes, dividends, interests, rent, ...) but in the end of the day, some are working, some are not and the young always have to do the work for the old.
  • alexbouchard 7y ago
    Well that's if you don't increase efficacy which we are well on our way of doing. This doesn't strike me as such a large issue since "the old" are still consuming and therefore spending capital. Automation and efficacy increase (through tech) will more then make up for the population discrepancies as long as there is enough capital to warrant the investment.
    • ClumsyPilot 7y ago
      Forget about money for a moment, think of just physical world. The point is, the young would have a higher quality of life if they did not have to support the old. If one young person has to support two old, their quality of life will decline no matter what the fiscal arrangements are. Sure, technology improves efficiency, but not 300%
      • danaris 7y ago
        That assumes each person produces only enough for a small, fixed number of people to prosper. And, um...I don't wish to worry you, but efficiency has improved a whole hell of a lot more than 300% over the last 40 years or so. The problem is that the gains have gone almost entirely to the people at the very top of the pyramid.
        • ClumsyPilot 7y ago
• jeremyjh 7y ago
  People can't eat dollars. Dollars can't provide health care services. Better allocation of dollars will help in the near-term but the problem noted in TFA is there will eventually not be enough workers to support the non-workers.
  • MiroF 7y ago
    I don't think this takes into account rising productivity of labor. Sure, people can't eat dollars but dollars still represent value.
    • kd5bjo 7y ago
      Dollars are how we account for net value provided, and their only value is in society’s collective agreement that tangible goods and services person A provided to B yesterday can be balanced by unlike goods and services A received from C today. They’re literally the debt that society owes the holder to compensate for past services to the society. It’s not the only system of distributing goods and services to the populace. In theory, a centralized authority could evaluate everyone’s current need and provide it to them directly. This has gone disastrously wrong whenever it’s been tried in practice, though.
    • jeremyjh 7y ago
      Yes I think it is ironic if people are worried about both technological unemployment and a scarcity of labor.
      • chongli 7y ago
        It’s still possible for it to be a problem. Human skills aren’t entirely fungible. If technological disruption continues to increase in pace then we may reach a point where people’s education becomes obsolete before they even finish their degrees. We could see large scale technological unemployment despite a shortage of labour in a set of ever-changing, highly specialized fields that people only end up in by an extremely lucky guess at the time they declare a major.
• mrfusion 7y ago
  I always wondered, why not a stronger inheritance tax instead of a wealth tax? It would seemingly accomplish the same thing but seems fairer since the heirs didn’t earn the money in the first place. To head off the main critique. I think either tax could be equally gamed by the rich. I don’t necessarily support either but I’ve been wondering why Inheritance taxes aren’t really being considered.
  • semiotagonal 7y ago
    I would love an inheritance tax. Even a 100% inheritance tax, on anything more than zero dollars. Of course I don't really stand to inherit anything significant, so it's super easy for me to support. Inheritance is one of those areas where people's values and what they'd support in practice tend to diverge, according to their incentives. (Same goes for California Proposition 13, incidentally).
    • mrfusion 7y ago
      I guess the fact that you can just call it a “death tax” can easily rally popular opposition even if people would otherwise support it. It’s my theory that the less words you can use to make an argument, the more powerful it is.
      • MiroF 7y ago
        What would really rally popular opposition is the massive massive amounts of spending on propaganda (advertising, etc whatever you want to call it) to galvanize the American public to oppose something like this. We live in a democracy, but elites still have enough say that something like an 100% inheritance tax is effectively off the table.
        • RhysU 7y ago
          A 100% inheritance tax would be a nightmare in practice. Grandma died? Cool, go sell her house now.
• harimau777 7y ago
  The problem that I see is that in many situations the pie cannot grow or its growth rate is limited. The most obvious example to me is property in major, metropolitan cities in the US.
• CinchWrench 7y ago
  Wealth taxes are just going to be another way for the top 0.1% to fleece the rest of the top 10% or top 50%, because the rich and powerful will always change the rules to benefit them and to hide their assets.
• nostrademons 7y ago
  The other big unknown is what happens to prices when population starts growing. Much of investing common wisdom is based on the assumption of a steadily growing population. The reason land prices generally rise is because there is a growing number of property buyers chasing a fixed amount of land; this means that the higher-income buyers buy up the land and the overall price rises. The reason stock prices rise is that there are a fixed number of oligopolist markets in the economy (competitive markets like restaurants & hairdressers rarely take investment), and an ever-increasing number of savers looking to earn a return on their money. If you start shrinking the working-age population, the price of land falls dramatically (most people end up inheriting a house from their parents; if they don't, there are several people that inherited multiple houses that they have no use for and are looking to convert into cash). The bargaining power of labor increases dramatically, pushing down corporate profits, but it also means fewer buyers for capital stock and more people trying to sell it to meet their daily existence needs. The last time this happened (in the wake of Black Death, where 30% of the world's population died), the social system that had been in existence for a millenia collapsed. Serfs were able to demand better wages and working conditions for their labor. Increased bargaining power led to the guild system of the early Rennaissance. Increased saving power led to systems to manage pooled capital (like fractional-reserve banking and the corporation) and to the rise of the mercantile and capitalist classes. The big losers were the landed aristocracy, who found that the land they owned just wasn't worth as much in this new world.