8 ms·

> My question is how much, if any, social unrest this will lead to. My question is how many people have absolutely no ties to the stock market? I'm pretty far

> My question is how much, if any, social unrest this will lead to. My question is how many people have absolutely no ties to the stock market? I'm pretty far from any definition of rich, but I still have a 401k, so you're not likely to see me rioting because the S&P 500 is in the green.

karatestomp 7y ago
About half of households own no stock at all. It's a safe bet a good portion of the other half have little enough that "the market's up!" isn't very meaningful for them.
thescriptkiddie 7y ago
Only 52% of americans own any stock whatsoever [0], and the richest 10% of americans own 84% of all stock. [0] https://news.gallup.com/poll/190883/half-americans-own-stocks-matching-record-low.aspx https://news.gallup.com/poll/190883/half-americans-own-stock... [1] https://www.nber.org/papers/w24085 https://www.nber.org/papers/w24085
- lotsofpulp 7y ago
  All taxpayers (since they will have to make up for shortfalls) and recipients of defined benefit pensions (since they will have to accept reductions in benefits) are also indirectly exposed to changes equity prices.
  - ardy42 7y ago
    > All taxpayers (since they will have to make up for shortfalls) and recipients of defined benefit pensions (since they will have to accept reductions in benefits) are also indirectly exposed to changes equity prices. But that needs to be put in its proper context. Even if you have a small amount of stock or indirectly benefit from stock prices in some way, it'd be stupid if you let that mentally tie yourself to the stock market. For instance, shortfalls in taxes do not necessarily need to be made up by "all taxpayers." With progressive taxation, they can be made up by some taxpayers (which will likely consist of most HN commentators, since software engineers are relatively wealthy).
    - lotsofpulp 7y ago
      Not if the shortfall is made up via asset price inflation and dollar devaluation. Then the non asset owning class takes the brunt of the pain. Which is what I believe has been happening for decades. Progressive taxation can help, but I doubt the political will exists to tax capital gains.
      - thephyber 7y ago
        > I doubt the political will exists to tax capital gains A friendly reminder that capital gains is taxed (when it is realized).* I assume that you are actually complaining about closing loopholes that exist for avoiding paying the full rate. * Obviously this comes with the caveat that the tax code is large with lots of "loopholes" (in quotes because they were mostly intentionally created). Capital gains losses are somehow socialized as tax deductions and the "carried interest loophole" allows certain fund managers to treat capital gains as a different class of income.
  - zerocrates 7y ago
    The number of people in the US with defined benefit pensions is quite low and consistently falling.
- at-fates-hands 7y ago
  > and the richest 10% of americans own 84% of all stock. The top 20% of earners also handle close to 90% of the tax burden, while close to 50% of the population pay nothing in taxes.
  - standardUser 7y ago
    In a society where the bottom 50% have virtually no wealth and are in debt, how much do you think they should pay in taxes and how do you expect them to pay for it?
  - apazzolini 7y ago
    Man, that 50% of the population that's able to buy things without paying sales tax is really fortunate. How do I sign up for that benefit?
    - BetaDeltaAlpha 7y ago
      You could move to Oregon... ...In all seriousness, the parent comment was probably referring to the Federal Income Tax.
      - apazzolini 7y ago
        Yes, I'm aware that's what he was referring to, but it's not the entirety of the tax burden in the US, and even people who pay nothing in income tax still pay taxes. This is precisely why a flat tax disproportionally impacts lower income people.
        CuriousSkeptic 7y ago
        Unless it’s a flat tax on capital assets. I think it would be interesting to try out a model where _only_ capital assets are taxed. No sales tax, no income tax, no capital gains tax. It should dampen the effect of the rich getting richer only from rent collecting, while still making sure the market allocates capital to where it provides the most economic value (I.e can be turned into enough revenue to pay the tax in question)
SketchySeaBeast 7y ago
What does what you have in your 401k matter if your house and car are being repossessed? I suppose you could pull it all out at penalties and with a bunch of taxes, but that's going to be work, and assumes you have enough in there to make it worthwhile.
- CydeWeys 7y ago
  Penalties are waived for certain exigent circumstances, which I believe this would qualify as.
  - SketchySeaBeast 7y ago
    The larger penalty would still probably be the taxes, which I assume aren't waved, and again assume there's enough in there to make it worthwhile. I know for myself, even though I've been diligently saving for my relatively short career, I don't think there is.
    - xyzzyz 7y ago
      You are going to pay those taxes anyway when you retire. 401k is only beneficial if you expect to pay lower tax rate when you finally retire. Unless you expect the federal tax rates to go significantly down across the board, withdrawing from 401k when you have no other income is actually a great idea, or it would be without the 10% penalty. However, you typically can borrow money from your 401k, and pay no penalty, which makes it a good option if you need temporary liquidity.
      - CydeWeys 7y ago
        And considering how early this pandemic hit in the year, if you were laid off in March you didn't even make 25% of your salary yet. That means your taxes are likely to be quite low for the year, so this is actually a good time to withdraw money from a 401k and take the tax hit. If I ever have a full year gap between jobs (like some kind of a long sabbatical), I'm going to be doing a lot of Traditional to Roth converting, for exactly this reason.
bo1024 7y ago
The idea of the 401k is such an amazing hustle for the wealthy. * Middle-class Americans consistently pump money into the stock market generically (not information trading), raising the value of all your stocks over time. * Now you have a gun to their head to support policies that pump up the value of your stocks even more. * Also, when shit hits the fan, they can't easily cash out, but you can. Both on a mega-scale (recession), and individual stocks (when companies tank, you sell first, and 401k index or diversified funds take a hit). I'm not an expert in this stuff but it smells from miles away.
- ardy42 7y ago
  > The idea of the 401k is such an amazing hustle for the wealthy. You make a very interesting point! I wonder what a "reverse 401k" program would look like (e.g. box the wealthy into aligning their actions with the interests poor/middle class while only marginally benefiting themselves).
  - q92z8oeif 7y ago
    > aligning their actions with the interests poor/middle class Any attempt to recognize classes exits will lead to class war. Everyone is upper class, or waiting to join upper class, anytime now.
    - eli_gottlieb 7y ago
      Class war is good.
  - SketchySeaBeast 7y ago
    Taxes?
  - nitrogen 7y ago
    I wonder what a "reverse 401k" program would look like (e.g. box the wealthy into aligning their actions with the interests poor/middle class while only marginally benefiting themselves). Pensions? Those also don't seem to work all that well.

karatestomp 7y ago

About half of households own no stock at all. It's a safe bet a good portion of the other half have little enough that "the market's up!" isn't very meaningful for them.

thescriptkiddie 7y ago

Only 52% of americans own any stock whatsoever [0], and the richest 10% of americans own 84% of all stock. [0] https://news.gallup.com/poll/190883/half-americans-own-stocks-matching-record-low.aspx https://news.gallup.com/poll/190883/half-americans-own-stock... [1] https://www.nber.org/papers/w24085 https://www.nber.org/papers/w24085

lotsofpulp 7y ago
All taxpayers (since they will have to make up for shortfalls) and recipients of defined benefit pensions (since they will have to accept reductions in benefits) are also indirectly exposed to changes equity prices.
- ardy42 7y ago
  > All taxpayers (since they will have to make up for shortfalls) and recipients of defined benefit pensions (since they will have to accept reductions in benefits) are also indirectly exposed to changes equity prices. But that needs to be put in its proper context. Even if you have a small amount of stock or indirectly benefit from stock prices in some way, it'd be stupid if you let that mentally tie yourself to the stock market. For instance, shortfalls in taxes do not necessarily need to be made up by "all taxpayers." With progressive taxation, they can be made up by some taxpayers (which will likely consist of most HN commentators, since software engineers are relatively wealthy).
  - lotsofpulp 7y ago
    Not if the shortfall is made up via asset price inflation and dollar devaluation. Then the non asset owning class takes the brunt of the pain. Which is what I believe has been happening for decades. Progressive taxation can help, but I doubt the political will exists to tax capital gains.
    - thephyber 7y ago
      > I doubt the political will exists to tax capital gains A friendly reminder that capital gains is taxed (when it is realized).* I assume that you are actually complaining about closing loopholes that exist for avoiding paying the full rate. * Obviously this comes with the caveat that the tax code is large with lots of "loopholes" (in quotes because they were mostly intentionally created). Capital gains losses are somehow socialized as tax deductions and the "carried interest loophole" allows certain fund managers to treat capital gains as a different class of income.
- zerocrates 7y ago
  The number of people in the US with defined benefit pensions is quite low and consistently falling.
at-fates-hands 7y ago
> and the richest 10% of americans own 84% of all stock. The top 20% of earners also handle close to 90% of the tax burden, while close to 50% of the population pay nothing in taxes.
- standardUser 7y ago
  In a society where the bottom 50% have virtually no wealth and are in debt, how much do you think they should pay in taxes and how do you expect them to pay for it?
- apazzolini 7y ago
  Man, that 50% of the population that's able to buy things without paying sales tax is really fortunate. How do I sign up for that benefit?
  - BetaDeltaAlpha 7y ago
    You could move to Oregon... ...In all seriousness, the parent comment was probably referring to the Federal Income Tax.
    - apazzolini 7y ago
      Yes, I'm aware that's what he was referring to, but it's not the entirety of the tax burden in the US, and even people who pay nothing in income tax still pay taxes. This is precisely why a flat tax disproportionally impacts lower income people.
      - CuriousSkeptic 7y ago
        Unless it’s a flat tax on capital assets. I think it would be interesting to try out a model where _only_ capital assets are taxed. No sales tax, no income tax, no capital gains tax. It should dampen the effect of the rich getting richer only from rent collecting, while still making sure the market allocates capital to where it provides the most economic value (I.e can be turned into enough revenue to pay the tax in question)

SketchySeaBeast 7y ago

What does what you have in your 401k matter if your house and car are being repossessed? I suppose you could pull it all out at penalties and with a bunch of taxes, but that's going to be work, and assumes you have enough in there to make it worthwhile.

CydeWeys 7y ago
Penalties are waived for certain exigent circumstances, which I believe this would qualify as.
- SketchySeaBeast 7y ago
  The larger penalty would still probably be the taxes, which I assume aren't waved, and again assume there's enough in there to make it worthwhile. I know for myself, even though I've been diligently saving for my relatively short career, I don't think there is.
  - xyzzyz 7y ago
    You are going to pay those taxes anyway when you retire. 401k is only beneficial if you expect to pay lower tax rate when you finally retire. Unless you expect the federal tax rates to go significantly down across the board, withdrawing from 401k when you have no other income is actually a great idea, or it would be without the 10% penalty. However, you typically can borrow money from your 401k, and pay no penalty, which makes it a good option if you need temporary liquidity.
    - CydeWeys 7y ago
      And considering how early this pandemic hit in the year, if you were laid off in March you didn't even make 25% of your salary yet. That means your taxes are likely to be quite low for the year, so this is actually a good time to withdraw money from a 401k and take the tax hit. If I ever have a full year gap between jobs (like some kind of a long sabbatical), I'm going to be doing a lot of Traditional to Roth converting, for exactly this reason.

bo1024 7y ago

The idea of the 401k is such an amazing hustle for the wealthy. * Middle-class Americans consistently pump money into the stock market generically (not information trading), raising the value of all your stocks over time. * Now you have a gun to their head to support policies that pump up the value of your stocks even more. * Also, when shit hits the fan, they can't easily cash out, but you can. Both on a mega-scale (recession), and individual stocks (when companies tank, you sell first, and 401k index or diversified funds take a hit). I'm not an expert in this stuff but it smells from miles away.

ardy42 7y ago
> The idea of the 401k is such an amazing hustle for the wealthy. You make a very interesting point! I wonder what a "reverse 401k" program would look like (e.g. box the wealthy into aligning their actions with the interests poor/middle class while only marginally benefiting themselves).
- q92z8oeif 7y ago
  > aligning their actions with the interests poor/middle class Any attempt to recognize classes exits will lead to class war. Everyone is upper class, or waiting to join upper class, anytime now.
  - eli_gottlieb 7y ago
    Class war is good.
- SketchySeaBeast 7y ago
  Taxes?
- nitrogen 7y ago
  I wonder what a "reverse 401k" program would look like (e.g. box the wealthy into aligning their actions with the interests poor/middle class while only marginally benefiting themselves). Pensions? Those also don't seem to work all that well.