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Here's something that's telling. In the USA average wealth per adult is one of the highest in the world. This measures the wealth of a persons assets (car, hom

Here's something that's telling. In the USA average wealth per adult is one of the highest in the world. This measures the wealth of a persons assets (car, home, etc.) minus their debts. But the median wealth for the USA is much further down the list. The median is the midpoint so it excludes outliers like Bezos. It's common for Americans to boast about how rich they are but the honest truth is my home country Australia has a median wealth that's 3x greater than the USAs. The difference in wealth between the typical USA resident and an Australian resident is the same as the difference between a USA resident and a Chinese resident. Australian adult median wealth (USD $238k) USA adult median wealth (USD $79k) not poor but definitely not at the top. Slighly below Taiwan and South Korea. China adult median wealth (USD $24k) a similar difference. Honestly as an Australian living in the USA it does show. I get rather annoyed when a USA resident boasts about wealth. You have massive loans dickhead. You should have been fighting this problem and instituting 0% tax for the lowest wage earners like Australia did 40 years ago. You should have increased taxes on the rich. You should have increased minimum wage. But you didn't. And now your average American wealth, whilst not yet bad is below countries such as South Korea and Taiwan that have troubling neighbors that justify huge defence budgets. It's below Italy's which has long suffered corruption in politics. It's below Spains despite Spain being the cheap holiday destination for the wealthier European nations. Stop fucking around and fight the fight you should have fought 20 years ago. https://en.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...

ceejayoz 5y ago
I'm also an Australian living in the US; this omits the enormous, multi-decade, apparently recession-proof rise of the Australian real estate market a bit. https://en.wikipedia.org/wiki/Australian_property_bubble https://en.wikipedia.org/wiki/Australian_property_bubble
- AnotherGoodName 5y ago
  It doesn't change the median to mean discrepancy though. Australia has a smoother wealth divide and that's purely policy. I was shocked when i found out there's no 0% tax bracket in the USA. All that paperwork to collect tax from those who are struggling. Meanwhile the federal tax caps out at 37% and doesn't even consider very high wage earners. The higher minimum wages in Australia are also clear cut.
  - ceejayoz 5y ago
    OK, but you've highlighted the difference between US and AU median wealth; a lot of Australian wealth is tied up in this real estate. My relatives who own property (purchased cheap decades ago) can hop from enormously expensive house to enormously expensive house; the ones that don't can only dream of home ownership anywhere near a major city. There is functionally a 0% tax bracket in the US, because everyone gets a default tax deduction. In general, I agree with you - particularly in the realm of healthcare and college educations - but there's a lot of nuance in the details.
  - giantg2 5y ago
    "The higher minimum wages in Australia are also clear cut." Do you have any links to studies around this? From what I've heard of the past couple years, most economists believe only a marginal increase to around $10/hr would be beneficial. I'm not arguing against that, but $10/hr doesn't seem like it would afford those workers the opportunity to build wealth, and increasing it further is supposedly not going to provide any additional benefit to that group.
  - dntrkv 5y ago
    37% for federal, and another 13% in places like California, bringing it to 50% (vs 45% in Australia)
    - seanmcdirmid 5y ago
      Do you understand how marginal tax rates work? Let's say you make $1,000,000 a year in California. Your effective tax rate is 11.78 percent because the top 12.3% rate is only applied to income you earned over $599k. (13.3% applies only on income above $1,000,000, which you are too poor to pay yet). Same with federal taxes, that $1,000,000 earner is going to pay an effective rate of 33.3%. Combined, you are paying 45% state and federal income tax.
      - dntrkv 5y ago
        ...Yes I understand how they work, thank you very much. In California, the highest possible tax rate on earnings, would be 50%. In Australia that tax on the highest earnings would be 45%. Nowhere did I claim that all your income is taxed at the same rate. I was replying to the quote "federal tax caps out at 37%" which ignores the significant 13% additional tax in CA.
- dntrkv 5y ago
  Exactly what I was going to reference. An Aussie with a $1M home, and a $500k mortgage will have $500k in "wealth." But if that wealth is tied to their home, and all other homes cost the same or more, what good does that do them? We're seeing the same happen in many US cities.
  - kiba 5y ago
    Is wealth in a home an illusion, then?
    - ceejayoz 5y ago
      To some extent, yes. It's fairly illiquid, and unless you're willing to be homeless, move from the city to a rural area, or take a serious cut in living style, you're likely going to need to buy a replacement at similar cost. It's certainly not the same thing as having that wealth in the bank, or as stocks.
      - annoyingnoob 5y ago
        It does help with loans.
        ceejayoz 5y ago
        If I take a $100k loan, my wealth doesn't go up $100k.
        annoyingnoob 5y ago
        To the OP's question, the value in a home is not an illusion if you can do things like borrow against it.
    - lowercased 5y ago
      maybe not a full 'illusion', but it's just not liquid. when using 'net worth' calculators, I severely underestimate the value of my home - between delays, fees in selling, and the cost of moving someplace else, there's probably 10-15% gone from whatever paper 'wealth' the raw number is. It doesn't really help me in any meaningful way with respect to planning. Most of my stocks are liquid. There's a potentially similar hit re: taxes, but... I can buy and sell $1000 of stocks tomorrow, I can't buy/sell $1000 of 'house' tomorrow (REITs notwithstanding).
- fulafel 5y ago
  Like the first sentence at the WP article says, > The Australian property bubble is the economic theory that the Australian property market has become or is becoming significantly overpriced [...] IOW bubbles can only be called historically asset prices fall dramatically and even then typically in housing they don't fall that much. Housing prices have been rising much faster than inflation in a lot of places due to historically cheap financing. The alternatives to "bubble popping" are that they plateau, or continue rising, or decrease moderately over time.
  - ceejayoz 5y ago
    The point is that the difference in wealth between AU and US is, to at least some extent, due to a vast amount of largely inaccessible paper wealth. If I'm willing to sell my house in Sydney and move to rural Queensland, I'm wealthy. If I'm not, selling my $1M house means I have to go find another $1M house now. (And yes, the median house price in Sydney is over $1M.)
    - fulafel 5y ago
      I think big cities have diverged from the country average globally and the impact on country average metrics then depends on the degree of urbanization. According to https://en.wikipedia.org/wiki/Urbanization_by_country https://en.wikipedia.org/wiki/Urbanization_by_country the urbanization rate in AU is ~2x the US, so people are moving to cities at a much bigger rate? Even in the face of the high prices. But yep I still see what you mean, on the country-averages level the AU prices seem to have been constantly rising faster in AU than US.
      - ceejayoz 5y ago
        The median home price in Melbourne is nearly $1M as well; between the two cities, that's about 40% of the population of Australia that needs a million bucks to own a house.
andrewl 5y ago
Billionaire Nick Hanauer and his team at Civic Ventures are working towards this (as are others, of course): https://civic-ventures.com/ https://civic-ventures.com/ There are powerful forces fighting against what AnotherGoodName is suggesting. They have money and propaganda and lobbying. It’s a tough fight.
deleted 5y ago
[deleted]
dfxm12 5y ago
Most Americans are fighting for things besides their financial well being, unfortunately. Some would rather have the freedom to sue a stranger who may have driven a woman to get an abortion in Texas. It is disheartening that this is what the political machine is focused on, instead of raising money and investing in things like infrastructure and Americans. Although, some do think that the only thing standing between them and wealth like Bezos is a few hundred bucks a year in taxes (that they want to cut, ramifications be damned).
- paulpauper 5y ago
  s disheartening that this is what the political machine is focused on, instead of raising money and investing in things like infrastructure. https://www.nytimes.com/2021/03/31/business/economy/biden-infrastructure-plan.html https://www.nytimes.com/2021/03/31/business/economy/biden-in...
scottwhudson 5y ago
I don’t disagree with this sentiment, however, American culture explicitly drives what you’re describing here. There’s really no money to be made by battling inequality and people want to become wealthy more than they want to live in an equitable society. Because once you’ve become wealthy, you get to join the ranks of the privileged few that have the ability to make the choice that Dan Price made, but they don’t. I remember reading once that America is the land of the frustrated wannabe millionaire, and it’s kinda true. We’re all on a warpath to make a ton of money with no real incentive to fight the fight you’re talking about.
- paulpauper 5y ago
  lottery mindset
- the-dude 5y ago
  You sure as hell don't want to pay too much tax once you are a millionaire.
giantg2 5y ago
"instituting 0% tax for the lowest wage earners" Well, we do for income tax. It's just that the cut off limit is extremely low ($12k). Based on tax credits, one can even pay $0 in tax and get money back.
- throwaway0a5e 5y ago
  If we were serious about reducing the tax burden on the poor regressive state and local taxes would be on the chopping block. Nobody ever complains about sales tax (which is the quintessential regressive tax) until you get deep in the weeds of policy discussion.
  - giantg2 5y ago
    A state removing taxes - that'll be the day! It's always more more more. Some sales taxes have been sort of progressive. I don't know the current details but years ago the first $10k on a vehicle purchase was excluded. This was at a time when average/cheaper cars cost under that. Theoretically, that only impacts the wealthy people buying luxury cars. Of course I don't think they ever adjusted it for inflation and they may have even removed that exclusion. But yeah, it's mostly regressive. I do hear people complain about sales tax sometimes. I think many people agree that the best kind of tax would be on money inflow (income, capital gains) rather than things like property, sales, etc. I think the implementation is the part nobody can agree on.
    - imtringued 5y ago
      I disagree. All transaction based taxes are regressive and most of them can be easily dodged by avoiding taxable events. There is absolutely zero reason to tax any form of work whatsoever. From a theoretical standpoint the best taxes would be on monopolies that extract economic rent and taxes on externalities. The prime candidates are the land value tax and carbon tax.
      - giantg2 5y ago
        "There is absolutely zero reason to tax any form of work whatsoever." Can you expand on that? Does that include capital investment if one meets the loose "materially participated" stipulation? "The prime candidates are the land value tax and carbon tax." This doesn't seem like a good idea. A carbon tax is transactional, so it could be avoided. Maybe good for policy implementation but not good for revenue. Land tax seems very similar to property tax already. We are seeing pushes in many states to eliminate it due to the high burden on lower income families and the elderly. For example, you may be taxing them on "wealth" that doesn't exist. This places the government in a position to take assets someone already owns. It's also mostly regressive as property tax is now. If you tax the inflow of money, then you know there is money that can be paid and can even be collected before the person ever receives it.
vogt 5y ago
Huh! With all that vitriol, I would sure hope the unparalleled salary for software people is not the reason why you migrated (and continue to stay) here.
- mikepurvis 5y ago
  This is the "if you don't like having money, you be the first to give it all away, lol" strawman. It's not that me or anyone else wants higher taxes. We're willing to accept higher taxes for the benefits of living in a higher-taxes-for-the-wealthy society, specifically: a) enjoying high quality infrastructure, particularly around education, healthcare, and transportation, and b) getting to live in a place where the poorest are being properly cared for and have a path to reintegration, rather than being stuck on the street reminding you every day that society has failed them, and might fail you or your kids one day too. You can't get either of these by giving away your own money, especially if you're only upper middle class.
  - vogt 5y ago
    You referring to it as a strawman is the only strawman in this argument now, if we're being technical about the definition of strawman. People migrate from countries like Australia, or sit in their armchairs in Sweden and expect the US be on par with X or Y social infrastructure and rage perpetually at the citizens (like the GP, which prompted my response) when they find this isn't the case. Why is it reasonable for the US to align social policy to every European or South Pacific developed nation when the scale of the US is not even remotely comparable? What is the philosophy 101 term for that level of delusion? And why is OP justified in spitting venom at the citizens? Get real.
- AnotherGoodName 5y ago
  It's not some "haha i got you!" for me to move to the USA to be in the top 1% of wage earners in the USA (high level within FAANG). I'm in a very privileged position and I'm happy to take advantage of it. It's weird that the existence of ultra privileged positions somehow gives you the thought that therefore America is fine the way it is. It's clear for the remainder of America they'd be better off elsewhere in the western world. They'd be better off fighting for their situation.
seanmcdirmid 5y ago
> I get rather annoyed when a USA resident boasts about wealth. You have massive loans dickhead. Isn't much of Australian household wealth built on surging property prices? Which is also backed by the same massive loans that Americans are dealing with? And also, the Australian government is forced to keep the property bubble going at all costs, even more so than the American government? https://www.ratecity.com.au/home-loans/mortgage-news/rba-governor-won-t-raise-rates-cool-house-prices https://www.ratecity.com.au/home-loans/mortgage-news/rba-gov...
CivBase 5y ago
According to the Australian Bureau of Statistics, median total income for Australians in 2017-2018 was 49,805 AUD (68,232 USD)[0]. According to the US Census Bureau, median total income for Americans in 2018 was 63,179 USD. That's about 7.4% less which isn't insignificant, but it's also not near enough to account for such a striking difference in wealth. There's clearly something else going on here. [0] https://www.abs.gov.au/statistics/labour/earnings-and-work-hours/personal-income-australia/latest-release https://www.abs.gov.au/statistics/labour/earnings-and-work-h... (Table 1) [1] https://www.census.gov/data/tables/2019/demo/income-poverty/p60-266.html https://www.census.gov/data/tables/2019/demo/income-poverty/... (Table A-1)
- pb7 5y ago
  >49,805 AUD (68,232 USD) 49,805 AUD is 37,039 USD.
  - CivBase 5y ago
    Woops, you're absolutely right. I had the division flipped. Then that's a considerable amount lower than the US median income, which makes the difference in median wealth even more suspicious.
lbrito 5y ago
>You should have increased taxes on the rich. You should have increased minimum wage. Pretty obvious and orthodox solution, tried and tested worldwide in the last century, however: it goes against neoliberal creed and thus is anathema since the 80s. Once upon a time (war time) the US had 94% top tax bracket[1]. Let that sink it. Obviously there's no WW2 right now, and that extreme level of confiscation is probably unwarranted. But it makes you think how far the US has strayed and how impossible any slightly more progressive tax brackets seem today. [1] https://teachinghistory.org/history-content/ask-a-historian/24489 https://teachinghistory.org/history-content/ask-a-historian/...
m_ke 5y ago
Visualized in one chart: https://ritholtz.com/wp-content/uploads/2018/08/inequality.jpg https://ritholtz.com/wp-content/uploads/2018/08/inequality.j...
- yardie 5y ago
  Wow, you can really see the top 1% being affected by major financial events: '92 recession, '01 dot bomb, '09 global financial crisis. Meanwhile, the bottom 50% is just a slow downward slide, not majorly affected by any of those.
  - m_ke 5y ago
    Wait till you see the impact of quantitative easing and the K shaped recovery: https://static01.nyt.com/images/2021/07/09/us/covid-fed-qe-promo-1625877657147/covid-fed-qe-promo-1625877657147-videoSixteenByNineJumbo1600-v3.png https://static01.nyt.com/images/2021/07/09/us/covid-fed-qe-p... https://www.nytimes.com/interactive/2021/07/12/opinion/covid-fed-qe-inequality.html https://www.nytimes.com/interactive/2021/07/12/opinion/covid...
- AnotherGoodName 5y ago
  That makes it clear. For a reference I've been in between the USA and Australia since first coming to the USA in 1997. The change in wealth of the USA is dramatic. Things were never as extreme in terms of the 3 miles of homeless camps i see in SFO just North of Kings st station. I've never seen so many sleeping under bridges in the valley are itself. Things have objectively taken a downturn in the USA for the bottom 50% but somehow there's push back against this fact? People are arguing against numbers in this thread.
  - AnotherGoodName 5y ago
    Perhaps the difference is that since I've been between two countries i haven't suffered the frog in a boiling pot of water effect? To me i leave and come back half a decade later and see huge downwards changes and get frustrated that no one else is noticing :(
Aunche 5y ago
America's low ranking in median wealth is mostly caused by their high amount of consumer spending rather than a lack of income. America ranks #4 in median income. The only nations that rank higher are tiny countries with whose economies are disproportionately propped up by a single highly lucrative industry (financial services or fossil fuels). To be fair, the high amount of consumer spending partially boosts America's median income as well. https://en.wikipedia.org/wiki/Median_income https://en.wikipedia.org/wiki/Median_income
- AnotherGoodName 5y ago
  I'd argue that there's other causes of spending. Education, health care, etc. If you consistently earn more but have less total wealth that to me reeks of the broken window fallacy. There's spending that could be done via more efficient means. eg. Australia spends less tax on healthcare per capita. America spends more tax and then on top of that essentially has a private insurance requirement as well. That's spending that doesn't need to happen but does due to inefficiencies. You could get rid of this but apparently efficiency created by government intervention is socialism (it's not but the USA political system is a mess and people have been swayed).
chamsom 5y ago
First, I don't disagree with your general conclusions, but the median salary of South Korea is not even close to the United States. It is closer to 30K annual. Taiwan is lower. Maybe for an expat it may seem higher, but if you get paid by a Korean company in accordance with local salaries, it doesn't get close to that.
throwaway09223 5y ago
The trouble with comparisons like this is the lack of scale and perspective. Australia and Taiwan are roughly half the size of California. The United States has a far larger size, and a far greater regional diversity. If you draw comparisons across similar population sizes and similar geographic regions, for example comparing the USA to all of Europe, the numbers look a lot more similar: Europe median: $26k Europe mean: $174k USA media: $82k USA mean: $505k Both regions have roughly a factor of 6 difference between median and mean wealth.
hindsightbias 5y ago
Reagon won. The top rax rate on ordinary income went from 70% to 28%, while the bottom rate went from 11% to 15%. We’re still living in his world.
rufus_foreman 5y ago
>> Honestly as an Australian living in the USA it does show. I get rather annoyed when a USA resident boasts about wealth. You have massive loans dickhead Australia has the second highest household debt to GDP ratio in the world, second to Switzerland. The US isn't in the top 10: https://en.wikipedia.org/wiki/List_of_countries_by_household_debt https://en.wikipedia.org/wiki/List_of_countries_by_household.... As others have pointed out, a large part of this is due to increasing house prices, and it is fairly recent: "Australian household debt levels have increased substantially over the past thirty years, with the ratio of household debt to annual disposable income rising from 68% in June 1990 to a recent peak of 188.5% in June 2019. Since June last year, the ratio has reduced slightly to 185.0%. Most of the debt held by households is housing debt, which comprises around 76% of overall household debt. Thirty years ago housing debt comprised a much smaller 46% of overall household debt. ... Most of Australia’s household debt accrual occurred between 1990 and 2010. The ratio of household debt to income increased by 45.7 percentage points between 1990 and 2000, and by another 49.3 percentage points between 2000 and 2010. The past decade has seen growth in the ratio more than half to 21.5 percentage points, with most of that growth aligned with the property boom between late 2012 and 2017. Importantly, the value of assets held against the debt has recorded a more significant increase, pushing household net worth to new record highs at the end of 2019. Residential dwellings comprise by far the largest component of household assets, totaling $6.8 trillion, or 53% of household wealth." -- https://www.macrobusiness.com.au/2020/11/could-australias-high-mortgage-debt-lead-to-credit-tightening/ https://www.macrobusiness.com.au/2020/11/could-australias-hi... Australians took on massive debt to buy houses at increasing prices. As long as prices keep going up, their wealth increases. And what are they doing with that wealth increase? "not all of that housing debt has simply been used to buy homes — many people have been cashing in on the rising value of their properties over the past two decades. 'Even for people who don't buy and sell a home, and stay in the one place, we're finding between 30 and 40 per cent of these people are increasing their debt from one year to the next,' Professor Wilkins says. 'When people are increasing their debt from one year to the next, they're essentially accessing the equity in their home ... people are evidently using that increased equity to fund consumption." -- https://www.abc.net.au/news/2019-10-18/household-debt-leaves-australians-working-longer-spending-less/11608016 https://www.abc.net.au/news/2019-10-18/household-debt-leaves... As long as prices keep going up, it will be fine. But I suspect I know how this story ends.
France_is_bacon 5y ago
I'd like to see each country's median wealth per adult by purchasing power parity. Anyone got that number? I looked online but can't find anything. Purchasing power parity is the thing that interests me the most and gives a more realistic picture. For example, we have all been fed the utter lie that the USA spends more on military spending than the next 252,895 countries combined. This does not take into account that a welder in the USA might be paid $52/hour (or whatever it is for a union welder) but a welder in China might be paid $8/hour. So if an aircraft carrier is being built, it will cost $13 billion in the USA, but $500 million in China. So when you add all the billions together for the USA, and for China, of course the USA is going to spend more in absolute dollars, but in what they get, an aircraft carrier is an aircraft carrier no matter what is spend, no matter if it is $500 million or $13 billion per carrier. This is the purchasing power parity (PPP) which more accurately reflects what you get for your monies. So when you look at military spending by PPP, the USA only spends more than the 2.5 countries. The USA spends $750 billion. China spends $464 billion and India spends $234 billion = $698 billion for China and India. Adding the third highest spender, Saudi Arabia for $174 billion brings the total up to $872 billion in expenditures for the top 3 countries vs USA's $750 billion. However, this number is probably skewed, because some of the USA's military spend goes towards the defense of other countries. This expenditure should be reallocated to the countries that benefit. For instance, Canada isn't even on the list. Why would it be? USA would take on 100% of any Canadian military needs. The USA has a huge military presence in Japan, Australia, South Korea. All of Europe is under the USA's umbrella. It is eye popping that when you look at the GDP PPP of each country, that China's GDP PPP is $23 trillion and the USA is $19 trillion. Here are the numbers if anyone is interested: https://www.globalsecurity.org/military/world/spending.htm https://www.globalsecurity.org/military/world/spending.htm Here are the numbers if one goes by the absolute dollar figures, which I know that you will now understand is incorrect: https://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures https://en.wikipedia.org/wiki/List_of_countries_by_military_... This is just to illustrate the difference when talking about numbers in purchasing power parity. As I said, I would be interested in a PPP of the median wealth of every nation. Which I have not been able to find. I'm sure the USA would not be very good on that chart, either, but I would be interested in seeing how it changes everything and how everything would be rearranged. So if anyone has this info, please post below my comment here.

ceejayoz 5y ago

I'm also an Australian living in the US; this omits the enormous, multi-decade, apparently recession-proof rise of the Australian real estate market a bit. https://en.wikipedia.org/wiki/Australian_property_bubble https://en.wikipedia.org/wiki/Australian_property_bubble

AnotherGoodName 5y ago
It doesn't change the median to mean discrepancy though. Australia has a smoother wealth divide and that's purely policy. I was shocked when i found out there's no 0% tax bracket in the USA. All that paperwork to collect tax from those who are struggling. Meanwhile the federal tax caps out at 37% and doesn't even consider very high wage earners. The higher minimum wages in Australia are also clear cut.
- ceejayoz 5y ago
  OK, but you've highlighted the difference between US and AU median wealth; a lot of Australian wealth is tied up in this real estate. My relatives who own property (purchased cheap decades ago) can hop from enormously expensive house to enormously expensive house; the ones that don't can only dream of home ownership anywhere near a major city. There is functionally a 0% tax bracket in the US, because everyone gets a default tax deduction. In general, I agree with you - particularly in the realm of healthcare and college educations - but there's a lot of nuance in the details.
- giantg2 5y ago
  "The higher minimum wages in Australia are also clear cut." Do you have any links to studies around this? From what I've heard of the past couple years, most economists believe only a marginal increase to around $10/hr would be beneficial. I'm not arguing against that, but $10/hr doesn't seem like it would afford those workers the opportunity to build wealth, and increasing it further is supposedly not going to provide any additional benefit to that group.
- dntrkv 5y ago
  37% for federal, and another 13% in places like California, bringing it to 50% (vs 45% in Australia)
  - seanmcdirmid 5y ago
    Do you understand how marginal tax rates work? Let's say you make $1,000,000 a year in California. Your effective tax rate is 11.78 percent because the top 12.3% rate is only applied to income you earned over $599k. (13.3% applies only on income above $1,000,000, which you are too poor to pay yet). Same with federal taxes, that $1,000,000 earner is going to pay an effective rate of 33.3%. Combined, you are paying 45% state and federal income tax.
    - dntrkv 5y ago
      ...Yes I understand how they work, thank you very much. In California, the highest possible tax rate on earnings, would be 50%. In Australia that tax on the highest earnings would be 45%. Nowhere did I claim that all your income is taxed at the same rate. I was replying to the quote "federal tax caps out at 37%" which ignores the significant 13% additional tax in CA.
dntrkv 5y ago
Exactly what I was going to reference. An Aussie with a $1M home, and a $500k mortgage will have $500k in "wealth." But if that wealth is tied to their home, and all other homes cost the same or more, what good does that do them? We're seeing the same happen in many US cities.
- kiba 5y ago
  Is wealth in a home an illusion, then?
  - ceejayoz 5y ago
    To some extent, yes. It's fairly illiquid, and unless you're willing to be homeless, move from the city to a rural area, or take a serious cut in living style, you're likely going to need to buy a replacement at similar cost. It's certainly not the same thing as having that wealth in the bank, or as stocks.
    - annoyingnoob 5y ago
      It does help with loans.
      - ceejayoz 5y ago
        If I take a $100k loan, my wealth doesn't go up $100k.
        annoyingnoob 5y ago
        To the OP's question, the value in a home is not an illusion if you can do things like borrow against it.
  - lowercased 5y ago
    maybe not a full 'illusion', but it's just not liquid. when using 'net worth' calculators, I severely underestimate the value of my home - between delays, fees in selling, and the cost of moving someplace else, there's probably 10-15% gone from whatever paper 'wealth' the raw number is. It doesn't really help me in any meaningful way with respect to planning. Most of my stocks are liquid. There's a potentially similar hit re: taxes, but... I can buy and sell $1000 of stocks tomorrow, I can't buy/sell $1000 of 'house' tomorrow (REITs notwithstanding).
fulafel 5y ago
Like the first sentence at the WP article says, > The Australian property bubble is the economic theory that the Australian property market has become or is becoming significantly overpriced [...] IOW bubbles can only be called historically asset prices fall dramatically and even then typically in housing they don't fall that much. Housing prices have been rising much faster than inflation in a lot of places due to historically cheap financing. The alternatives to "bubble popping" are that they plateau, or continue rising, or decrease moderately over time.
- ceejayoz 5y ago
  The point is that the difference in wealth between AU and US is, to at least some extent, due to a vast amount of largely inaccessible paper wealth. If I'm willing to sell my house in Sydney and move to rural Queensland, I'm wealthy. If I'm not, selling my $1M house means I have to go find another $1M house now. (And yes, the median house price in Sydney is over $1M.)
  - fulafel 5y ago
    I think big cities have diverged from the country average globally and the impact on country average metrics then depends on the degree of urbanization. According to https://en.wikipedia.org/wiki/Urbanization_by_country https://en.wikipedia.org/wiki/Urbanization_by_country the urbanization rate in AU is ~2x the US, so people are moving to cities at a much bigger rate? Even in the face of the high prices. But yep I still see what you mean, on the country-averages level the AU prices seem to have been constantly rising faster in AU than US.
    - ceejayoz 5y ago
      The median home price in Melbourne is nearly $1M as well; between the two cities, that's about 40% of the population of Australia that needs a million bucks to own a house.

andrewl 5y ago

Billionaire Nick Hanauer and his team at Civic Ventures are working towards this (as are others, of course): https://civic-ventures.com/ https://civic-ventures.com/ There are powerful forces fighting against what AnotherGoodName is suggesting. They have money and propaganda and lobbying. It’s a tough fight.

deleted 5y ago

[deleted]

dfxm12 5y ago

Most Americans are fighting for things besides their financial well being, unfortunately. Some would rather have the freedom to sue a stranger who may have driven a woman to get an abortion in Texas. It is disheartening that this is what the political machine is focused on, instead of raising money and investing in things like infrastructure and Americans. Although, some do think that the only thing standing between them and wealth like Bezos is a few hundred bucks a year in taxes (that they want to cut, ramifications be damned).

paulpauper 5y ago
s disheartening that this is what the political machine is focused on, instead of raising money and investing in things like infrastructure. https://www.nytimes.com/2021/03/31/business/economy/biden-infrastructure-plan.html https://www.nytimes.com/2021/03/31/business/economy/biden-in...

scottwhudson 5y ago

I don’t disagree with this sentiment, however, American culture explicitly drives what you’re describing here. There’s really no money to be made by battling inequality and people want to become wealthy more than they want to live in an equitable society. Because once you’ve become wealthy, you get to join the ranks of the privileged few that have the ability to make the choice that Dan Price made, but they don’t. I remember reading once that America is the land of the frustrated wannabe millionaire, and it’s kinda true. We’re all on a warpath to make a ton of money with no real incentive to fight the fight you’re talking about.

paulpauper 5y ago
lottery mindset
the-dude 5y ago
You sure as hell don't want to pay too much tax once you are a millionaire.

giantg2 5y ago

"instituting 0% tax for the lowest wage earners" Well, we do for income tax. It's just that the cut off limit is extremely low ($12k). Based on tax credits, one can even pay $0 in tax and get money back.

throwaway0a5e 5y ago
If we were serious about reducing the tax burden on the poor regressive state and local taxes would be on the chopping block. Nobody ever complains about sales tax (which is the quintessential regressive tax) until you get deep in the weeds of policy discussion.
- giantg2 5y ago
  A state removing taxes - that'll be the day! It's always more more more. Some sales taxes have been sort of progressive. I don't know the current details but years ago the first $10k on a vehicle purchase was excluded. This was at a time when average/cheaper cars cost under that. Theoretically, that only impacts the wealthy people buying luxury cars. Of course I don't think they ever adjusted it for inflation and they may have even removed that exclusion. But yeah, it's mostly regressive. I do hear people complain about sales tax sometimes. I think many people agree that the best kind of tax would be on money inflow (income, capital gains) rather than things like property, sales, etc. I think the implementation is the part nobody can agree on.
  - imtringued 5y ago
    I disagree. All transaction based taxes are regressive and most of them can be easily dodged by avoiding taxable events. There is absolutely zero reason to tax any form of work whatsoever. From a theoretical standpoint the best taxes would be on monopolies that extract economic rent and taxes on externalities. The prime candidates are the land value tax and carbon tax.
    - giantg2 5y ago
      "There is absolutely zero reason to tax any form of work whatsoever." Can you expand on that? Does that include capital investment if one meets the loose "materially participated" stipulation? "The prime candidates are the land value tax and carbon tax." This doesn't seem like a good idea. A carbon tax is transactional, so it could be avoided. Maybe good for policy implementation but not good for revenue. Land tax seems very similar to property tax already. We are seeing pushes in many states to eliminate it due to the high burden on lower income families and the elderly. For example, you may be taxing them on "wealth" that doesn't exist. This places the government in a position to take assets someone already owns. It's also mostly regressive as property tax is now. If you tax the inflow of money, then you know there is money that can be paid and can even be collected before the person ever receives it.

vogt 5y ago

Huh! With all that vitriol, I would sure hope the unparalleled salary for software people is not the reason why you migrated (and continue to stay) here.

mikepurvis 5y ago
This is the "if you don't like having money, you be the first to give it all away, lol" strawman. It's not that me or anyone else wants higher taxes. We're willing to accept higher taxes for the benefits of living in a higher-taxes-for-the-wealthy society, specifically: a) enjoying high quality infrastructure, particularly around education, healthcare, and transportation, and b) getting to live in a place where the poorest are being properly cared for and have a path to reintegration, rather than being stuck on the street reminding you every day that society has failed them, and might fail you or your kids one day too. You can't get either of these by giving away your own money, especially if you're only upper middle class.
- vogt 5y ago
  You referring to it as a strawman is the only strawman in this argument now, if we're being technical about the definition of strawman. People migrate from countries like Australia, or sit in their armchairs in Sweden and expect the US be on par with X or Y social infrastructure and rage perpetually at the citizens (like the GP, which prompted my response) when they find this isn't the case. Why is it reasonable for the US to align social policy to every European or South Pacific developed nation when the scale of the US is not even remotely comparable? What is the philosophy 101 term for that level of delusion? And why is OP justified in spitting venom at the citizens? Get real.
AnotherGoodName 5y ago
It's not some "haha i got you!" for me to move to the USA to be in the top 1% of wage earners in the USA (high level within FAANG). I'm in a very privileged position and I'm happy to take advantage of it. It's weird that the existence of ultra privileged positions somehow gives you the thought that therefore America is fine the way it is. It's clear for the remainder of America they'd be better off elsewhere in the western world. They'd be better off fighting for their situation.

seanmcdirmid 5y ago

> I get rather annoyed when a USA resident boasts about wealth. You have massive loans dickhead. Isn't much of Australian household wealth built on surging property prices? Which is also backed by the same massive loans that Americans are dealing with? And also, the Australian government is forced to keep the property bubble going at all costs, even more so than the American government? https://www.ratecity.com.au/home-loans/mortgage-news/rba-governor-won-t-raise-rates-cool-house-prices https://www.ratecity.com.au/home-loans/mortgage-news/rba-gov...

CivBase 5y ago

According to the Australian Bureau of Statistics, median total income for Australians in 2017-2018 was 49,805 AUD (68,232 USD)[0]. According to the US Census Bureau, median total income for Americans in 2018 was 63,179 USD. That's about 7.4% less which isn't insignificant, but it's also not near enough to account for such a striking difference in wealth. There's clearly something else going on here. [0] https://www.abs.gov.au/statistics/labour/earnings-and-work-hours/personal-income-australia/latest-release https://www.abs.gov.au/statistics/labour/earnings-and-work-h... (Table 1) [1] https://www.census.gov/data/tables/2019/demo/income-poverty/p60-266.html https://www.census.gov/data/tables/2019/demo/income-poverty/... (Table A-1)

pb7 5y ago
>49,805 AUD (68,232 USD) 49,805 AUD is 37,039 USD.
- CivBase 5y ago
  Woops, you're absolutely right. I had the division flipped. Then that's a considerable amount lower than the US median income, which makes the difference in median wealth even more suspicious.

lbrito 5y ago

>You should have increased taxes on the rich. You should have increased minimum wage. Pretty obvious and orthodox solution, tried and tested worldwide in the last century, however: it goes against neoliberal creed and thus is anathema since the 80s. Once upon a time (war time) the US had 94% top tax bracket[1]. Let that sink it. Obviously there's no WW2 right now, and that extreme level of confiscation is probably unwarranted. But it makes you think how far the US has strayed and how impossible any slightly more progressive tax brackets seem today. [1] https://teachinghistory.org/history-content/ask-a-historian/24489 https://teachinghistory.org/history-content/ask-a-historian/...

m_ke 5y ago

Visualized in one chart: https://ritholtz.com/wp-content/uploads/2018/08/inequality.jpg https://ritholtz.com/wp-content/uploads/2018/08/inequality.j...

yardie 5y ago
Wow, you can really see the top 1% being affected by major financial events: '92 recession, '01 dot bomb, '09 global financial crisis. Meanwhile, the bottom 50% is just a slow downward slide, not majorly affected by any of those.
- m_ke 5y ago
  Wait till you see the impact of quantitative easing and the K shaped recovery: https://static01.nyt.com/images/2021/07/09/us/covid-fed-qe-promo-1625877657147/covid-fed-qe-promo-1625877657147-videoSixteenByNineJumbo1600-v3.png https://static01.nyt.com/images/2021/07/09/us/covid-fed-qe-p... https://www.nytimes.com/interactive/2021/07/12/opinion/covid-fed-qe-inequality.html https://www.nytimes.com/interactive/2021/07/12/opinion/covid...
AnotherGoodName 5y ago
That makes it clear. For a reference I've been in between the USA and Australia since first coming to the USA in 1997. The change in wealth of the USA is dramatic. Things were never as extreme in terms of the 3 miles of homeless camps i see in SFO just North of Kings st station. I've never seen so many sleeping under bridges in the valley are itself. Things have objectively taken a downturn in the USA for the bottom 50% but somehow there's push back against this fact? People are arguing against numbers in this thread.
- AnotherGoodName 5y ago
  Perhaps the difference is that since I've been between two countries i haven't suffered the frog in a boiling pot of water effect? To me i leave and come back half a decade later and see huge downwards changes and get frustrated that no one else is noticing :(

Aunche 5y ago

America's low ranking in median wealth is mostly caused by their high amount of consumer spending rather than a lack of income. America ranks #4 in median income. The only nations that rank higher are tiny countries with whose economies are disproportionately propped up by a single highly lucrative industry (financial services or fossil fuels). To be fair, the high amount of consumer spending partially boosts America's median income as well. https://en.wikipedia.org/wiki/Median_income https://en.wikipedia.org/wiki/Median_income

AnotherGoodName 5y ago
I'd argue that there's other causes of spending. Education, health care, etc. If you consistently earn more but have less total wealth that to me reeks of the broken window fallacy. There's spending that could be done via more efficient means. eg. Australia spends less tax on healthcare per capita. America spends more tax and then on top of that essentially has a private insurance requirement as well. That's spending that doesn't need to happen but does due to inefficiencies. You could get rid of this but apparently efficiency created by government intervention is socialism (it's not but the USA political system is a mess and people have been swayed).

chamsom 5y ago

First, I don't disagree with your general conclusions, but the median salary of South Korea is not even close to the United States. It is closer to 30K annual. Taiwan is lower. Maybe for an expat it may seem higher, but if you get paid by a Korean company in accordance with local salaries, it doesn't get close to that.

throwaway09223 5y ago

The trouble with comparisons like this is the lack of scale and perspective. Australia and Taiwan are roughly half the size of California. The United States has a far larger size, and a far greater regional diversity. If you draw comparisons across similar population sizes and similar geographic regions, for example comparing the USA to all of Europe, the numbers look a lot more similar: Europe median: $26k Europe mean: $174k USA media: $82k USA mean: $505k Both regions have roughly a factor of 6 difference between median and mean wealth.

hindsightbias 5y ago

Reagon won. The top rax rate on ordinary income went from 70% to 28%, while the bottom rate went from 11% to 15%. We’re still living in his world.

rufus_foreman 5y ago

>> Honestly as an Australian living in the USA it does show. I get rather annoyed when a USA resident boasts about wealth. You have massive loans dickhead Australia has the second highest household debt to GDP ratio in the world, second to Switzerland. The US isn't in the top 10: https://en.wikipedia.org/wiki/List_of_countries_by_household_debt https://en.wikipedia.org/wiki/List_of_countries_by_household.... As others have pointed out, a large part of this is due to increasing house prices, and it is fairly recent: "Australian household debt levels have increased substantially over the past thirty years, with the ratio of household debt to annual disposable income rising from 68% in June 1990 to a recent peak of 188.5% in June 2019. Since June last year, the ratio has reduced slightly to 185.0%. Most of the debt held by households is housing debt, which comprises around 76% of overall household debt. Thirty years ago housing debt comprised a much smaller 46% of overall household debt. ... Most of Australia’s household debt accrual occurred between 1990 and 2010. The ratio of household debt to income increased by 45.7 percentage points between 1990 and 2000, and by another 49.3 percentage points between 2000 and 2010. The past decade has seen growth in the ratio more than half to 21.5 percentage points, with most of that growth aligned with the property boom between late 2012 and 2017. Importantly, the value of assets held against the debt has recorded a more significant increase, pushing household net worth to new record highs at the end of 2019. Residential dwellings comprise by far the largest component of household assets, totaling $6.8 trillion, or 53% of household wealth." -- https://www.macrobusiness.com.au/2020/11/could-australias-high-mortgage-debt-lead-to-credit-tightening/ https://www.macrobusiness.com.au/2020/11/could-australias-hi... Australians took on massive debt to buy houses at increasing prices. As long as prices keep going up, their wealth increases. And what are they doing with that wealth increase? "not all of that housing debt has simply been used to buy homes — many people have been cashing in on the rising value of their properties over the past two decades. 'Even for people who don't buy and sell a home, and stay in the one place, we're finding between 30 and 40 per cent of these people are increasing their debt from one year to the next,' Professor Wilkins says. 'When people are increasing their debt from one year to the next, they're essentially accessing the equity in their home ... people are evidently using that increased equity to fund consumption." -- https://www.abc.net.au/news/2019-10-18/household-debt-leaves-australians-working-longer-spending-less/11608016 https://www.abc.net.au/news/2019-10-18/household-debt-leaves... As long as prices keep going up, it will be fine. But I suspect I know how this story ends.

France_is_bacon 5y ago

I'd like to see each country's median wealth per adult by purchasing power parity. Anyone got that number? I looked online but can't find anything. Purchasing power parity is the thing that interests me the most and gives a more realistic picture. For example, we have all been fed the utter lie that the USA spends more on military spending than the next 252,895 countries combined. This does not take into account that a welder in the USA might be paid $52/hour (or whatever it is for a union welder) but a welder in China might be paid $8/hour. So if an aircraft carrier is being built, it will cost $13 billion in the USA, but $500 million in China. So when you add all the billions together for the USA, and for China, of course the USA is going to spend more in absolute dollars, but in what they get, an aircraft carrier is an aircraft carrier no matter what is spend, no matter if it is $500 million or $13 billion per carrier. This is the purchasing power parity (PPP) which more accurately reflects what you get for your monies. So when you look at military spending by PPP, the USA only spends more than the 2.5 countries. The USA spends $750 billion. China spends $464 billion and India spends $234 billion = $698 billion for China and India. Adding the third highest spender, Saudi Arabia for $174 billion brings the total up to $872 billion in expenditures for the top 3 countries vs USA's $750 billion. However, this number is probably skewed, because some of the USA's military spend goes towards the defense of other countries. This expenditure should be reallocated to the countries that benefit. For instance, Canada isn't even on the list. Why would it be? USA would take on 100% of any Canadian military needs. The USA has a huge military presence in Japan, Australia, South Korea. All of Europe is under the USA's umbrella. It is eye popping that when you look at the GDP PPP of each country, that China's GDP PPP is $23 trillion and the USA is $19 trillion. Here are the numbers if anyone is interested: https://www.globalsecurity.org/military/world/spending.htm https://www.globalsecurity.org/military/world/spending.htm Here are the numbers if one goes by the absolute dollar figures, which I know that you will now understand is incorrect: https://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures https://en.wikipedia.org/wiki/List_of_countries_by_military_... This is just to illustrate the difference when talking about numbers in purchasing power parity. As I said, I would be interested in a PPP of the median wealth of every nation. Which I have not been able to find. I'm sure the USA would not be very good on that chart, either, but I would be interested in seeing how it changes everything and how everything would be rearranged. So if anyone has this info, please post below my comment here.