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‘America does so much more to subsidise affluence than alleviate poverty’
- sambull 4y agoI'm assured it will trickle down one day
- the_optimist 4y agoYou believe this is a pejorative term for supply-side economics and that is why you use it here. In practice, you do not understand economics and default to FUD and political harassment.
- pastacacioepepe 4y agoWe're still waiting for that golden shower to trickle down on us. We have been waiting for a century now.
- 29athrowaway 4y agoThe rich can choose where to live, the poor can't. If you make it hard to be rich, the rich will just go somewhere else, not abide by your rules. The wealth redistribution narrative is as dumb as the plot of the "The Purge" franchise. If there's going to be a purge you just travel to a country without purge.
- tjpnz 4y agoWho said anything about making it hard to be rich?
- faitswulff 4y ago> the rich will just go somewhere else I view that as a net win considering wealth doesn't actually "trickle down" from the wealthy: https://www.cbsnews.com/news/tax-cuts-rich-50-years-no-trickle-down/ https://www.cbsnews.com/news/tax-cuts-rich-50-years-no-trick...
- flappyeagle 4y agoTell that to all the people in the restaurant and service industry out of a job in Downtown San Francisco.
- faitswulff 4y agoThat's the effect of thousands of tech workers leaving. In terms of relative wealth, tech workers have more in common with restaurant and service workers than they do with billionaires: https://mkorostoff.github.io/1-pixel-wealth/ https://mkorostoff.github.io/1-pixel-wealth/ The presence or absence of a billionaire in a given jurisdiction won't be the deciding factor for those industries as evidenced by every other city without tech billionaires that has a thriving restaurant and service industry.
- flappyeagle 4y agoYou’re so close. Do you remember when SF passed a dumb tax law and Stripe had to move their office out of town? Then all the office workers had to go too (or go remote), then the completely obvious effect described above happened? I remember. My friends in the restaurant industry remember.
- deleted 4y ago[deleted]
- faitswulff 4y agoCondescension doesn't make your argument more compelling. Your "friends in the restaurant industry" would be better served by curbing income inequality rather than kowtowing to billionaires.
- deleted 4y ago[deleted]
- censor_me 4y ago[dead]
- catchnear4321 4y agoThis description always amuses me because it leaves out all these minor details, like the fact that most rich people still need pilots and planes to “just go somewhere else,” and that pilots aren’t all rich, and planes require whole fleets of not rich people to maintain them. This is not financial advice and I am not a financial advisor.
- harvey9 4y agoI've read about airline staff including pilots on poverty wages, but I would be astonished if that included anyone who flies private jets for the very wealthy.
- sandworm101 4y ago>> If you make it hard to be rich, the rich will just go somewhere else, not abide by your rules. Yes and no. Rich people don't want to live in California simply because of their tax treatment. Rich people don't want to live in London because of the privileges given to bankers. People don't want to live in Vancouver simply because of the real estate market. Rich people want to live in these places because these places are great places in which to live. Weather, politics, safe streets, your wealthy kids not being kidnapped for ransom money, access to ambulance services, clear air/water, not having legions of poor people at your gate every morning, being able to go for a morning jog without bodyguards, not having to bribe the cops every other day ... Rich people care about things beyond lower taxes. Those things are basically the same as everyone else. Rich people want their bank account to live in offshore tax havens. They don't want to raise children in such places. There is a reason why every Chinese billionaire has property in Vancouver, why every mega celebrity has an apartment in New York and a house in London.
- 29athrowaway 4y agoThe tech industry likes places geographically distant from Washington DC. They also like unregulated activities. Like software monopolies, ad-tech, crypto, gigs, the metaverse, etc. (and now, AI). If it's too new or too abstract to be illegal, you will find a California company for it. The race for technological advancement is not to make the world a better place, it's a race against legislation to find things that are not yet regulated and profit for them for as long as possible. 1. Enter unregulated market 2. Profit as much as possible 3. Use lobby to keep regulation away 4. Once it's so regulated that it's hard to make money from it, find another unregulated thing to do Examples: Google's Doubleclick fiasco, Uber, Airbnb, Coinbase, etc.
- sandworm101 4y agoSome of the tech industry, mostly on the consumer side of the market. The military and financial services tech companies still love the east coast (MIT/Boston, electric boat, NYC etc). Much of California's tech sector also grew from the aviation industry, which came to California because of weather and geography far more than culture or politics.
- ouid 4y agoExplain to me exactly how you imagine this going down. You've got, say, a billion dollars, not cash, and you've decided to flee from your tax obligations because you think it will be cheaper.
- harvey9 4y agoFirst example that comes to mind is 'not domiciled for tax purposes' . In the UK, our prime minister's wife benefited from declaring her tax domicile as India. She changed it to the UK when it looked like harming his political career. Either she loves him more than the money, or they have a plan to ensure this remains an economically rational choice.
- ouid 4y agoThis is not an argument for your position, it is an argument for the converse. England has crafted laws that allow its wealthy citizens to evade taxes while retaining their citizenship.
- dazc 4y agoNot defending Mr and Mrs Sunak, which is another story, but the UK Domicile thing has been around for many years and no Govt, left or right, has ever attempted to change it.
- tialaramex 4y agoThe Brown administration (ie Labour) did change the rules so that it was no longer possible to somehow be "Not domiciled" in the UK and yet be in Parliament setting rules - including the tax rules - for the country you're supposedly not living in. Several Tories decided that not paying taxes was better than sitting in Parliament and so they quit as a result of this.
- 29athrowaway 4y agoYou liquidate everything and move.
- hestefisk 4y agoQuoting Noam Chomsky: “Make rich people happy and frighten the rest.” You are so wrong.
- 29athrowaway 4y agoWrong in what aspect? Did I endorse such system, or simply described reality? If I tell you right now "your tax rate is now 90%". What will you do? For people that work for minimum wage, you are ultrarich. I'll tell you what you'll do: leave the country. And even if you don't, everyone else will. But governments now are a bit smarter than that. Instead of raising your tax rate they will simply devaluate your money through inflation.
- leeroyjenkins11 4y agoIn 2012, the federal government spent $668 billion to fund 126 separate anti‐ poverty programs. State and local governments kicked in another $284 billion, bringing total anti‐ poverty spending to nearly $1 trillion. That amounts to $20,610 for every poor person in America, or $61,830 per poor family of three. Over, the last 50 years, the government spent more than $16 trillion to fight poverty. Yet today, 15 percent of Americans still live in poverty. That’s scarcely better than the 19 percent living in poverty at the time of Johnson’s speech. Nearly 22 percent of children live in poverty today. In 1964, it was 23 percent. https://www.cato.org/commentary/war-poverty-50-despite-trillions-spent-poverty-won https://www.cato.org/commentary/war-poverty-50-despite-trill...
- BMc2020 4y ago[flagged]
- geodel 4y agoOK. Are the numbers wrong?
- sitkack 4y agoIt doesn't cite any sources, and it also omits time scales. It is basically impossible to fact check, which is by design. It looks quantitative, but it is just propaganda.
- dpkirchner 4y agoLikely. Libertarian-right and other right-adjacent sources often cite incomplete or incorrect numbers. The burden is on them to prove accuracy and, of course, good faith effort.
- 93po 4y agoYes, absolutely
- totetsu 4y agoThe recent Last Week Tonight episode about USA welfare TANF funds covered how a lot of the money budgeted for poverty relief might not even be used for it.
- andsoitis 4y agohttps://archive.ph/HeDjN https://archive.ph/HeDjN
- NickC25 4y agoOf course it does. This is a nation of temporarily embarrassed millionaires, after all. Plus, the poor can't afford to lobby.
- isoprophlex 4y agoWinner takes all mentality seems to be everywhere in the US gestalt. From tipping practices to healthcare. The headline isn't really surprising in that light...
- deleted 4y ago[deleted]
- afrcnc 4y ago[flagged]
- anoxor 4y agoMy political enemies are wrong, stupid, an evil.
- ceejayoz 4y agoPlenty of folks throughout history have been vindicated in that position.
- anoxor 4y agoAnd plenty have been so confident of their political position, that instead of trying to find if there is any truth in their opponents arguments, they instead vilify / demonize them so they don’t need to do the harder internal work of seriously challenging and perhaps refining their otherwise flawless world view.
- ceejayoz 4y agoYour most recent comment outside this thread calls DEI a "religious cult [whose] goal is power and control". Did you come to this conclusion about treating different world views with good faith between that comment and these ones?
- hsjqllzlfkf 4y ago[dead]
- okamiueru 4y agoWhen "the significant population opines differently", it's politics. When 90% percent think the same, it's just common sense, or how things should be. It's no longer politics. Certain opinions about American politics, especially one party, falls squarely within the "common sense" category.
- fallingknife 4y agoGlad to see this getting talked about. The real meaningful wealth gap in our society is between the HN poster income bracket and the poor, not the one between HN poster income bracket and the billionaires. But the latter seems to get all the attention. Can't imagine why.
- steveBK123 4y agoYes. It allows everyone of high education to lean into the fallacy that all our problems would be solved "if we just taxed the billionaires more". In reality, the sheer number of middle/upper middle/upper income and the tax revenue needed for a EU style social welfare would require an increase across a much broader tax base. So tax the billionaires more too, but we aren't getting a lot more government service from that alone.
- EricDeb 4y agoIt's not just about government services. Wealth = power and speech in America and reducing that to any one, unelected person is another benefit of reducing wealth inequality.
- fallingknife 4y agoExactly. All social democratic welfare states, by necessity, place massive tax burdens on the middle class. e.g. Germany hits 42% marginal rate at around $60K income, and on top of that there's a 19% VAT.
- steveBK123 4y agoYes the average middle to upper class American underestimates how undertaxed they are for the services they claim to want. $60k American income person pays marginal income tax of 12% or 22% depending on single or married. And sales tax probably 7%. Even if they live in a high tax state, add another 6% income tax maybe.
- medvezhenok 4y ago
- RcouF1uZ4gsC 4y ago> Landlords in poorer areas earn “basically double” those in more affluent districts — an extra $50 per apartment per month, after expenses. The outperformance, calculated from national surveys, held even when researchers factored in faster price rises in richer areas. “The reason is that property values, mortgages and taxes are much lower in downmarket neighbourhoods, but rents aren’t that much lower,” says Desmond. There are caveats: the relationship is not true in a few top cities, such as New York, but does apply to places like Indianapolis and Buffalo, where “most folks live in America”. Landlords in poorer areas do experience greater variability in profits: some take large losses because their tenants default. So the last sentence acknowledges the greater risk of renting in poorer areas. Now if you have even a basic economic understanding, you realize that higher risk investments need to offer higher returns. If renting in rich areas offered the same return as investing in poor areas with lower risk, you would have a lot fewer rentals in poor areas.
- seanmcdirmid 4y agoRicher tenants are also more likely to buy soon, which also limits the market.
- medvezhenok 4y agoYou would think that you could arbitrage this problem away by increasing the landlord size (and proportionally undercutting rents). I.e. if 10% of renters will wreck their house but rents are higher by 30% on the whole, then a large landlord should be able to shrink that gap (i.e. principle of insurance - they can eat the loss) - versus a small landlord who would want extra padding to account for the risk.
- em-bee 4y agohigher risk means that i need to charge more on each client to make up for the losses that i make on others. it doesn't give me higher returns on average. if landlords earn double over a long period of time then the risk isn't as high as they claim.
- xboxnolifes 4y ago
- sitkack 4y ago> “If the top 1 per cent of income earners just paid the taxes they owed, the country would raise an additional $175bn a year. That’s almost enough money to fill the poverty gap.” But to blame the 1 per cent alone is too easy and too “absolving”, and Desmond has a “reflex against things that absolve us”. He points to the broader chunk of the American population — perhaps the richest quarter, many of them avowed liberals — who hoover up tax credits, demand cheap goods and oppose the construction of affordable housing where they live. > In other words, if poverty is the result of individual decisions, it is largely decisions by the rich. Desmond wants the wealthy to “take less” in exchange for a safer, fairer, less anxious society. Are they ready to listen? In graphs across many dimensions, America is an outlier and not an exceptional one. First we have to actually want to fix it. Then we need to figure out a mechanism. The mechanisms are the easy part.
- xwdv 4y agoI really don’t blame them. The problem is poverty is extremely expensive to deal with. People in poverty barely have anything, and whatever the government does never seems to be enough. It’s like a black hole where money goes to die.
- throwaway22032 4y agoI'm pretty right wing. The way I see it, most left wing "solutions" to poverty seem to be sticking plasters rather than actual fixes. We should build enough normal houses in areas people want to live such that 90%+ can afford them, make owning and operating a car affordable, and make raising a family affordable. I don't think any of this is about spending money. It's more about defining the problem. As I see it the problem is that a ton of people are in a super precarious position, renting their lives with no real stability.
- seanmcdirmid 4y ago> We should build enough normal houses in areas people want to live such that 90%+ can afford them, make owning and operating a car affordable, and make raising a family affordable. That hasn’t really worked anywhere: popular places attract so many people that you literally can’t put supply into synch with demand. San Francisco is already a dense city, would it be as cheap as Manhattan if it had Manhattan like density? Maybe, but Manhattan isn’t cheap. It might be better to focus more on better intercity and intracity transport like they do in Japan, or allow for smaller cheaper places to live like they do in Tokyo (incidentally, aggressively deprecating the value of structures like they do in Japan might help as well).
- Redoubts 4y ago> San Francisco is already a dense city The vast majority of residential there is single family homes. Why do you think this? https://www.sfchronicle.com/sf/article/sf-map-single-family-homes-17699820.php https://www.sfchronicle.com/sf/article/sf-map-single-family-... > 38% of the city’s land is zoned for single-family homes, which is almost two-thirds of all the land zoned for residential purposes. You can’t say building density doesn’t work when it hasn’t even been tried in the last 30 years.
- seanmcdirmid 4y agoBy American city standards, San Francisco is dense. Even if they have a lot of SFHs, they are counting Victorian row houses that are placed next to each other. > You can’t say building density doesn’t work when it hasn’t even been tried in the last 30 years. What do you mean? I lived in Beijing for 9 years, and it was plenty dense, and plenty expensive to rent for locals.
- mjfl 4y agodon't worry guys, the interest rate increases necessitated by elevated inflation will eliminate a tremendous amount of affluence, and we can all sit together in the mud.
- tylerekahn 4y ago[deleted]
- jnovek 4y agoThat’s a nice sentiment, but it’s not very actionable.
- deleted 4y ago[deleted]
- grammarnazzzi 4y ago[dead]
- Nifty3929 4y agoThe main problem with government poverty programs is that they usually focus on spending money instead of giving money to people who need it. That is, the government spends money on things, but this is a very inefficient or even counterproductive way to help. And a lot of the time it just means that the money is going to whoever is politically connected. A much more efficient way to help people is just to give them money directly, and then people can spend it on whatever they think they need.
- cptskippy 4y agoThis stems from the fundamental conservative beliefs that the system is fair and your station in life is a result of your actions or efforts. Thus a fundamental opposition to actually charity and instead dangling opportunities for people to help themselves. Running those programs is of course non trivial so the capitalist naturally offer to run them for the government at a modest fee.
- brodouevencode 4y agoThat’s not a conservative take per se, meritocracy was a notion whose popularity came directly from the Enlightenment.
- cptskippy 4y agoNo one said that it was a creation of conservatives, just that it was a belief. People's beliefs are usually impressed upon them by externalities like the community that raised them or traumas they endured.
- PragmaticPulp 4y ago> This stems from the fundamental conservative beliefs that the system is fair and your station in life is a result of your actions or efforts. I don’t think I’ve ever heard a conservative say that life is fair. It’s more common to hear talk about “life isn’t fair” and how people shouldn’t expect every unfair thing to be corrected for them by someone else.
- freeopinion 4y agoThis is a touchy subject and it's easy to be insensitive. There is true, desperate poverty, then there is is comparative poverty, then there is perceived poverty. Poverty can be hard to define.I could make a comment about a child who gets free lunch at school but also buys a new $1000+ phone every year. But that's an old story -- like the shiny decked out Cadillac parked in front of the shotgun shack. There is true, desperate poverty in the U.S. I don't mean to dismiss that. But much of what people in the U.S. consider to be poverty today passed as middle-class America 40 years ago. In a sense, the difference between alleviating poverty and subsidizing affluence can often be a state of mind. When a family with a house and a car and three televisions tries to improve their situation so the single parent isn't working three jobs while the 12-year old kid fixes Ramen for the siblings, that's an effort to rise out of poverty. But that family is still a 10-percenter globally. I'm reminded of a situation I witnessed fairly close up a while back. A family in our community lost everything when their house burned down. They weren't poor before the fire, but I don't think they or anybody else in the community considered them to be rich. Before dinnertime on the day their house burned down, each of their children had a place to sleep, clothes to get by for the next week, and a lot of hope that their circumstances were temporary. Within months, a lot of hard work from the parents, neighbors, and extended community put the family back in their rebuilt home. It probably took years to really replace everything. But today the family is well situated. I have seen others who have received similar levels of assistance who are much less well situated. The biggest difference I can perceive is a state of mind. One story can be characterized as a case of subsidized affluence. Some others have been efforts to keep their heads above water. But the level of assistance was very similar. I am not saying that poor people are poor because they choose to be poor. But I can't escape the thought that a poverty rescue program and a wealth management program could cost the same amount of money and target the exact same people and have different outcomes. A casserole delivered to a family in need might do less good than a neighborhood block party that feeds the same family. Granted, a block party might not be appropriate for a family recovering from a funeral. But it illustrates the different mindset.
- opportune 4y agoI think we often simplify individual instances of poverty, or poverty as a whole, to either “not their fault” or “their fault” when in reality it could be any mix of the two for an individual. Systemically, we do have policies that lead to some guaranteed level of poverty - our economic system requires that there be some optimal level of unemployment, the minimum wage basically determines the minimum standard of living for a fully employed person, and policies like how much SSI/disability pay directly impact the recipients’ standard of living. And then of course there are contributors like cyclical/generational poverty in ghettoes and certain rural areas, the war on drugs (the associated gang/criminal activity, imprisonment affecting careers, children growing up without a parent), an often poorly performing public educational system. On an individual level you can say “well, if you made XYZ choices maybe you wouldn’t be poor” in a lot of cases, but in aggregate it’s basically guaranteed some people will experience poverty, and that is also a factor for most of those individuals. Some people will always get imprisoned or grow up in unstable households, or not have skills/opportunities for more than minimum wage jobs, or be disabled to the point of not being able to work. There will always be people without savings or who get “broken” by adversity rather than rising above it. If you give people money unconditionally I guarantee you it will always help some people stabilize and lift them up to the point of not needing it, but there will always be at least some people that just spend it all on extra consumption. That’s what makes poverty a real challenge. Some poverty spending on individuals will be wasted, which no taxpayer wants, but in preventing that we introduce other kinds of waste like bureaucracy and welfare cliffs, and introduce low limits on how much you can receive which then limits how much poverty programs can assist people. And no matter how much we spend, there will be some people who remain “poor” in the sense of being completely reliant on the spending with nothing to fall back on.
- kriskrunch 4y agoIf taxing the rich and wealth transfers worked California would have some of the lowest poverty, illiteracy, and the most affordable housing! Socialism and Communism would be the gold standard. But the opposite seems true. I can't remember the exact number, but here in California, the top 1% pays around 40% of the taxes. When will we have a discussion on government waste?
- pydry 4y agoTop 1% of earners != Top 1% of wealth. The top 1% of earners (doctors, lawyers, dentists) usually get shafted with income taxes while the top 1% rentiers get taxed very little - especially in California (which has very low property taxes). The rentiers usually try to rhetorically conflate the two - primarily because the 1% of earners are taxed a lot and there is an obvious societal downside to taxing (e.g. dentists) more (we need their skills) but especially because the only societal downside to taxing a rentier more is by incorrectly identifying/taxing rentier behavior.
- kriskrunch 4y agoThe article specifically discussed the income EARNED by the evil landlord. Which is taxable income. The income generated by property value is taxed when sold. In most states there are annual property taxes based on it's value. Those go to schools, roads, and whatnot. Here in California we have statewide rent control, in LA there is a seemingly never ending eviction moratorium... Hell, I sold my house a couple of years ago to RENT in a better area because it's cheaper and easier! Let the evil landlord deal with all of the headaches. It's a pain in the neck I don't need. Rentiers are taking on great risk and responsibility, especially in socialist states like California. They deserve the reward. Often, rentiers that own large complexes like those discussed in the article are groups. Not single individuals. It's a stressful business. Have you personally dealt with code enforcement actions? What good is wealth if it's just on paper?
- darkwizard42 4y agoI think you have the right facts, wrong (or at least unsubstantiated) conclusion. Much of California's problems lie in regulatory capture. Housing can't be built because homeowners have experienced great wealth gain and don't want it to be touched (at the detriment of livability for all generations after -- or folks attempting to climb to socioeconomic ladder). Then you could make a similar argument for social spending on homelessness, which at least from the Bay Area seems wasteful in that it doesn't attack root problems (drug rehab and housing).
- EarthIsHome 4y agoSocietal structures arise to manage contradictions in society on behalf of the ruling class. One example of this is policing in the US: modern day policing arose from slave patrols [0]. This societal structure of slave patrols arose to manage the contradiction in society of slave uprisings or slaves running away on behalf of the slave-owner class. The government is also a societal structure that arises in society to manage contradictions between classes on behalf of the ruling class. In the US the laws and enforcement benefit the ruling class. Until a different ruling class takes over, America will continue to subsidize affluence rather than alleviate poverty. [0]: https://naacp.org/find-resources/history-explained/origins-modern-day-policing https://naacp.org/find-resources/history-explained/origins-m...
- davidgay 4y ago> One example of this is policing in the US: modern day policing arose from slave patrols [0]. This seems poorly supported, even by the cited article - it just says there was a group A doing X, then A doing Y, then later the police did Y too. And, what about: - police forces outside the South? - influence from policing around the world, especially England?
- ashwagary 4y ago>police forces outside the South? Slavery existed outside the South. >influence from policing around the world, especially England? English policing had very different standards that were derived from Peelian Principles [0], at least until the very recent push for militarization. [0] https://en.m.wikipedia.org/wiki/Peelian_principles https://en.m.wikipedia.org/wiki/Peelian_principles
- wonder_er 4y ago'whataboutism' is unbecoming. That there might exist other influences behind modern day policing than just slave patrols doesn't free the institution from that stain. Policing as an institution should be recognized as what it is - one social class being given tremendous resources to support the casual and regular enactment of violence upon other social classes. I, personally, don't rely on violence, or threats of violence, in my day to day, and don't support anyone else doing the same, even if they think they really really really need violence in their lives.
- hn_throwaway_99 4y agoI'm extremely wary of any analysis that uses US official poverty measures over time. Highlighting just one obvious problem, this measure doesn't include non-cash benefits like housing assistance or SNAP benefits, and only takes into account pre-tax earnings. So if you're making the argument "government doesn't do enough to fight poverty", I'm not going to pay attention to you if you deliberately exclude some of the most common ways that the government uses to fight poverty. https://www.prb.org/resources/how-poverty-in-the-united-states-is-measured-and-why-it-matters/ https://www.prb.org/resources/how-poverty-in-the-united-stat...
- known 4y ago[dead]
- whiddershins 4y agoWhat is poverty in America exactly and which parts are most pressing to alleviate?
- Kalanos 4y agowell ya, roads
- naveen99 4y agosusidized affluence is an oxymoron.
- dotcoma 4y agoSocialism for the rich and rugged capitalism for the poor. — Rev. M.L. King
- lumb63 4y agoI admire Desmond for being upfront about the fact that his changes would cost the rich more money. I’ve always admired Bernie Sanders (though I don’t disagree with his policies) for being forthright about that as well. It irks me when folks propose wealth redistribution plans and argue that it would not redistribute wealth, and that instead more wealth would appear for the poor. Still, I think he misses the mark a bit. He says that he “ wants the wealthy to ‘take less’ in exchange for a safer, fairer, less anxious society.” I think it’s a bad pitch. It is safer, but not for the wealthy; they mostly don’t interact with the poor, since they live in secluded upscale neighborhoods. It is fairer, except from the perspective of the people who are paying to make it more fair, while others benefit. Society is less anxious, but not the people who are financing the operation, since they have less money. It’s a net benefit to society, but I don’t believe it’s a benefit to everyone. There’s also a substantial obstacle to ideas like these: mostly, the rich make the rules, and they are unlikely to make rules that go against their self-interest. In my opinion, rather than finding ways to redistribute income, we should be looking for ways to predistribute income. Programs and policies like welfare and progressive taxes are, in my opinion, bandaids attempting to cover up that the game is rigged; rather than addressing that some folks are able to amass far more wealth, or earn a far higher income, they attempt to correct for the fact that it happened afterward. I think that’s backwards, and society should make policies that make it harder to have inequality in the first place. One example would be taxing share buybacks at the same rate as dividends, since they are fundamentally the same mechanism for returning capital to shareholders, except one receives favorable tax treatment. Another example (and my guess is this is the largest) is having reasonable interest rates. Net worths of upper middle class Americans have skyrocketed over the last twenty years (and more) because of very low interest rates which have created asset bubbles in real estate and equities. This has also been a huge boon to the ultra-rich. These increased asset prices also have the effect of depressing returns for all, and raising the cost of housing for all. It also fuels the income gap between rich and poor because folks in high growth industries are able to earn disproportionately more than in low growth ones. The way forward is to level the playing field, rather than acknowledging or complaining the playing field is not level and then attempting to correct for that after the fact.
- intalentive 4y agoAmerica subsidizes affluence through central bank interventions. When it buys trillions of dollars of assets, like MBS, bonds, and indexes, guess what, asset prices go up, benefiting asset holders — the rich. How about a “first, do no harm” discussion about the ways government actively benefits the rich, through the Cantillon effect and regulatory capture, instead of always focusing on confiscatory redistribution.
- rmrf100 4y agoContrary to the practices of other countries