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Noahopinion has a very recent interesting article on wealth and taxation. It makes me mad because it contradicts a lot of cherished ideas I have about the rich

• toomuchtodo 2y ago
  Wealth is unelected power, a bug. It’s reasonable to say there should be limits on wealth, considering most wealthy people were lucky (either by birth or “right place right time”) but attempt to post rationalize it as anything else. Would you want someone who won a lottery ticket to have power over your life at scale? Because that’s what excess wealth is, a power dynamic powered by a suboptimal system masquerading as shades of a meritocracy that does not exist.
  • chr1 2y ago
    How many people who win lottery tickets become wealthy? Most of them squander the money they win, so your point about simply being lucky is not true. As for your question lottery winner having the power proportional to his money, is much better than bureaucrats having power to take anyone's money.
    • eigart 2y ago
      Obtaining excessive wealth is the same as winning the lottery (the billionaire founder class). Edit: Q: If you downvote this comment, do you believe someone like Zuckerberg was predestined to be a billionaire?
      • AlOwain 2y ago
        He was certainly not predestined, but his inclinations and temperaments did distinguish him. True some luck is involved; it is a necessary part, but individuals are often what induces the procuring of wealth.
        • eigart 2y ago
          If you monte carloed it, I’m sure he would do way better than average, but given how rare the current outcome is, I firmly believe it is mostly luck.
    • WalterBright 2y ago
      Netflix ran a documentary recently about what happens to the zillions paid to football players. Spoiler Alert: they spend it like it was water, and when their short career is over, they have nothing.
  • aorloff 2y ago
    What about wealth you build for yourself ? Many of the duplexes in town were built by small builders who passed them on to family. Now they are treated like rich landowners but in reality grandpa built the wealth.
    • toomuchtodo 2y ago
      Do you not see how this was luck? Certainly, actions were taken to encourage an outcome (holding an asset of potential future value), but luck as a component of a favorable outcome cannot be overstated.
      • deleted 2y ago
        [deleted]
      • aorloff 2y ago
        They were builders, they had businesses building for other people and invested their own money and time into these buildings for their own family. Luck in exactly what sense ? Yes, they did not die of dysentery on the trail, so evidently some luck was involved, but the wealth building seems very intentional and causal.
        • toomuchtodo 2y ago
          See, you’ve caught yourself in the trap. Lots of builders fail, look at the YC startup failure rate. Even investing in broad equity index funds is luck (sequence risk). https://news.ycombinator.com/item?id=40378138 https://news.ycombinator.com/item?id=40378138 https://archive.nytimes.com/www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html https://archive.nytimes.com/www.nytimes.com/interactive/2011...
          • aorloff 2y ago
            I meant construction developers as a trade for others.
          • kortilla 2y ago
  • dnissley 2y ago
    On some level not all power being elected is good. Provides some balancing force for an electorate with... I'm not sure what to call it... volatile whims?
  • WalterBright 2y ago
    If people cannot accumulate wealth, we wouldn't have SpaceX.
    • DaoVeles 2y ago
      Such a declarative statement is very reductionist. Yes, some folks will accumulate wealth but there needs to be some additional limits on it. I am in favor of progressively increasing tax brackets that eventually get up to near 100$. Spend it or lose it. And if you lose it, it goes in to the very bottom income bracket where it will be used imediately. Trick up economics if you will.
      • WalterBright 2y ago
        You don't think Musk's fortune was used? He invested all he had in Tesla, then again in SpaceX. > there needs to be some additional limits on it. Then we don't get SpaceX or Tesla.
    • marmadukester39 2y ago
      No, but we do get NASA
      • WalterBright 2y ago
        Musk's rockets cost less than 10% of NASA's. Plus, SpaceX has not cost you a cent, while you've paid plenty of taxes for NASA.
        • abenga 2y ago
          The highest NASA's budget has ever been as a percentage of the federal budget is 4.5% during the Apollo program, totalling 650b nominally over the years. Saying anyone here now has paid "plenty" of taxes to nasa sounds … disingenuous at best.
          • WalterBright 2y ago
  • TimTheTinker 2y ago
    Without wealth, there is no prosperity for anyone except those who hold political power, full stop.
  • ethagnawl 2y ago
    That's such a simple, yet profound analogy. It's a great bit of framing for these types of conversations.
    • toomuchtodo 2y ago
      Appreciate the kind words. Any fool can know, the point is to understand.
  • JackFr 2y ago
    > Because that’s what excess wealth is, a power dynamic powered by a suboptimal system masquerading as shades of a meritocracy that does not exist. What does that mean? It's millenial Marxism unmoored from any specificity or facts.
    • toomuchtodo 2y ago
      We pretend wealthy people are special when they’re simply lucky. They then use wealth to wield power and control (politics specifically, Citizens United, but I can provide other examples), with a narrative that they are special (not lucky! special!) and that maybe you too can be special and wealthy if you work really hard and are exceptional. Are the wealthy lucky? Yes. Do they use their wealth to shape the world as they see fit? Yes. Is the narrative that anyone can be wealthy if they work very hard and are exceptional despite the math showing this is not true? Yes.
      • throwaway22032 2y ago
        Aside from the influence of money on politics almost all of what you have written is complete bollocks. Many of us have been successful from nothing and know friends who have been more so. There is usually a luck element in the size of that success but it is blindingly obvious to someone who was in the crab bucket to see that actions work. It sounds as if you have an emotional issue with the idea that people can change their own situation. I literally have a choice tomorrow whether I paint my wall, study, fix up the leak in my loft, etc, or just sit and play my Switch. People who do too much of the latter do not succeed. And no, parents or grandparents or country or genetics or whatever are not luck either. Choosing a suitable mate is about as close to the meaning of life as we have.
        • toomuchtodo 2y ago
          > It sounds as if you have an emotional issue with the idea that people can change their own situation. On the contrary, I am simply data informed. It sounds like you're operating from a mental model that overweighs ability in outcomes. I have provided links below to help you improve and evolve this model. https://www.scientificamerican.com/blog/beautiful-minds/the-role-of-luck-in-life-success-is-far-greater-than-we-realized/ https://www.scientificamerican.com/blog/beautiful-minds/the-... ("The Role of Luck in Life Success Is Far Greater Than We Realized") https://www.technologyreview.com/2018/03/01/144958/if-youre-so-smart-why-arent-you-rich-turns-out-its-just-chance/ https://www.technologyreview.com/2018/03/01/144958/if-youre-... | http://arxiv.org/abs/1802.07068 http://arxiv.org/abs/1802.07068 ("Talent vs. Luck: The Role of Randomness in Success and Failure") https://ustrustaem.fs.ml.com/content/dam/ust/articles/pdf/2022-BofaA-Private-Bank-Study-of-Wealthy-Americans.pdf https://ustrustaem.fs.ml.com/content/dam/ust/articles/pdf/20... (2022 Bank of America Private Bank Study of Wealthy Americans: The impact of shifting generational attitudes amid an historic wealth transfer) [Only 27% of the ultra wealthy are self made; 70% of Americans who hold more than $3 million are over 56 years old.] https://www.financialsamurai.com/your-wealth-is-mostly-due-to-luck-be-thankful/ https://www.financialsamurai.com/your-wealth-is-mostly-due-t... ("Your Outsized Wealth Is Mostly Due To Luck: Be Thankful!") > And no, parents or grandparents or country or genetics or whatever are not luck either. https://www.pewtrusts.org/en/about/news-room/press-releases-and-statements/2015/07/23/parental-income-has-outsized-influence-on-childrens-economic-future https://www.pewtrusts.org/en/about/news-room/press-releases-... ("Parental Income Has Outsized Influence on Children’s Economic Future") https://documents1.worldbank.org/curated/en/712251468165866186/pdf/946720JRN0Box30LIC00190rest0a000432.pdf https://documents1.worldbank.org/curated/en/7122514681658661... ("Global inequality of opportunity: How much of our income is determined by where we live?") https://www.psychologytoday.com/us/blog/the-origins-of-mental-illness/202406/genes-influence-childrens-success-directly-and-indirectly https://www.psychologytoday.com/us/blog/the-origins-of-menta... | https://www.sciencedirect.com/science/article/pii/S0002929721002780 https://www.sciencedirect.com/science/article/pii/S000292972... ("Genes Influence Children’s Success, Directly and Indirectly") > Choosing a suitable mate is about as close to the meaning of life as we have. ~43% of first marriages fail, ~60% of second marriages, ~73% third marriages. https://www.forbes.com/advisor/legal/divorce/divorce-statistics/ https://www.forbes.com/advisor/legal/divorce/divorce-statist... Good luck.
  • rpdillon 2y ago
    Presuming this is correct, what's the better alternative?
    • toomuchtodo 2y ago
      https://news.ycombinator.com/item?id=40963894 https://news.ycombinator.com/item?id=40963894 seems like a start. You don’t need to throw the entire system away and start from scratch, simply refactor the suboptimal parts piece by piece.
      • rpdillon 2y ago
        Sorry, I thought you said that wealth was a bug, so I was looking for an alternative to wealth. Taxing wealth doesn't seem like an alternative to wealth, it seems like building on top of it.
      • pedroma 2y ago
        The solution is to redistribute power from the people to the government?
  • marcianx 2y ago
    How would you impose these limits on wealth? Where would the extra money go? To the government? If so, would you be okay with the government saying that _all_ future earnings if yours went straight to them because you have too much money already? Would you give anyone that power?
    • danaris 2y ago
      If I already had $2B? Or even $200M? Yeah, I'd be OK with that. It's not like it would actually affect my life in any way whatsoever. We're not talking about the government taking the food out of anyone's mouth. It's not actually a benefit to the world that we have individuals walking around with enough wealth to purchase, say, one of the major companies that acts as a backbone for communication and information-spreading worldwide. (Of course, it's also somewhat troubling that a single for-profit company can be such a backbone, but that's a separate conversation.) In fact, there's some pretty solid research indicating that it's destabilizing for entire societies to have that level of inequality.
• Timshel 2y ago
  It's interesting but at the same time I think some points miss their mark like : > The wealth of America’s billionaires was estimated at around $5.2 trillion in 2023, while federal government spending was about $6.4 trillion. Confiscating every last penny from Jeff Bezos, Elon Musk, and all the other billionaires wouldn’t fund the U.S. government for one year. And of course you could only do it once. Ok so just 750 persons can replace all form of taxation in the USA that's incredible. It's not like just replacing taxes from all 330m persons but all the companies too ... And the USA budget is not the most efficient per capita (something around 20k ?), if you do the same for France you are closer to 6k.
• ericjmorey 2y ago
  Noah is a smart person and that's why I'm surprised that his essay is so transparently dumb. "I think income is a lot more important than wealth." If you keep receiving all the income you want and I'll get exclusive rights to all of your wealth, surely you got the better side of this deal then? Or is there more nuance at play and blankets statements about the relative importance of income and wealth are simply pointless. "if you have a house, no one owes you that house"? In this case of property ownership, your rights granted to you by society is the result of an agreement by the society you're a part of not to use the resource that you've been granted exclusive rights to. The allocation of control over resources is the essence of economics. It's the whole point of the field of study. I cannot believe he's setting up an argument about how that doesn't really matter because there isn't a lot of resource control without legally associated debts.
  • Mathnerd314 2y ago
    > If you keep receiving all the income you want and I'll get exclusive rights to all of your wealth, surely you got the better side of this deal then? I think so, because you can use the income on consumables. Like say you got a no-limit credit card. You go on exotic vacations at tropical resorts. All you have are some (economically worthless) photos of yourself having a great time. When the credit card company comes calling, you turn out your pockets and say "sorry, I'm broke", and walk away to your next plane flight. Definitely seems like a good deal to me, not so much for the credit card company. The simple fact is that most people are wealth-neutral or even wealth-destroying in that e.g. they wreck their car and just buy another.
• TacticalCoder 2y ago
  > Noahopinion has a very recent interesting article on wealth and taxation As this article explains: the US could confiscate all US billionaires' wealth and that would only pay for one year of public US spendings. Not to mention that confiscating that much wealth would crash the very value of that wealth, so they'd get less than that. That's what I meant in my comment when I wrote that we know how it's going to end up: they won't stop at confiscating the billionaires' wealth. The state shall immediately run out of that. They'll then come after the middle class' savings (which the EU is preparing at the moment, should be coming out in a few months).
• afpx 2y ago
  When someone writes “confiscating rich people’s wealth” I can’t take them seriously. People make wealth from what infrastructure is available. Try making your wealth living in the middle of the Sahara.
• yieldcrv 2y ago
  one of the interesting things to me is that the concept of wealth isn’t finished. not only is private wealth improving, wealth that is exchangeable for other things is improving as well. its fine for other people to work on improving its distribution while keeping a finite set of resources affordable, because I dont have the solution to that and taking other people’s private liquid or illiquid wealth doesn’t solve that either but its very interesting to me to see how abysmal liquidity is in every market outside of some US markets, and how we got here, and how many more things can become liquid wealth. It makes me not be able to take simpler proposals of solving out of control public spending very seriously.
• deleted 2y ago
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• Devasta 2y ago
  Bezos cries, as I wave a tenner in his face. "You don't have any real wealth, you only have stocks!"