6 ms·

Inequality continues to rise rapidly. Everyone but the most well off living conditions continue to decline. The wealthy elite need to make stories that distract

by mempko 2y ago

Inequality continues to rise rapidly. Everyone but the most well off living conditions continue to decline. The wealthy elite need to make stories that distract people from this problem. So they will blame immigrants and "bloated inefficient governments" for the problem. And will push anti-immigration and "personal liberty" and "more free markets" as the solution. Instead of the obvious problem that Inequality is rising and we need to substantially raise taxes on the rich and reduce them for everyone else to close the runaway gap.

amazingamazing 2y ago
what level of income and/or wealth constitutes rich and how much should they be taxed?
- schmidtleonard 2y ago
  What percent of your money comes from labor vs capital appreciation? Which is the hand that feeds you? Below $1M NW, you are probably labor. Above $10M NW, you are probably capital. These thresholds come from asking the question "does a conservative estimation of the passive income from these assets replace a wage?" -- below $1M, no, above $10M, yes, feel free to adjust by playing with the assumptions or plugging in wacky edge cases. The point is that incentives determine so much about politics and the incentives of each individual tend to heavily favor one side or the other which tends to translate into politically relevant policy preferences that favor one side or the other. The tax code is comically tilted in favor of capital. We should fix that. Unearned income shouldn't be taxed less than earned income, for a start. Also, if I can pay property tax on my house, mega-billionaires can pay property tax on their stock pile. But these are details, and focusing too much on details can be a distraction from the root issue: the tax code is comically tilted in favor of capital, and we should fix that.
  - mempko 2y ago
    This is a great answer, thanks!
  - robertlagrant 2y ago
    A hard line between labour and capital seems a bit reductive. My pension is capital. I have some shares, which are capital. I also have the security of a permanent job, paid by someone else to take risks. E.g. > These thresholds come from asking the question "does a conservative estimation of the passive income from these assets replace a wage?" Net worth doesn't necessarily generate any passive income. You could own a lot of shares in your business that are temporarily spiking, but you can't sell them for some reason. Net worth is a bad way to think about this, because it makes people think billionaires have billions of dollars in cash ready to be taxed away. When in fact if you want people to pay tax on their stock pile, you're talking about taking their property away from them because of how much the market happens to value it right now. Unlike property tax, which is to pay for the services weight of your property on the local area.
    - schmidtleonard 2y ago
      > A hard line between labour and capital seems a bit reductive. What hard line? The hard line I didn't draw with the "what percent of your money" formulation? > Net worth is a bad way to think about this, because it makes people think billionaires have billions of dollars in cash ready to be taxed away. If it's not cash it can't be taxed? I brought up real estate as a counterexample to the entire stable of "it's tooo haaaaard" arguments, and that's the weakest of them. I was expecting something taller, like the liquidity argument. But real estate comfortably refutes them all and you didn't even try to deal with that. > you're talking about taking their property away from them The government wouldn't hesitate for a second to take my property when they are taxing me waaay heavier than mega billionaires. Why the fuck should I be the slightest bit sympathetic to the sanctity of their literal entitlement? Some people put property rights on an altar and treat them as a fundamental principle, but here's the thing: property rights (at their worst) have been used to institute and defend literal slavery. If you want to put them on an altar, if you want to treat them as a fundamental principle rather than a tool to economically link investment with return, I'm going to make you own that and defend it. Do you want to go down that road?
      - tetromino_ 2y ago
- dragonwriter 2y ago
  > what level of income and/or wealth constitutes rich and how much should they be taxed? There doesn't need to be a crisp threshold. Progressive taxation without treating labor income as more heavily taxed than generic income which in turn is more heavily taxed than capital gains would be a good start.
  - CarolineRommer 2y ago
    This! Serious economics papers are always about studying different progressive tax functions. Nobody cares about specific thresholds to separate "the rich" from the rest. It's a moot point because wealth is a continuous variable (approximately Pareto with tail index between 1 and 2, to be precise).
- deleted 2y ago
  [deleted]
andrekandre 2y ago
also the culture war is perfect for this, it gets people who would otherwise agree on many issues to fight over trivialities and nuances etc...
- cvwright 2y ago
  Yes - the strategy is to get the people who care about doing what’s right to fight amongst themselves. Then the people who care only about money and power can divide and conquer.
  - andrekandre 2y ago
    > divide and conquer like they say: oldest trick in the book
Ray20 2y ago
>we need to substantially raise taxes on the rich and reduce them for everyone else The problem with these solutions is that the math doesn't add up. Either there are too few rich people in reality, and even if you can collect 200 percent from them - it won't affect the overall picture (and in the end there will be even fewer of them, and you'll have to raise taxes for everyone). Or, if we expand the category of rich - a poverty funnel is created, where taxes on the "rich" protect the "super-rich" from competition. What difference does it make that you have to pay 90% if all the money is yours, because no one will invest in competing with you, since success will bring them 10%, and failure will take everything? Everywhere in the world, the rich pay less. Even in countries with formally progressive tax rates, there are a huge number of subsidies and programs that in the end of the day boil down to the fact that the effective tax rate for the rich is lower (even if this means simply reducing their competition so that they get more money and pay a "progressive" tax on it). Because the problem is not inequality, the problem is poverty. And any measures that discourage production in the end of the day increase poverty. For this reason, any construction of socialism always ends in hunger. Because what difference does it make what just and fair distribution system you came up with if your production fell ten, a hundred or a thousand times because of such a system?
- generativenoise 2y ago
  You are being just as dogmatically blind. While there is truth is what you say about simply redistributing money is going to directly get people the goods and services required since that is not directly production. It does have second order effect of changing the weighting of what society produces. If people are too poor to afford food why would you bother to grow it. Taxing should be about keeping winner take all effects in reasonable check to keep markets actually functional for a good proportion of the participants.
  - Ray20 2y ago
    >If people are too poor to afford food why would There is no such thing in economic as "people are too poor to afford food". Growing food - is like in the start of economic chain, if people can't afford food - they starting to grow it themselves, and unaffordability disappears. Food can be unaffordable only if you hinder the production of it with your "smart" and "fair" taxation system, for example like socialists do.
marcusverus 2y ago
> Everyone but the most well off living conditions continue to decline. This is objectively false. https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N > Instead of the obvious problem that Inequality is rising I'm old enough to remember when progs all shrieked that poverty was the big scary problem. Capitalism solved that with minimal expense. You know that scary 15% in poverty figure you hear during election season? That's based on census income data, which excludes ~90% of all welfare programs, even CASH programs like refundable tax credits! So with poverty overwhelmingly sorted, they've moved on to inequality! But even calculations of income inequality are doped up--high earners incomes are counted BEFORE taxes, and low earners BEFORE benefits. Keep that in mind whenever progs advocate for more welfare spending--even if you give it to them, they won't count it! They exclude it from the very calculations which they use as evidence of the need for ever more spending!
- mempko 2y ago
  That's now how you measure inequality. Look here. https://fred.stlouisfed.org/series/WFRBSN40188 https://fred.stlouisfed.org/series/WFRBSN40188 And https://fred.stlouisfed.org/series/WFRBST01134 https://fred.stlouisfed.org/series/WFRBST01134 And https://fred.stlouisfed.org/series/SIPOVGINIUSA https://fred.stlouisfed.org/series/SIPOVGINIUSA You aren't looking at the right data. This is why it's so hard to educate the public about this, even intelligent people on HN get it wrong.
  - marcusverus 2y ago
    The GINI can be measured before or after taxes. The link you shared is after--this one is used in defense of the metric. A 'before tax' version[3] is invariably used when on offense. Sure, wealth inequality is growing, but this isn't a problem, it's merely an emotionally resonant issue. The left love it for the same reason they lofted the 'poverty' banner for so long--it's a Philosopher's Stone. This particular stone hails from a failed German novelist and promises to transmute other people's money into votes! Regardless, median income[0] and median net worth[1] are rising and poverty is in the doldrums--points which make it difficult to make an honest argument that we are in need of radical change. [0] https://fred.stlouisfed.org/series/MEHOINUSA646N https://fred.stlouisfed.org/series/MEHOINUSA646N [1] https://fred.stlouisfed.org/series/BOGZ1FL192090005Q https://fred.stlouisfed.org/series/BOGZ1FL192090005Q [3] https://ourworldindata.org/grapher/gini-coefficient-before-tax-wid https://ourworldindata.org/grapher/gini-coefficient-before-t...
discodonkey 2y ago
Living standards have absolutely been rising for just about everyone, and continue to do so - for example in terms of income growth[0]. People in all income tiers have seen their incomes grow consistently, albeit not equally. [0] - https://www.pewresearch.org/race-and-ethnicity/2024/05/31/the-state-of-the-american-middle-class/re_2024-05-31_american-middle-class_0-02/ https://www.pewresearch.org/race-and-ethnicity/2024/05/31/th...
- Propelloni 2y ago
  > albeit not equally. That's the crux. It's the same in almost all developed countries, we all have been getting more income, but most of us are not getting richer. The widening of the scissors is becoming more and more obvious, because even middle incomes suffered hard during the cost of living crisis, and continue to suffer.
  - robertlagrant 2y ago
    This is mostly because of housing prices, not unequal distribution of income gains. If you gave everyone more money house prices would just go up more, because houses are being built far slower than the population is increasing.
    - courseofaction 2y ago
      Rising inequality increases asset prices as the wealthy look for more places to invest and extract rent. Gary's economics on YouTube explains this very well, with credentials.
    - olleromam91 2y ago
      We don't give everyone more money. Just the people who don't already have too much.
      - robertlagrant 2y ago
        The people with "too much" (everyone with more than the person saying the phrase "too much", presumably) aside, giving everyone more money will mean house prices will be bidded up and rents will rise, because there is an oversupply of people vs accommodation.
rdm_blackhole 2y ago
> So they will blame immigrants and "bloated inefficient governments" for the problem. And will push anti-immigration and "personal liberty" and "more free markets" as the solution. This trope is getting tiring to be honest. There are very clear issues with immigration in many countries. The issue is that for the last 20 years when these issues where brought up, the main parties just dismissed them and ostracized anyone who dare bring up the subject. This failure to address the problem is what is fueling the rise of the far right everywhere except in 1 country, Denmark. Why? Because they actually decided to listen to their constituents and do something about it. Is it perfect no? But if you look at the result of their action, the far right in Denmark is comparatively low compared to many other European countries. It's time for the leaders of many countries to stop pretending that problems don 't exist and acknowledged that the way the immigration issue was handled for the last 20 years is an utter abject failure.
- mempko 2y ago
  Immigrants are not why living standards are declining though. Yes, there are obviously logistic problems when populations grow quickly. However the real issue is inequality not immigration.
- pjc50 2y ago
  What specifically did Denmark do?
  - rdm_blackhole 2y ago
    They implemented tighter immigration controls, they spread the new immigrants around for better integration amongst other key changes. There is a very interesting article that can be found here: https://dnyuz.com/2025/02/24/in-an-age-of-right-wing-populism-why-are-denmarks-liberals-winning/ https://dnyuz.com/2025/02/24/in-an-age-of-right-wing-populis... Like I said, it's not perfect and even they know that.
- regularjack 2y ago
  What specifically isn't working in what concerns immigration and how has the way immigration was handled in the last 20 years been a failure? Please provide specific examples. I live in an European capital and haven't seen any of these issues that immigration is supposedly creating. AFAICT theses issues only exist in the minds of people, and thus in the media. Regardless, let's say I'm wrong and immigration is indeed creating some issues. Are these issues really so important relative to other problems a state might have that they command the amount of attention immigration gets? I call bullshit, it's purely a wrong skin color problem.
bitsage 2y ago
Not sure where you’re from, but here in the US, the wealthy elites love immigration and inefficient governments. Easily exploited workers and a weak government incapable of helping them is a billionaire’s dream. It’s uncanny how similar the past decade has been to the start of the Gilded Age.

by mempko 2y ago

amazingamazing 2y ago

what level of income and/or wealth constitutes rich and how much should they be taxed?

schmidtleonard 2y ago
What percent of your money comes from labor vs capital appreciation? Which is the hand that feeds you? Below $1M NW, you are probably labor. Above $10M NW, you are probably capital. These thresholds come from asking the question "does a conservative estimation of the passive income from these assets replace a wage?" -- below $1M, no, above $10M, yes, feel free to adjust by playing with the assumptions or plugging in wacky edge cases. The point is that incentives determine so much about politics and the incentives of each individual tend to heavily favor one side or the other which tends to translate into politically relevant policy preferences that favor one side or the other. The tax code is comically tilted in favor of capital. We should fix that. Unearned income shouldn't be taxed less than earned income, for a start. Also, if I can pay property tax on my house, mega-billionaires can pay property tax on their stock pile. But these are details, and focusing too much on details can be a distraction from the root issue: the tax code is comically tilted in favor of capital, and we should fix that.
- mempko 2y ago
  This is a great answer, thanks!
- robertlagrant 2y ago
  A hard line between labour and capital seems a bit reductive. My pension is capital. I have some shares, which are capital. I also have the security of a permanent job, paid by someone else to take risks. E.g. > These thresholds come from asking the question "does a conservative estimation of the passive income from these assets replace a wage?" Net worth doesn't necessarily generate any passive income. You could own a lot of shares in your business that are temporarily spiking, but you can't sell them for some reason. Net worth is a bad way to think about this, because it makes people think billionaires have billions of dollars in cash ready to be taxed away. When in fact if you want people to pay tax on their stock pile, you're talking about taking their property away from them because of how much the market happens to value it right now. Unlike property tax, which is to pay for the services weight of your property on the local area.
  - schmidtleonard 2y ago
    > A hard line between labour and capital seems a bit reductive. What hard line? The hard line I didn't draw with the "what percent of your money" formulation? > Net worth is a bad way to think about this, because it makes people think billionaires have billions of dollars in cash ready to be taxed away. If it's not cash it can't be taxed? I brought up real estate as a counterexample to the entire stable of "it's tooo haaaaard" arguments, and that's the weakest of them. I was expecting something taller, like the liquidity argument. But real estate comfortably refutes them all and you didn't even try to deal with that. > you're talking about taking their property away from them The government wouldn't hesitate for a second to take my property when they are taxing me waaay heavier than mega billionaires. Why the fuck should I be the slightest bit sympathetic to the sanctity of their literal entitlement? Some people put property rights on an altar and treat them as a fundamental principle, but here's the thing: property rights (at their worst) have been used to institute and defend literal slavery. If you want to put them on an altar, if you want to treat them as a fundamental principle rather than a tool to economically link investment with return, I'm going to make you own that and defend it. Do you want to go down that road?
    - tetromino_ 2y ago
dragonwriter 2y ago
> what level of income and/or wealth constitutes rich and how much should they be taxed? There doesn't need to be a crisp threshold. Progressive taxation without treating labor income as more heavily taxed than generic income which in turn is more heavily taxed than capital gains would be a good start.
- CarolineRommer 2y ago
  This! Serious economics papers are always about studying different progressive tax functions. Nobody cares about specific thresholds to separate "the rich" from the rest. It's a moot point because wealth is a continuous variable (approximately Pareto with tail index between 1 and 2, to be precise).
deleted 2y ago
[deleted]

andrekandre 2y ago

also the culture war is perfect for this, it gets people who would otherwise agree on many issues to fight over trivialities and nuances etc...

cvwright 2y ago
Yes - the strategy is to get the people who care about doing what’s right to fight amongst themselves. Then the people who care only about money and power can divide and conquer.
- andrekandre 2y ago
  > divide and conquer like they say: oldest trick in the book

Ray20 2y ago

>we need to substantially raise taxes on the rich and reduce them for everyone else The problem with these solutions is that the math doesn't add up. Either there are too few rich people in reality, and even if you can collect 200 percent from them - it won't affect the overall picture (and in the end there will be even fewer of them, and you'll have to raise taxes for everyone). Or, if we expand the category of rich - a poverty funnel is created, where taxes on the "rich" protect the "super-rich" from competition. What difference does it make that you have to pay 90% if all the money is yours, because no one will invest in competing with you, since success will bring them 10%, and failure will take everything? Everywhere in the world, the rich pay less. Even in countries with formally progressive tax rates, there are a huge number of subsidies and programs that in the end of the day boil down to the fact that the effective tax rate for the rich is lower (even if this means simply reducing their competition so that they get more money and pay a "progressive" tax on it). Because the problem is not inequality, the problem is poverty. And any measures that discourage production in the end of the day increase poverty. For this reason, any construction of socialism always ends in hunger. Because what difference does it make what just and fair distribution system you came up with if your production fell ten, a hundred or a thousand times because of such a system?

generativenoise 2y ago
You are being just as dogmatically blind. While there is truth is what you say about simply redistributing money is going to directly get people the goods and services required since that is not directly production. It does have second order effect of changing the weighting of what society produces. If people are too poor to afford food why would you bother to grow it. Taxing should be about keeping winner take all effects in reasonable check to keep markets actually functional for a good proportion of the participants.
- Ray20 2y ago
  >If people are too poor to afford food why would There is no such thing in economic as "people are too poor to afford food". Growing food - is like in the start of economic chain, if people can't afford food - they starting to grow it themselves, and unaffordability disappears. Food can be unaffordable only if you hinder the production of it with your "smart" and "fair" taxation system, for example like socialists do.

marcusverus 2y ago

> Everyone but the most well off living conditions continue to decline. This is objectively false. https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N > Instead of the obvious problem that Inequality is rising I'm old enough to remember when progs all shrieked that poverty was the big scary problem. Capitalism solved that with minimal expense. You know that scary 15% in poverty figure you hear during election season? That's based on census income data, which excludes ~90% of all welfare programs, even CASH programs like refundable tax credits! So with poverty overwhelmingly sorted, they've moved on to inequality! But even calculations of income inequality are doped up--high earners incomes are counted BEFORE taxes, and low earners BEFORE benefits. Keep that in mind whenever progs advocate for more welfare spending--even if you give it to them, they won't count it! They exclude it from the very calculations which they use as evidence of the need for ever more spending!

mempko 2y ago
That's now how you measure inequality. Look here. https://fred.stlouisfed.org/series/WFRBSN40188 https://fred.stlouisfed.org/series/WFRBSN40188 And https://fred.stlouisfed.org/series/WFRBST01134 https://fred.stlouisfed.org/series/WFRBST01134 And https://fred.stlouisfed.org/series/SIPOVGINIUSA https://fred.stlouisfed.org/series/SIPOVGINIUSA You aren't looking at the right data. This is why it's so hard to educate the public about this, even intelligent people on HN get it wrong.
- marcusverus 2y ago
  The GINI can be measured before or after taxes. The link you shared is after--this one is used in defense of the metric. A 'before tax' version[3] is invariably used when on offense. Sure, wealth inequality is growing, but this isn't a problem, it's merely an emotionally resonant issue. The left love it for the same reason they lofted the 'poverty' banner for so long--it's a Philosopher's Stone. This particular stone hails from a failed German novelist and promises to transmute other people's money into votes! Regardless, median income[0] and median net worth[1] are rising and poverty is in the doldrums--points which make it difficult to make an honest argument that we are in need of radical change. [0] https://fred.stlouisfed.org/series/MEHOINUSA646N https://fred.stlouisfed.org/series/MEHOINUSA646N [1] https://fred.stlouisfed.org/series/BOGZ1FL192090005Q https://fred.stlouisfed.org/series/BOGZ1FL192090005Q [3] https://ourworldindata.org/grapher/gini-coefficient-before-tax-wid https://ourworldindata.org/grapher/gini-coefficient-before-t...

discodonkey 2y ago

Living standards have absolutely been rising for just about everyone, and continue to do so - for example in terms of income growth[0]. People in all income tiers have seen their incomes grow consistently, albeit not equally. [0] - https://www.pewresearch.org/race-and-ethnicity/2024/05/31/the-state-of-the-american-middle-class/re_2024-05-31_american-middle-class_0-02/ https://www.pewresearch.org/race-and-ethnicity/2024/05/31/th...

Propelloni 2y ago
> albeit not equally. That's the crux. It's the same in almost all developed countries, we all have been getting more income, but most of us are not getting richer. The widening of the scissors is becoming more and more obvious, because even middle incomes suffered hard during the cost of living crisis, and continue to suffer.
- robertlagrant 2y ago
  This is mostly because of housing prices, not unequal distribution of income gains. If you gave everyone more money house prices would just go up more, because houses are being built far slower than the population is increasing.
  - courseofaction 2y ago
    Rising inequality increases asset prices as the wealthy look for more places to invest and extract rent. Gary's economics on YouTube explains this very well, with credentials.
  - olleromam91 2y ago
    We don't give everyone more money. Just the people who don't already have too much.
    - robertlagrant 2y ago
      The people with "too much" (everyone with more than the person saying the phrase "too much", presumably) aside, giving everyone more money will mean house prices will be bidded up and rents will rise, because there is an oversupply of people vs accommodation.

rdm_blackhole 2y ago

> So they will blame immigrants and "bloated inefficient governments" for the problem. And will push anti-immigration and "personal liberty" and "more free markets" as the solution. This trope is getting tiring to be honest. There are very clear issues with immigration in many countries. The issue is that for the last 20 years when these issues where brought up, the main parties just dismissed them and ostracized anyone who dare bring up the subject. This failure to address the problem is what is fueling the rise of the far right everywhere except in 1 country, Denmark. Why? Because they actually decided to listen to their constituents and do something about it. Is it perfect no? But if you look at the result of their action, the far right in Denmark is comparatively low compared to many other European countries. It's time for the leaders of many countries to stop pretending that problems don 't exist and acknowledged that the way the immigration issue was handled for the last 20 years is an utter abject failure.

mempko 2y ago
Immigrants are not why living standards are declining though. Yes, there are obviously logistic problems when populations grow quickly. However the real issue is inequality not immigration.
pjc50 2y ago
What specifically did Denmark do?
- rdm_blackhole 2y ago
  They implemented tighter immigration controls, they spread the new immigrants around for better integration amongst other key changes. There is a very interesting article that can be found here: https://dnyuz.com/2025/02/24/in-an-age-of-right-wing-populism-why-are-denmarks-liberals-winning/ https://dnyuz.com/2025/02/24/in-an-age-of-right-wing-populis... Like I said, it's not perfect and even they know that.
regularjack 2y ago
What specifically isn't working in what concerns immigration and how has the way immigration was handled in the last 20 years been a failure? Please provide specific examples. I live in an European capital and haven't seen any of these issues that immigration is supposedly creating. AFAICT theses issues only exist in the minds of people, and thus in the media. Regardless, let's say I'm wrong and immigration is indeed creating some issues. Are these issues really so important relative to other problems a state might have that they command the amount of attention immigration gets? I call bullshit, it's purely a wrong skin color problem.

bitsage 2y ago

Not sure where you’re from, but here in the US, the wealthy elites love immigration and inefficient governments. Easily exploited workers and a weak government incapable of helping them is a billionaire’s dream. It’s uncanny how similar the past decade has been to the start of the Gilded Age.