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>As much as you want to tax "the wealthy", there really aren't enough wealthy people to pay for everything, The point isn't to make them pay for everything. Th

>As much as you want to tax "the wealthy", there really aren't enough wealthy people to pay for everything, The point isn't to make them pay for everything. The point of taxing them is to mute the inflationary effect of letting them keep their money. The primary noticeable effect of taxing the wealthy on the rest of us would be to make property more affordable once again.

JonFish85 11y ago
"The point of taxing them is to mute the inflationary effect of letting them keep their money." What? How is it inflationary to let "the wealthy" keep their money vs. artificially raising the wages of the minimum wage workers? "The primary noticeable effect of taxing the wealthy on the rest of us would be to make property more affordable once again." Also--what? Being that we're on Hacker News, the majority of people here are probably making $100k+ a year and are solidly in the top 10% of wage-earners in the country. We're the ones driving up housing prices on a macro scale across the country, not the few people that have hundreds of millions to spend.
- crdoconnor 11y ago
  >What? How is it inflationary to let "the wealthy" keep their money Because they spend it. >We're the ones driving up housing prices on a macro scale across the country, not the few people that have hundreds of millions to spend. Both are. The few people with hundreds of millions of dollars will buy large properties in central locations in multiple cities, shrinking the available housing stock for the rest of us.
  - JonFish85 11y ago
    "Because they spend it." So does everyone, they just spend it differently. Bill Gates' money isn't sitting in a checking account, it's in stock certificates. High net-worth people don't put money under their mattresses, they spend it, albeit in different ways. I don't know how to compare consumer spending vs. investments, so I can't say if one is "better" than another, but that money isn't just sitting in bank accounts. Available housing stock on the whole is just fine in the US. Sure, you and I probably can't afford to live on Park Avenue or overlooking Central Park, but that's because those properties attract worldwide money. We're not there yet. San Francisco's housing problems aren't as simple as "some people have money". Taking money away from people isn't going to solve this.
    - crdoconnor 11y ago
      >So does everyone, they just spend it differently. Yes, and the wealthy spend more, so the effect of their spending is more inflationary. >Bill Gates' money isn't sitting in a checking account, it's in stock certificates. High net-worth people don't put money under their mattresses, they spend it, albeit in different ways. Quite. This is why the price of property is absurd and P/E for the stock market is so low. Unfortunately the middle and working classes get hit by this just as much as they get hit by rises in the price of milk or eggs. >Available housing stock on the whole is just fine in the US. Sure, you and I probably can't afford to live on Park Avenue or overlooking Central Park, but that's because those properties attract worldwide money. We're not there yet. San Francisco's housing problems aren't as simple as "some people have money". Taking money away from people isn't going to solve this. Oh yes it would. Hit the wealthy with huge taxes and they would end up selling those properties to pay off their tax bill. That would lead to a spiraling decrease in San Francisco and New York property prices as well as a stock market decline.
yummyfajitas 11y ago
This is completely backwards. The wealthy primarily invest their money; it is mainly spent on non-consumer goods (servers, backhoes, research, etc). If we redistribute to people with a higher propensity to spend, then we are shifting wealth from investment to consumption. This will raise demand for consumer goods, hence raising prices, and causing inflation. Note that an increase in the speculative value of real estate is NOT inflation - inflation incorporates the cost of housing (rent or owner-equivalent rent), not the speculative value of land. Similarly, it's not inflation if FB or MS goes up. By the way, if you believe that money going into the hands of the wealthy is the best way to cause inflation, it therefore follows that the best economic stimulus is tax cuts for the wealthy. Do you favor such cuts during times of recession?
- toomuchtodo 11y ago
  > By the way, if you believe that money going into the hands of the wealthy is the best way to cause inflation, it therefore follows that the best economic stimulus is tax cuts for the wealthy. Do you favor such cuts during times of recession? In a recession, you want to stoke demand. Inflation isn't a worry, deflation is. You therefore give tax cuts to the people who are going to spend (ie not the wealthy). "Overall, tax cuts for the bottom 90% tend to result in more output, employment, consumption, and investment growth than equivalently sized tax cuts for the top 10% over a business cycle frequency." http://www.forbes.com/sites/taxanalysts/2015/04/24/tax-cuts-for-the-rich-dont-create-many-jobs-but-what-about-tax-hikes/ http://www.forbes.com/sites/taxanalysts/2015/04/24/tax-cuts-...
  - yummyfajitas 11y ago
    Yes, that's the point I'm making - I'm disagreeing with this: "The point of taxing them is to mute the inflationary effect of letting them keep their money." But if crdoconnor disagrees and also is logically consistent, he should also disagree with you. Somehow I suspect he won't. Also, your understanding of Keynesian economics is slightly confused; the goal is to cause inflation in order to reduce real wages.
    - 11y ago

JonFish85 11y ago

"The point of taxing them is to mute the inflationary effect of letting them keep their money." What? How is it inflationary to let "the wealthy" keep their money vs. artificially raising the wages of the minimum wage workers? "The primary noticeable effect of taxing the wealthy on the rest of us would be to make property more affordable once again." Also--what? Being that we're on Hacker News, the majority of people here are probably making $100k+ a year and are solidly in the top 10% of wage-earners in the country. We're the ones driving up housing prices on a macro scale across the country, not the few people that have hundreds of millions to spend.

crdoconnor 11y ago
>What? How is it inflationary to let "the wealthy" keep their money Because they spend it. >We're the ones driving up housing prices on a macro scale across the country, not the few people that have hundreds of millions to spend. Both are. The few people with hundreds of millions of dollars will buy large properties in central locations in multiple cities, shrinking the available housing stock for the rest of us.
- JonFish85 11y ago
  "Because they spend it." So does everyone, they just spend it differently. Bill Gates' money isn't sitting in a checking account, it's in stock certificates. High net-worth people don't put money under their mattresses, they spend it, albeit in different ways. I don't know how to compare consumer spending vs. investments, so I can't say if one is "better" than another, but that money isn't just sitting in bank accounts. Available housing stock on the whole is just fine in the US. Sure, you and I probably can't afford to live on Park Avenue or overlooking Central Park, but that's because those properties attract worldwide money. We're not there yet. San Francisco's housing problems aren't as simple as "some people have money". Taking money away from people isn't going to solve this.
  - crdoconnor 11y ago
    >So does everyone, they just spend it differently. Yes, and the wealthy spend more, so the effect of their spending is more inflationary. >Bill Gates' money isn't sitting in a checking account, it's in stock certificates. High net-worth people don't put money under their mattresses, they spend it, albeit in different ways. Quite. This is why the price of property is absurd and P/E for the stock market is so low. Unfortunately the middle and working classes get hit by this just as much as they get hit by rises in the price of milk or eggs. >Available housing stock on the whole is just fine in the US. Sure, you and I probably can't afford to live on Park Avenue or overlooking Central Park, but that's because those properties attract worldwide money. We're not there yet. San Francisco's housing problems aren't as simple as "some people have money". Taking money away from people isn't going to solve this. Oh yes it would. Hit the wealthy with huge taxes and they would end up selling those properties to pay off their tax bill. That would lead to a spiraling decrease in San Francisco and New York property prices as well as a stock market decline.

yummyfajitas 11y ago

This is completely backwards. The wealthy primarily invest their money; it is mainly spent on non-consumer goods (servers, backhoes, research, etc). If we redistribute to people with a higher propensity to spend, then we are shifting wealth from investment to consumption. This will raise demand for consumer goods, hence raising prices, and causing inflation. Note that an increase in the speculative value of real estate is NOT inflation - inflation incorporates the cost of housing (rent or owner-equivalent rent), not the speculative value of land. Similarly, it's not inflation if FB or MS goes up. By the way, if you believe that money going into the hands of the wealthy is the best way to cause inflation, it therefore follows that the best economic stimulus is tax cuts for the wealthy. Do you favor such cuts during times of recession?

toomuchtodo 11y ago
> By the way, if you believe that money going into the hands of the wealthy is the best way to cause inflation, it therefore follows that the best economic stimulus is tax cuts for the wealthy. Do you favor such cuts during times of recession? In a recession, you want to stoke demand. Inflation isn't a worry, deflation is. You therefore give tax cuts to the people who are going to spend (ie not the wealthy). "Overall, tax cuts for the bottom 90% tend to result in more output, employment, consumption, and investment growth than equivalently sized tax cuts for the top 10% over a business cycle frequency." http://www.forbes.com/sites/taxanalysts/2015/04/24/tax-cuts-for-the-rich-dont-create-many-jobs-but-what-about-tax-hikes/ http://www.forbes.com/sites/taxanalysts/2015/04/24/tax-cuts-...
- yummyfajitas 11y ago
  Yes, that's the point I'm making - I'm disagreeing with this: "The point of taxing them is to mute the inflationary effect of letting them keep their money." But if crdoconnor disagrees and also is logically consistent, he should also disagree with you. Somehow I suspect he won't. Also, your understanding of Keynesian economics is slightly confused; the goal is to cause inflation in order to reduce real wages.
  - 11y ago