We don't actually live in a representative democracy, we live in a constitutional republic — with things like caps on representatives, the electoral college and gerrymandering, your vote is likely worth a lot less than someone's vote in Ohio or Alaska.
I would flatly reject the idea that a just-graduated neurologist with a negative net worth due to loans is “poor”.
Wealth being the integration of gains - consumption over time makes it a poor metric for looking at society as a whole.
Something like 50% of Americans will be millionaires at some point in their lives—upper quintile per this chart, typically later in their earnings years. Almost all of them started “poor” as young adults, per this chart’s definition.
With this kind of wealth distribution, there's no point doing any job which services regular people. Everyone should become an informant or bodyguard for a rich person. That's going to be the only kind of job that pays in the future.
Look at that last bar; consider just the annual yield or interest payment on that wealth; soon, it's going to be more than all other bars combined. If people understood the situation, they would all stop working and start making lists of who these people are and work for them. That's the only logical (legal) thing to do. Every other job or career is a waste of time.
I don't disagree with you. Obviously a doctor can bring in a lot of money. In the same a stock can be valued as the sum all future cash flows w/ a discounted cash flow analysis, a doctor's future income can have a quite high valuation.
That being said, one accident or illness that strips away that doctor's ability to earn, leaving them in a soul crushing amount of debt that can't be discharged via bankruptcy. Their debt obligations are real.
I have, and will always have, a simple rule when evaluating job offers: can I pay my mortgage with that today? No one is feeding your broke neurologist based on future returns.
Pretty jaw dropping. Most people here probably have around $5-10M in assets given we’re mostly in tech. It’s really eye opening to see that that $10M hardly cracks the top 98th percentile.
Though this is also a slightly misleading metric. Plenty of “poor” people are only temporarily poor. When I graduated grad school before starting at Google all those years ago, I had a negative net worth.
edit: sorry, bringing a SV perspective, realize my comment doesn’t apply to everyone
> Most people here probably have around $5-10M in assets given we’re mostly in tech.
You would be surprised. Not only because, as you point out, recent graduates often have a negative net worth, but also because people tend to increase their spending in lockstep with their income.
Saving millions takes the intersection of multiple factors: sufficient disposable income, prioritizing investing over lifestyle, long-term discipline to stick to the plan, and luck to keep it all going smoothly.
> Most people here probably have around $5-10M in assets given we’re mostly in tech
Even in a SV world I'm trying to get my head around the logical leap that gets you to this number. Median comp in SV is <500k - that's 20 years in the business to earn $10m ignoring taxes & your actual living expenditure. Obviously we can jump that with equity, but that's still not moving the dial far enough for the "majority" to be up at those heights.
I don't see how we're getting anywhere near these figures without generational wealth (assume this is the answer).
An awful take from someone who clearly hasn’t studied California itself.
Around 17% of CA residents live below the poverty line, which means MILLIONS of adults that are not students. Elderly are a significant chunk of that number.
I think your comment strikes at an issue that everyone feels but is hard to articulate - there's true poverty (Appalachia, say) and then there's "working-class poor" which you can try to define but nearly everyone puts themselves into it. Perhaps a better term is "paycheck to paycheck" - by almost any measure, anyone gainfully employed in the USA is rich beyond the world's wildest dreams - but telling a family making $40k a year that they make more than 90% of the world doesn't help.
"by almost any measure, anyone gainfully employed in the USA is rich beyond the world's wildest dreams"
I'm not sure your mental model holds. A lot of Europe has higher standards of living than the USA. And a lot of Asian countries have made huge strides in the last few decades. Also consider the difference between Mississippi and Massachusetts. I wouldn't say that anyone gainfully employed in Mississippi is "rich beyond the world's wildest dreams".
Which even "poorest in Mississippi" is above - but that factoid is entirely useless to basically everyone, and frankly insulting to our poor family in Mississippi.
seems to be a general rule of life, some people are just born with the right combination to be really good at a certain game at a certain point in time. The only issue with wealth is that they can influence other games in which they have no ability just the same and that is dangerous for a democracy. Imagine if roger Federer was messing with the elections just because he was the best at tennis.
This raises such an interesting question, how much of the wealthiest individuals wealth is due to skill, and how much is because in an unequal system there has to be someone at the most wealthiest point.
I think it's an interesting thought, I'm not sure I have a hot take here or anything. The likes of Jeff Bezos and Elon Musk are clearly good at amassing wealth (and interested in amassing wealth) but I suspect a lot less is attributable to skill than many would think.
So bezos’ parents were in a position to fund him to the tune of hundreds of thousands of dollars, Enron musks dad owns mines, bill gates mom was on the IBM board. It very much has little to do with skill.
I think that's pretty much true- it's worth saying there are other people who have the insane privilege of the three you mentioned who aren't some of the wealthiest people in the world, so there's some kind of explanation needed aside from just privilege, even if that's just "luck".
"Closer" in what sense? Does Elon Musk have a markedly more lavish lifestyle than them? Is his retirement safer? How many politicians are campaigning on investigating, regulating and prosecuting the hundred-millionaires? Do media run scare stories about the drug use and sexual promiscuity of the hundred-millionaires, suggesting that they have children from too many partners?
- Most of that wealth is tied up in assets offering services for americans (servers / warehouses). It would be much worse if the rich decided to spend all of that on consumption rather than keep reinvesting it in assets.
- Even the LHS of that chart Americans are some of the wealthiest in the world. A lot of the middle class from many other countries would love to be on the LHS of that chart.
- No one is expected to build wealth on a 40 hour minimum wage job. It is the bare minimum and most people get paid more.
- Americans don't want wealth. Our spending habits are abysmal. I suspect if you gave every American $500K the chart would revert back to this in like 12 months
These assets DO offer services to them. The whole point of these assets is to make products that have value to other Americans. If the assets / owners don't do that then their net worth decreases and disappers.
Putting it in the "hands of society" is crazy talk. Government / elected officials are awful at allocating capital, negotiating labor, holding people accountable.
> Most of that wealth is tied up in assets offering services for americans (servers / warehouses). It would be much worse if the rich decided to spend all of that on consumption rather than keep reinvesting it in assets.
Why would that be worse? What online services are so important that it's better to have them than to lift some people above the poverty line? Rich people spending is the next best thing after taxing them - it distributes their money and provides jobs. It would strictly improve the society if Bezos spent lots of money and folded his servers and warehouses - in so many different ways...
I personally would rather have next day delivery and not waste my time shopping and driving from store to store.
What jobs do you think it creates? You really want all our labor pandering to billionaires? Why would anyone give attention to middle class if the billionaires were forced to spend all their money? How expensive would your life get if the billionaire class redirected all of their wealth toward frivolous consumption.
> Most of that wealth is tied up in assets offering services for americans
Yeah. Like renting a house for a mother of 2 children who will never get her own by selling her labour, while the renter uses her money to buy more units.
A large portion of billionaire wealth isn't reinvested in productive assets. It comes from holding onto assets like corporate shares and land that grows in value based on the asset's ability to extract profit or rent. Or from distorted (speculative) demand for that asset that is completely detached from its productive output.
Someone like Bernard Arnault is worth around $160B (wealth from luxury brands like Louis Vuitton, Dior, and Tiffany). That paper valuation exceeds the total national wealth of many entire countries:
https://en.wikipedia.org/wiki/List_of_countries_by_total_pri...
How does it keep growing if it isn't invested in productive assets?
Yes he is valuable because he makes a product people want. That is how life works. If you want him to be poor, convince people to buy something other than luxury brands.
I’m not a one-percenter and my life is great. I don’t even understand why anyone cares about equality. The point is a rising standard of life. Equality isn’t anywhere near my top objectives. Pareto-optimal trades are good. Adding an implicit objective to minimize abs(w_i - w_j) makes many win-win things impossible.
The coordination win that came from “thou shalt not covet” is substantial and we forget it at our own peril.
Retirement age keeps increasing, public healthcare keep getting defunded. My tax money is getting used to enrich war mongers and my cost of life keeps increasing as a result of all of that.
Also my constitutional rights are ignored daily.
You understand why I might not be feeling very happy that YOU are doing great?
This is about wealth inequality, i.e. how far the scale is leaning. This has, as the website explains, some funny effects: looking from the top, you are effectively starving the people that pay you and your descendands. That might work for a few years, but if everyone's hungry it's gonna be heads on pikes no matter how many bunkers you build and how much you pay for personal protection.
People care about equality because the absence of it is inequality, and that leads to political control. Even if you live a good life today, it is not guaranteed. Democracy, human rights, all can be eroded if everyone ignores politics and the economy.
You’re probably not one paycheck away from homelessness, and probably have the protection of the legal system provided you don’t upset the wrong people.
But you’re probably one health scare away from it, you just don’t realize it.
Three good reasons to care about inequality itself:
1. Outsized political influence (in theory can be mitigated by laws controlling corporate spending, but obviously those laws themselves are subject to manipulation by the rich and powerful)
2. Distortion in who the economy serves. The beauty of capitalism is that it's a problem-detection and problem-solving system. If a narrow set of people have a huge portion of money, the economy becomes unduly optimized toward satisfying their wants and needs.
3. Despite best efforts, we ultimately must share a lot of the same commons. Even being a billionaire in NYC or San Francisco can't really give you a walk to work or your child's school that feels as safe as it does in a more equal society that takes better care of its unwell and poor.
All 3 points can be blamed on primarily on your govt, not on someone being rich. Even when the rich influence the govt, it's the govt to blame. Aren't they supposed to protect you? Govt, for the people, by the people etc...
The conversation about "why should I care about this" is a conversation about "should anything be done about this." The mechanism by which one would "do anything" about this is called government. So sure.
Do you care about concentration of power in a single person or single family? What happens when you have conflict with someone who has orders of magnitude more purchasing power than you? Do you think it's good or bad for the social order or democracy if one individual is able to exert more power than an entire city or state just based on inherited wealth?
You should care about equality because inequality tends to make places worse for everybody. Yes that includes those rich people. You can't go to the beach because it's all built full with private resorts. Those rich people can't walk the street and have to live in walled villa's for fear of crime. They also can't easily get married to who they want because they have to hold their assets. Vietnam is poorer than South Africa per capita, but significantly safer and more pleasurable to live. Would you rather be top 10% in South Africa or Vietnam?
What is interesting is that this was true centuries ago too. Life as a noble in the middle ages was stressful as hell and you couldn't even decide on your own lovelife. Read Seneca and the first thing he writes is that Augustus (whom he knew personally) was constantly complaining about his busy life and dreaming of a retirement that never arrived.
Inequality by itself doesn't cause bad safety. the following countries have a higher share of wealth controlled by the top 10% than vietnam and also a lower homicide rate: singapore, uae, switzerland, sweden, qatar. that's just off a very quick search i'm sure there are more. Certainly in none of those countries are people hunkering down in private fortified castles for fear of stepping out in public.
Rank order of income inequality (and coincidentally wealth inequality): South Africa > US > Vietnam
Rank order of preference to be top 10% in for me: US > Vietnam > South Africa
So your method does not disabuse me of my belief. It’s quite clear that equality has not made Vietnam more desirable than the US. In fact, there are some 400k foreign born in Vietnam (<1%) vs the US having 15% foreign born (a stark enough difference made worse by forcing foreign-born to be from non-neighbors). So I must reasonably conclude that my rank order is likely shared by others and that others too are not, in fact, lured by equality.
There is an old immortal tweet: cars have windows and go; houses have windows and don’t go; so it’s not the windows that make things go.
If inequality were as critical we’d expect a perfect rank ordering of distant migrant population attempts matching it. The numbers are so vastly different that one cannot conclude equality is of great importance to most.
You or the farmer you buy food from competes for farmland with Bil Gates.
You or the one providing your house builder with wood competes for lumber forest with Alex Karp.
The list goes on and on.
It appears trough technological innovation the standards of life rise in many ways but trough innequality it can affect the standards/ affordability of our basic needs.
You got it backwards. Bill Gates and Alex Karp don’t pay megamoney for lumber or farm land. They consume a bit more than the average person, but not by the same %age as they are richer.
But everyone else can’t afford basic necessities or furniture anymore. And so being a farmer or a woodworker or whatever becomes a less attractive job, less people will do it, and you will have a harder time finding someone fixing your plumbing. Or pay a premium.
Instead, the ultra-wealthy are demanding extreme luxury, and so a would-be farmer is now a hotel page boy carrying around some rich dudes’ luggage, hoping for a tip.
Bill Gates buys huge amounts of land precisely for ecology: Beef meat causes global warming in a disproportionate way compared to chicken or even disproportionate per euros or per gram of protein compared to lentils. All ecologists agree that beef/red meat should disappear from our plates if we want to overcrowd the Earth with more equal people, and along with erradicating a hugely deathly disease that is malaria during his lifetime, Bill Gates will also have accomplished that dream too.
I find a lot of consistency of his audience in hating him for the very reason that he implements his audience's wishes. To this audience, there is no redeeming oneself.
>Bill Gates buys huge amounts of land precisely for ecology
Yes and he was gonna give a vast share of his wealth away for the good of the many over 5 years and then tripled it. woops. Let us not pretend farmland has not been a good investment in those parts.
Let us be honest. Almost every such good thing he does is a tax credit which polishes his image and legacy. He was a pretty cutroath businessman and there's no reason for me to now paint him with some saintly image.
>Beef meat causes global warming in a disproportionate way compared to chicken or even disproportionate per euros or per gram of protein compared to lentils.
I can get behind the idea that beef has a bigger carbon footprint due to the fossil fuel fertilisers used to grow their feed as compared to the conversion ratio freaks that modern meat chicken breeds are.
The fact that the methane from their farts is somehow the long term issue I however reject.
And I'd like to point out that without much of both that excrement and fossil fuel based fertiliser we have a famine on our hands so 'overcrowd the Earth with more equal people' doesn't seem like such a fine goal.
>I find a lot of consistency of his audience in hating him for the very reason that he implements his audience's wishes. To this audience, there is no redeeming oneself
Explain to me why do you presume I am "his audience".
Almost every such good thing he does is a tax credit which polishes his image and legacy. He was a pretty cutroath businessman and there's no reason for me to now paint him with some saintly image.
Bill Gates has had a major role in more than 120 million extremely poor children not dying of horrible diseases in some of the most destitute places on earth.
But he bundled a browser with his OS thirty years ago, so fuck all that, right?
Then I guess billionaires really should pay less taxes unlike us plebs since they're so much better at picking out and solving the wrongs of the world.
It is good that Microsoft was bribing some african governments because clearly they could use the money so much better saving them from themselves by redirecting that income to the global fund (and tax credits)
Perhaps we should incentivise his veiled land purchases for the common good since on thing obviously absolves of another.
BTW just since you use it for the rethoric. Can I also point out how that major role in 120 million children (by their own estimation and 40mil since 2000 on some other own estimation) includes the work of everyone else donating to, remotely involved with or working in line with his organisation.
You know including my tax money going to the the vaccination drives of Gavi, the WHO, UNICEF, etc
It seems to miss the bit where bill himself attributed the vast majority of global health and development funding to donor nations.
You think we could get a tax credit for our major role in that?
EMA food prices in number of hours of work required to sustain oneself and they have fallen for half a century. Bill Gates has not only been alive for the entirety of that period but he has been leading Microsoft for the majority of it. If this is how the list is (and I’m simply going to judge it by its first element) then it seems to provide stronger evidence against equality being a prime goal, considering wealth equality has dropped during that period.
I'm not going to point at bill gates buying and leasing out loads farmland and attribute to it new corn strains and higher feed conversion chicken breeds.
You may as well be calling for soviet style state controll the way consolidation, top down ownership is and competition mechanics are dismissed or praised depending on the standpoint.
They’re inextricably linked. The ceiling is being raised by people at the top pillaging from people at the bottom. Sure, in a vacuum, raising the floor without regard for the ceiling might work but in the real world it does not. Capitalists choose to believe that the floor today is better than the floor 20 years ago because even poor people have iPhones but when you look at the actual life people lead, it is getting worse.
If anything, “raising the floor” is the Trojan horse.
Your perspective though depends on thinking the economy/money/whatever is a zero sum game, and if a person's wealth goes up, they must have taken it from somewhere else. In general, wealth is generated by growing the economy.
This isn't to say I don't think some companies/individuals/shareholders have absolutely taken the piss compared to wage earners.
I'm not sure why people push this false narrative around jealousy. Well, I could speculate, but that likely wouldn't be helpful.
I have no desire to be rich, certainly not as rich as the far right 1% column. I find that level of wealth nauseating and embarrassing. But regardless, "legitimately earned wealth" is doing a lot of work in that last sentence. Perhaps (doubtful) it's possible to earn that much while being legally legitimate, although that speaks more to how fucked up our system is than anything else, but certainly not possible to do so in a morally legitimate way.
All I want is that a rich person can't strongly direct the government to do things like idk start wars because they happen to own an intelligence/arms manufacturing company or control how food is regulated so their pocketbook grows bigger at the expense of the health of the country and the taxpayer.
Would you be ok to live in a democracy where your vote goes into the garbage bin instead of the voting box? Because that's where it goes if you aren't rich.
If you are trying to buy some place to live, it doesn't just matter how much money you have, it also matters if there are lots of people many times wealthier than you bidding for the same realestate.
More money doesn't create more things to buy or more people making things, its just means more money competing for the same things to buy. Other people having more does diminish your share, of the cake. Yes, we can make the cake larger, but the best way to do that is for more people to get more opportunity to fulfil their potential, by getting a reasonable share to do so.
Wealth imbalances are bad largely because many assets have upper limits on available quantity, ie. the amount of land in most countries is relatively stable. If those assets are hoarded by a relatively small number of people, it's much harder for less wealthy people to become more wealthy. Our entire socioeconomic system is based on the premise that one can work hard and change their lot, so making sure that's actually possible is important for societal stability even if you don't have any religous/moral/ethical qualms about hoarding wealth.
First the premise of our socioeconomic system. I disagree entirely. Our system is premised on the thesis that if you are useful to others, they are willing to reward you for the utility you bring them; and that it is advantageous for us collectively to preserve a rule of law whereby people might interact safely in this way.
One might work hard and fail or one might work lightly and succeed. Bulletball guy certainly worked a lot harder than many product managers I know.
Now the question of assets of limited supply. That’s sound. But that’s a distribution of assets of limited supply problem. It is entirely possible to have great wealth inequality with low land ownership concentration - in the US 67% of people live in owner-occupied housing. Scotland has much higher land ownership concentration - but lower wealth inequality.
So fixed supply asset concentration can exist without wealth inequality - which, to be clear, is the form of inequality I was talking about considering the original post is about it.
> In 2011, Michael Norton and Dan Ariely asked more than 5,000 Americans how they thought wealth was split between the five fifths of households, and how they would ideally split it. The Companion spreads those five shares across all 100 percentiles of the 2026 wealth total in a smooth curve (Appendix 3). Many different curves fit five numbers, so these two shapes are only illustrations. The actual bars come from percentile-level data. These two curves do not.
AKA it's purely vibes based. The "ideal" distribution more extreme than just dividing GDP and dividing it equally every year because old people naturally have more time to accumulate wealth.
Well, this was discovered long time ago, by Vilfredo Pareto, this is exemplification of his 90/10 rule. Having said that... We should be more honest here when we talk about wealth.
If one asks "how much, say, Elon Musk, is worth" we see some crazy numbers with kirjillions of zeros. But those are not "his" money, this is how much his companies are estimated to have. Yes, he has large personal fortune, but it is nowhere near those huge billions of billions amounts.
Second, staying with Elon example, his companies are paying people and other companies that pay people, so there is huge army of people who have food in the fridge because of Elon Musk (I've seen some estimates around ~1 million people overall). Again, they are nowhere near to be as wealthy as Elon, but still, they have a decent live thanks to his companies.
> this is how much his companies are estimated to have
Not even ‘to have’, just ‘to be worth, if all of their shares could be sold at the price of the recent ones’. It’s a number only loosely (albeit obviously positively) correlated with actual spending power.
Elons ownership of those companies is not what puts food in people's fridges, nor is that amount of power concentration a natural, good or even defensible thing.
The whole point is that he shouldn't be able to exert autocratic control over large swathes of the economy and control that many people's lives.
It’s not about “cash at hand”, it’s about who owns “stuff”. In days past people knew that the aristocracy owned them, their families, the land they work, and the output of their work by a God given right flowing from the anointed King. It was easy to see too - those people living in palaces up the hill owned everything, you owned nothing.
It’s more hidden now. We all have rights and freedoms and whatnot. But there are still people who “own stuff”, and people who don’t. With shades of gray in between those two extremes. It’s good to be cognizant of the system you inhabit relative to what has existed throughout history so you can make good decisions and position yourself accordingly.
I used to buy this sort of arguments, but then saw him fork $45B to buy Twitter, on demand, so...
> his companies are paying people and other companies that pay people
Yes, his companies, not him. He's not doing much, except distracting part of his workforce to work on vanity projects such as flying cars or mile-long vaccuum tubes, or spending some of his vast wealth to buy politicians that will further the cause of wealth inequality. Get rid of him, and the system works much better for everyone. Him and others like him.
Does factor in the K shaped reality we're entering where if white and blue collar jobs become automated there will be only rent seekers and extreme unemployment?
Kind of makes a point to have a wealth tax. As the top 1% of w2 earners are paying a disproportionate amount of tax relative to too 1% of wealth holders.
That or just raise interest rates to force these people to sell more equity
Top salary earners, who do manage to save somewhat for retirement end up getting punished by these wealth taxes as well, especially since, generally, you need money in order to be able to move money around, in order to be able to save money on these sorts of taxes.
They get punished by wealth tax because the crooks who implement wealth tax put the limit at some ridiculous point that ends up impacting "normal people". The whole point of wealth tax is to tax the ultra rich, so you could put the limit extremely high like $5M or even $20M and it wouldn't affect anyone except those who can easily afford it. But they don't do that, I assume because they want people to hate it so they can remove it later.
If Elon musk can spend $500 million dollars every election year (in addition to everything else he does) the gains aren't unrealised and he can pay $500 million in taxes every year. Really the amount he can afford to pay and should fairly pay, imo at least 3%, would be much higher than $500 million.
I think that instead of a wealth tax it makes more sense to change how we tax in relation to the financial instruments the wealthy use.
Capital gains: this should just be income.
Unrealized gains: The argument against wealth taxes are often related to unrealized gains needing to sell blah blah. If you get a loan on your stock value, at that moment the gains should be considered realized and you should be taxed via capital gains (which would be at the level of income tax). Ultra-wealthy use loans against their portfolio to avoid realizing their gains. Make that not possible.
(Just an objective comment, I'm not positioning here) this honestly puts the "tax the rich more" in perspective. A tiny tax increment to the rightmost column would provide more money than 100 years of all the other pitiful contributions together.
There is a certain tautology to "tax the rich" - a country can't exactly tax the poor. The poor have no money. Taxes on poor people are more about the principles of fairness and to some extent transparency than because they have the financial resources to contribute meaningfully.
It'd be interesting to do the same graph by real consumption. I bet it'd be much more equal - most of the wealth is tied up in systems that keep the country ticking over and are only providing paper benefits to the owner. Which is why I say "transparency" - once you track what happens in real terms, "taxing the rich" almost certainly becomes "everyone ends up with less". If you take real resources away from the person who owns the McDonald's ice cream machine in real terms I have a hard time seeing how it won't come out of the lifestyle of the dude buying icecream. The person getting the money wasn't consuming anything real.
The primary benefit of massive wealth is power. It's an intangible, but it's very real. It can't be dismissed as paper wealth.
And it's not like taxes destroy wealth. Distributing from the person who owns the ice cream machine to the person buying ice cream puts the money in the hands of the person far more likely to spend it quickly. On ice cream, making the business case for owning ice cream machines better, not worse.
> The primary benefit of massive wealth is power. It's an intangible, but it's very real. It can't be dismissed as paper wealth.
I mean, sure. The follow up thought is after that power has been taxed away then someone else is going to need to be taxed for the raw resources that are needed. If welfare checks start being paid out with intangible benefits it'll lead to loud complaints. That gets to the heart of the problem with taxing the people with truly enormous amounts of wealth, they mostly have power, which isn't much use to someone who needs food and shelter. The tax burden has fall somewhere in the logistics chain that produces the houses and the food (although maybe a long way upstream).
> Distributing from the person who owns the ice cream machine to the person buying ice cream puts the money in the hands of the person far more likely to spend it quickly
I'm not going to disagree with that, but I will point out that this is why they couldn't afford the ice cream machine in the first place. Consuming the seed corn is a road to eventually having no corn.
There is an economic optimum amount of ice cream production and there isn't any reason to believe it isn't being hit under the current system. It isn't obvious if the need is for more or less ice cream machines. Moving ownership of the machine around doesn't obviously change the amount of ice cream produced; and its owner isn't consuming the machine. But a wealth tax on the ultra-wealthy is pulling all those levers on the assumption that making random changes in ownership has to help. It probably won't.
> I'm not going to disagree with that, but I will point out that this is why they couldn't afford the ice cream machine in the first place. Consuming the seed corn is a road to eventually having no corn.
The modern capitalistic system has devised many fabulous ways of enabling people to buy ice cream machines and seed corn without being able to afford it individually. Equity and loans are the two most obvious, there are many more.
That is the main reason that American capitalism has thrived. Because you don't have to be rich to buy ice cream machines.
> If you take real resources away from the person who owns the McDonald's ice cream machine in real terms I have a hard time seeing how it won't come out of the lifestyle of the dude buying icecream.
What you're describing is called "Trickle Down Economics", and has led to 50 years of economic failure.
That seems wildly incorrect. In the US the bottom 50% are closer to ~3% of federal taxes.
The top 1% pay about 38%. The top 0.1% is simply not a lot of people and not helpful for thinking about how much you can juice them in absolute dollar amounts.
Doesn't this just prove the OP's point? The government gets as much money from the top 0.1% as it does from the bottom 50% means that it is getting a lot of their money from the wealthy.
The vast, vast majority of wealth (to the wealthy) are in form of company ownership, stocks.
So let's say you start taxing the ultra-wealthy based on their assets. They then have the option of:
1) Make the company pay out dividends, so that owners can afford to pay their wealth tax. Not ideal, because what happens during bad years where there's no dividends to be paid out? Or if companies want to re-invest in the company?
2) Sell stocks. Again, not ideal. This would mean that you lose some ownership year by year.
3) Take up personal loans to cover taxes.
etc.
Note, I'm NOT saying that we shouldn't do anything. But this is just the consequence of such assets (stocks) being the dominant asset among the wealthy.
You didn't really highlight how any of this is a problem? Yes, if you sell some of your assets, whatever kind, to pay for taxes then you'll have less assets in the end. That's literally how taxes work.
Maybe it's just me, but I don't see much wrong with any of the options above. Most of my assets aren't liquid either, yet I'm still taxed at a much much higher rate (when compared to total assets) than the top. I have to make decisions like "how much will I need good health care coverage next year?", which I shouldn't have to say isn't "ideal" either.
You're taxed on income, like anyone else, but the big difference is that wealthy people get liquid cash through tricks like borrow, spend, die. They also have other ways to gain wealth that don't involve a cash phase.
I'll get hate from some corners on this, but I'm coming to see the wisdom in not significantly increasing the tax rate on the rich, but instead broadening the tax base. For example, count tricks like borrow, spend, die as cash; make stock buybacks illegal; treat compensation in the form of assets as cash income at the valuation price when the transfer happens; count inheritances above $X million as income, cash income.
Um, tough, if you want to be a billionaire, you get to sell a tiny fraction of your assets to pay taxes. If they don't want to sell assets, they can pay themselves a larger salary or something. Or, like you said, take loans which is literally what they do to afford their lifestyles, just use that for taxes. I don't really care which.
"Taxing the rich" is literally solving the thing that is a problem today.
> This would mean that you lose some ownership year by year.
What's the problem? It's not like you'll have to sell over 50%. Even then the are schemes for non-voting shares. But when close to 1% of population works for Amazon, maybe forced sharing of ownership isn't a bad idea.
Isn't that exactly what we are trying to achieve by re-distributing the wealth, and avoiding that few people have such huge ownership that they have more power than governments ?
We are still living in a middle-age system, where the lords don't own lands but stocks and companies, but they still dictate the laws.
Besides any argument about fairness, wealth inequality is highly destabilizing and historically has only been corrected by revolutions, wars, crises etc.
If a few billionaires need to sell stocks to avoid such an outcome, that seems quite desirable to me.
A nice idea I heard is to introduce a minimum tax rate based on wealth. Let’s say the magic number is 0.5%. Then you say, every individual (over some threshold etc) needs to pay max(normal tax calculation, 0.5% of wealth) .
What I like about it is that it doesn’t penalize people who already pay taxes. It’s a lower bound, not an extra.
What makes me weary about any such tax is that in practice, it seems to target the broad middle class - people who have enough assets to be interesting to the tax man, but who don’t have enough to hide it or avoid taxes.
> What makes me weary about any such tax is that in practice, it seems to target the broad middle class
If you're talking about the "Zucman tax" it explicitely targets the ultra-high-net-worth individuals because that's the population that manages to avoid income tax and thus pay a lower effective tax rate than the rest of the population.
Yes that’s what I was referring to (I couldn’t remember his name).
Still my concern would be that the other Zuck would show he has no income and no assets, while a doctor or coder would end up paying extra tax on their retirement savings.
Why is 2 a direction to be avoided? Is it really so bad to prevent an individual from having majority voting rights over a corporation which has power on par with most nation states. Is it so bad to think that one individual shouldn’t have majority ownership over a company dominant for the US space program? Or control over major international internet access that’s useful during conflicts? Or major social media platforms which provide algorithmic dials to tweak what information is visible?
I think there’s really only a few solutions to it which all involve some kind of divestiture, it just depends on if you want to target corporations or individuals:
1) a new wave of anti-trust ala Lina Khan and breaking up most major tech companies.
2) passing laws limiting the behavior of, and allowing for the punishment of corporations and group agents as a whole. There’s a lot of philosophical work about how to hold a group accountable for their actions, try searching List and Pettit Group Agency for a starter.
3. Caps on decision making power (potentially measured via some weighted stock ownership, or wealth more generally) like suggested above. I agree there would be a lot of second order effects here which are beyond the scope of this comment but I think we’ve clearly gone too far in one direction where single individuals are now essentially funding national party midterms, have increasing power over real world conflicts, and any other of the myriad of corruption issues you can find out in the wild.
I don't think forcing majority stakeholders to sell their stocks over the years would have your proposed effect. The position of power here is mostly with the CEO of those companies. And that's not gonna change with this scheme.
Honestly, there isn't a clean solution to this problem- or at least none that doesn't come with unpredictable consequences. I think everyone can agree that companies growing too large inevitably become harmful for the society they're enabled by, but there are no previously established solution we can reach for... And every decision you can make will have trade-offs. Also, were pretty late game into free market capitalism. Any changes to the status quo will dis-/advantage someone, and they will utilize the tools available to them to stop you. So such deep cutting changes are beyond unlikely without first descending into complete chaos. Which would likely be worse for the majority of people...
Every year I have to come up with the money to pay property taxes on my home based on an unrealized gains valuation. It's one of my largest expenses. I don't even really have the option of just selling some of my home to pay them. Even with this tax people still own homes.
They can pay with shares into a state fund and the state could even return the voting power. It can be done if we want it. That was in a proposal in French legislation for example, so it's not 100% crazy and to me it seems completely natural.
How is that not the obvious comeback to the argument "wealth is stocks so we can't tax it"? Is there an obvious downside?
Do you know that if I own a house and can't pay property taxes, it gets repossessed and sold? this is common. Let's apply it to stocks and billionaires too.
The way Sweden taxes stocks is to give people a choice between two options. They can either tax the total change in ownership value between each year (profit vs loss), or to pay a fixed (lower) tax on the total value regardless of profit or loss.
The first option guaranties that you don't pay more in taxes than you earn on the stocks, and the later has higher risk vs reward. For some reasons, the later seems to be the most popular choice, despite the risk that the owner need to cover the cost of taxes regardless of what happens in the stock market.
this guy makes a good point that if we don't all the weather/assets will naturally concentrate at the top. option 2 is the only real way to go, we do it when these rich guys get divorced, we can do it for tax
https://youtube.com/shorts/o2J7SmssHY0?si=FQxafqRL6dqCUdk3
The total income from tax increases is relative to the gross income. The gross income of the 1th percentile of earners in the US is ~$3.3 trillion, whereas the gross income of the top 25% is ~$10.3 Trillion. Levying a tax against only the top 25% sans the top 1% would yield more taxes than the inverse. Small increases on large brackets tend to generate significantly more tax revenue than large increases to small brackets.
Why is it a botpost to point out that levying taxes against the top top percentile doesn't generate significant tax revenue? It's a common talking point that is both wrong and disingenuous. Its fine to want to tax them, but claiming it's to generate money to pay for things doesn't make sense.
Why couldn't there a wealth ceiling? Let's take $1B per person, everything above that is taxed at 100%. Would it destroy the capitalist dream and people would lose motivation to grow their wealth, or would it stimulate cooperation and wealth distribution?
It is worth noting that, per the Piketty, Saez, and Zucman data, the tax rates of the top 0.1 and 0.01 percent of taxpayers have dropped substantially since the 1950s. The average tax rate on the 0.1 percent highest-income Americans was 50.6 percent in the 1950s, compared to 39.8 percent today. The average tax rate on the top 0.01 percent was 55.3 percent in the 1950s, compared to 40.8 percent today.
Note that those percentages include Federal, state, and local taxes.
I did not say "effective tax" you are moving the goal post.
It is no surprise to me that an organization originally founded by the chairman of General Motors, the president of Standard Oil and their like [0] is able to conclude:
>"The top 1 percent of Americans today do not face an unusually low tax burden, by historical standards."
Which is a wild claim to make.
Nice that you find the somewhat honest footnote, but you're citing what is essentially an opinion piece from a conservative think tank.
So when society says a business owner's assets are worth more than $1B they start losing control of the business they built and other people get to tell them how to run their business? That destroys a lot IMO
Norway has a wealth tax (1.1% nominal, but there are tricks), but we also have almost as bad wealth inequality as the US (by Gini). Wealthy people are furious to the point of fleeing the country because it really is the one tax they can’t (entirely) escape. But it certainly doesn’t “fix” wealth inequality.
The most interesting part of it is how much PR / media storm they (the wealthy) manage to create around this topic. Last election it more or less dominated the media, which I also think backfired on them.
Define "rich" and "tiny". I don't find this visualization particularly useful (especially with the average numbers, which are heavily skewed by the tails).
A better way to look at this data is the sum of wealth for each percentile (https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...) The top 10% (90-99%, ~$67T, >= ~$2M in net worth) owns more than the top 1% (99%+, ~$60T, >= ~$15M in net worth). The top 0.1% own ~$27T.
Any yearly tax that exceeds the "4% rule" will essentially be confiscatory, so let's say that a tax of 1% won't bring out the pitchforks (is that tiny?) On the top 0.1%, that generates about $0.27 T compared to 2026 Federal collection of about $5.2T (on a deficit of about ~$2T) https://www.us-debt-clock.com/data/deficit-by-year
As I pointed out in a comment about solar power in another thread, if that money was spent on installing solar+battery, in about 5-10 years we could have more or less converted the US grid with a 1% wealth tax on the 0.1%. Of course, we could also reverse the recent (2016 and beyond) tax cuts as well, which would help fix the giant gaping hole in the US budget. The stock market would probably take a hit, reducing the wealth of the top whatever by far more than a small tax would.
Many will say that the purpose of this tax isn't just to raise revenue for the US government, but to reduce power of the most wealthy. I personally think that taxing wealth is not going to be effective for doing this, without passing laws that limit the effect of wealth in US politics.
I think government managing wealth that is giving good returns is lose lose. The overall wealth of society decreases.
If someone is just rich on paper no point in taxing it.
Tax when they spend.
Another thing is to force the wealthy to diversify into low return assets. They perhaps will figure out how to make it high returns and grow the overall wealth of the society.
Part of the problem I have with graphs like this is that they don't differentiate between paper wealth, being able to get a loan against the paper wealth, and hard assets (real estate, vehicles, cash).
Let's take a personal anecdote for an example: I joined a startup when it was early-stage, stayed for a few years, and exercised my stock options when I left. The startup is now "successful", but still private; my shares have also surely been heavily diluted. I have no idea when I'll be able to sell those shares or how much they're really worth. I have no way of turning those shares into quality-of-life improvements for any foreseeable future. Do they make me "wealthy"?
I don't think most Americans have a problem with rich people buying nice houses and nice cars, and using their wealth to pay for private staff. I think the real problem is how much of the wealth is allowed to stay off public markets. Cargill is worth more than $50 billion and its stock is not available on public markets. The growth in wealth of most AI companies - Anthropic, OpenAI - happened off of public markets, and so none of it trickled into the American middle class by their retirement accounts. Venture capital is keeping companies private for longer because, quite simply, none of the investors need the cash to pay for their cost of living, so they're quite happy to let paper gains continue to live on paper.
If your company has revenues of $X million a year or more, you should be forced to make public financial reports (effectively forcing you to list stock on a public market). Period. I think economists will naturally disagree on how much X should be, and that's fine, but I have little doubt that there should be a line like that, somewhere. Concerns about public markets forcing short-term thinking are a different problem, one addressed by mission-lock implements (Eric Ries's recent book Incorruptible is great here). Public markets ensure that gains in wealth are shared more broadly across the economy and increase tax collection by incentivizing more frequent buying and selling of the underlying stock, since those are taxable events.
Paper wealth is a real problem (and the financialization of everything has made more paper wealth appear than imaginable) and your "illiquid" stock can cause all sorts of fun when various thing try to force you to mark-to-market something that basically doesn't have a market (I'm sure you'd sell your shares for $1 billion, and be insulted if I offered you $5 total, so they must have some value but good luck finding what that is AND realizing it).
You also have this with houses in California (and more and more, the entire country) - a family in a house that they pay $x per month on is not likely to really feel different if you tell them the house is worth $250k or $500k or $5m - because the price will likely be "in line" with those around them and so actually getting access to the "wealth" is difficult - the only real way is to move far away.
I feel a big part of the problem is we've made the world great for those who know how to navigate it, but horrible for those who don't (or can't). If you are disciplined from the beginning, always save 10% of what you make into retirement 410(k)s, 10% into rainy-day funds, spend less than 30% on housing, you're going to do quite well - but that's a small portion. Seventy years ago you could be a near literal moron, work at the factory, and live a good life - because the company handled your pension and healthcare without asking you to make decisions that frankly most people aren't capable of making - and it was difficult to leverage yourself to death.
Most people don't give a shit about wealth inequality if they can live a good if humble life without undue stress.
Elon Musk existing doesn't bother me as long as I can provide for my family and feel I'm getting a "decent deal". But if I'm overworked, underpaid, drowning in debt, and prices are rising, his existence is going to be a lot more annoying.
(One of the problems of publicly-traded companies is manager's capitalism - https://ia601506.us.archive.org/26/items/bogle-managerial-ca... - both really come down to nobody actually owning something in the meaning of taking responsibility to the thing, because ownership is so diluted it basically has no meaning.)
Cash is fungible. Living somewhere isn't. Debt is not liquidity, it's encumbrance. It carries strings and fees, in this case foreclosure risk. You're ignoring the entire human reality of housing.
I don't think most Americans are thinking about their 401Ks when it comes to corporate behavior. They're thinking about high prices, lower quality, poor service, externalities(pollution and such), low wages, poor working conditions. I don't think public markets will fix those things, and some argue they'd make them worse.
> I don't think most Americans have a problem with rich people buying nice houses and nice cars, and using their wealth to pay for private staff.
Think again. The demand from rich to park wealth in X, Y, Z makes prices go up. Just imagine that the RAM prices fueled by AI spending is a housing market. More money rich have, less affordable the life for the rest is.
And don't forget that speed of their wealth growth is way faster than anyone who sells their labour.
Ah. And we did not even talk about "hidden" wealth thingy... All these numbers are official ones.
Housing prices aren't going up because of billionaires, they're going up because of the collective action of millions of ordinary Americans, many of whom are not rich, who own houses and resist the construction of new houses near them to meet demand. Taxing the ultra-wealthy more does basically nothing to make my own housing costs less; making it legal for a housing developer to completely ignore the protests of old retired people on a fixed income and build a new condo development next to the house the old retired person bought 30 years ago would.
This is shorthand for “the total wealth of the richest 0.1% of the population is greater than the total for the remaining 99.9%”, rather than the trivial “the individual wealth of each member of the richest 0.1% of the population is greater than that of each member of the remaining 99.9%”.
Would you rather have richer (in real terms) society (including richer lowest decile) with larger wealth inequality or poorer society with smaller inequalities? You might argue that these are not really the only two options and that's fair, but let's assume they are. Surprisingly many people would still opt for second option. Musk was trillionaire, now he no longer is (so inequality decreased) but did it really change anything that we no longer have any trillionaire?
That’s not the prompt. He’s not talking about average wealth skewed by mega rich, but middle and lower deciles also being richer is what a richer society means.
"Value creator"
..
You truly don't get it either. People like this are just aggregators. That's it. Magnet. They attract stupidity and power and money, and once they have it, the gravity takes over. That's all it ever was.
They're not "value creators". They're human beings that were given immense opportunities, disproportionately available avenues of luck, and happened to be able to find people to do their labor for them on the backs of the needs of the world.
What the ever living hell do you think the "90% of people" are doing? They're feeding each other and selling houses to each other and stocking shelves for each other because they have to because their labor and money is being stolen from them by this stupid abstraction that they are are "value creators".
Since most people’s income comes from salary, it is very easy to read this graph wrong and it is a bit misleading. Say you are some dev who makes $500k per year, but likes to rent, doesn’t drive and is not very bothered with stocks. Their Net Worth - unless I understand this wrong, if I do please correct me - the would around zero, maybe less with student loans, so they would be amongst the poor. Ok, they probably would have a lot of savings in this scenario, but maybe they like to ride on a horse with no name and spend most of their income. Still I would not call them poor.
Does it change the picture? Not really, because Musk et al. are so way beyond everyone else that the graph is extremely top heavy. It is a nice data visualisation regardless.
When you get to $100 million you get a letter from the president congratulating you for winning capitalism and everything after that gets taxed at 100%.
Who is it to say what's the ideal wealth ratio between quintiles? I know who, a local communist!
Wealth inequality is a completely pointless metric that tells us nothing about individual quality of life, and is being pushed by the left wing ideologies to serve their agendas.
For example, you could propel yourself into the top quintile by just packing up and moving to Liberia, but that would not increase your quality of life now, would it?
218 comments
[ 4.0 ms ] story [ 40.7 ms ] threadWealth being the integration of gains - consumption over time makes it a poor metric for looking at society as a whole.
Something like 50% of Americans will be millionaires at some point in their lives—upper quintile per this chart, typically later in their earnings years. Almost all of them started “poor” as young adults, per this chart’s definition.
Look at that last bar; consider just the annual yield or interest payment on that wealth; soon, it's going to be more than all other bars combined. If people understood the situation, they would all stop working and start making lists of who these people are and work for them. That's the only logical (legal) thing to do. Every other job or career is a waste of time.
Clearly, the money printers. How else could there be such an enormous gap between those last two bars?
That being said, one accident or illness that strips away that doctor's ability to earn, leaving them in a soul crushing amount of debt that can't be discharged via bankruptcy. Their debt obligations are real.
Though this is also a slightly misleading metric. Plenty of “poor” people are only temporarily poor. When I graduated grad school before starting at Google all those years ago, I had a negative net worth.
edit: sorry, bringing a SV perspective, realize my comment doesn’t apply to everyone
Nothing against you OP but this the perfect highlight how out of touch HN can be from the reality.
In yen perhaps.
You would be surprised. Not only because, as you point out, recent graduates often have a negative net worth, but also because people tend to increase their spending in lockstep with their income.
Saving millions takes the intersection of multiple factors: sufficient disposable income, prioritizing investing over lifestyle, long-term discipline to stick to the plan, and luck to keep it all going smoothly.
Even in a SV world I'm trying to get my head around the logical leap that gets you to this number. Median comp in SV is <500k - that's 20 years in the business to earn $10m ignoring taxes & your actual living expenditure. Obviously we can jump that with equity, but that's still not moving the dial far enough for the "majority" to be up at those heights.
I don't see how we're getting anywhere near these figures without generational wealth (assume this is the answer).
Obviously even in SV "most people" have not already finished doing this.
Around 17% of CA residents live below the poverty line, which means MILLIONS of adults that are not students. Elderly are a significant chunk of that number.
https://www.ppic.org/publication/poverty-in-california/
https://calbudgetcenter.org/resources/young-californians-fac...
Some European making 3k/month net probably wept reading this.
I'm not sure your mental model holds. A lot of Europe has higher standards of living than the USA. And a lot of Asian countries have made huge strides in the last few decades. Also consider the difference between Mississippi and Massachusetts. I wouldn't say that anyone gainfully employed in Mississippi is "rich beyond the world's wildest dreams".
Which even "poorest in Mississippi" is above - but that factoid is entirely useless to basically everyone, and frankly insulting to our poor family in Mississippi.
If he manages to not spend anything, like on housing, or food.
I think it's an interesting thought, I'm not sure I have a hot take here or anything. The likes of Jeff Bezos and Elon Musk are clearly good at amassing wealth (and interested in amassing wealth) but I suspect a lot less is attributable to skill than many would think.
- Most of that wealth is tied up in assets offering services for americans (servers / warehouses). It would be much worse if the rich decided to spend all of that on consumption rather than keep reinvesting it in assets. - Even the LHS of that chart Americans are some of the wealthiest in the world. A lot of the middle class from many other countries would love to be on the LHS of that chart. - No one is expected to build wealth on a 40 hour minimum wage job. It is the bare minimum and most people get paid more. - Americans don't want wealth. Our spending habits are abysmal. I suspect if you gave every American $500K the chart would revert back to this in like 12 months
Services that have an incentive to serve said americans, because it is them who own them.
You are completely right that this capital is super useful for society. It would just be infinitely more useful if it was in the hands of society.
Putting it in the "hands of society" is crazy talk. Government / elected officials are awful at allocating capital, negotiating labor, holding people accountable.
So who is right? is it the real person with a real identity attached to it, or is it the 7 month old account pointing nowhere?
I guess we'll never know.
Why would that be worse? What online services are so important that it's better to have them than to lift some people above the poverty line? Rich people spending is the next best thing after taxing them - it distributes their money and provides jobs. It would strictly improve the society if Bezos spent lots of money and folded his servers and warehouses - in so many different ways...
What jobs do you think it creates? You really want all our labor pandering to billionaires? Why would anyone give attention to middle class if the billionaires were forced to spend all their money? How expensive would your life get if the billionaire class redirected all of their wealth toward frivolous consumption.
Yeah. Like renting a house for a mother of 2 children who will never get her own by selling her labour, while the renter uses her money to buy more units.
What's the issue?
A large portion of billionaire wealth isn't reinvested in productive assets. It comes from holding onto assets like corporate shares and land that grows in value based on the asset's ability to extract profit or rent. Or from distorted (speculative) demand for that asset that is completely detached from its productive output.
Someone like Bernard Arnault is worth around $160B (wealth from luxury brands like Louis Vuitton, Dior, and Tiffany). That paper valuation exceeds the total national wealth of many entire countries: https://en.wikipedia.org/wiki/List_of_countries_by_total_pri...
Yes he is valuable because he makes a product people want. That is how life works. If you want him to be poor, convince people to buy something other than luxury brands.
The coordination win that came from “thou shalt not covet” is substantial and we forget it at our own peril.
Retirement age keeps increasing, public healthcare keep getting defunded. My tax money is getting used to enrich war mongers and my cost of life keeps increasing as a result of all of that.
Also my constitutional rights are ignored daily.
You understand why I might not be feeling very happy that YOU are doing great?
But you’re probably one health scare away from it, you just don’t realize it.
1. Outsized political influence (in theory can be mitigated by laws controlling corporate spending, but obviously those laws themselves are subject to manipulation by the rich and powerful)
2. Distortion in who the economy serves. The beauty of capitalism is that it's a problem-detection and problem-solving system. If a narrow set of people have a huge portion of money, the economy becomes unduly optimized toward satisfying their wants and needs.
3. Despite best efforts, we ultimately must share a lot of the same commons. Even being a billionaire in NYC or San Francisco can't really give you a walk to work or your child's school that feels as safe as it does in a more equal society that takes better care of its unwell and poor.
Thank you for sharing your insight.
What is interesting is that this was true centuries ago too. Life as a noble in the middle ages was stressful as hell and you couldn't even decide on your own lovelife. Read Seneca and the first thing he writes is that Augustus (whom he knew personally) was constantly complaining about his busy life and dreaming of a retirement that never arrived.
Rank order of preference to be top 10% in for me: US > Vietnam > South Africa
So your method does not disabuse me of my belief. It’s quite clear that equality has not made Vietnam more desirable than the US. In fact, there are some 400k foreign born in Vietnam (<1%) vs the US having 15% foreign born (a stark enough difference made worse by forcing foreign-born to be from non-neighbors). So I must reasonably conclude that my rank order is likely shared by others and that others too are not, in fact, lured by equality.
There is an old immortal tweet: cars have windows and go; houses have windows and don’t go; so it’s not the windows that make things go.
If inequality were as critical we’d expect a perfect rank ordering of distant migrant population attempts matching it. The numbers are so vastly different that one cannot conclude equality is of great importance to most.
You or the farmer you buy food from competes for farmland with Bil Gates. You or the one providing your house builder with wood competes for lumber forest with Alex Karp.
The list goes on and on.
It appears trough technological innovation the standards of life rise in many ways but trough innequality it can affect the standards/ affordability of our basic needs.
But everyone else can’t afford basic necessities or furniture anymore. And so being a farmer or a woodworker or whatever becomes a less attractive job, less people will do it, and you will have a harder time finding someone fixing your plumbing. Or pay a premium.
Instead, the ultra-wealthy are demanding extreme luxury, and so a would-be farmer is now a hotel page boy carrying around some rich dudes’ luggage, hoping for a tip.
I find a lot of consistency of his audience in hating him for the very reason that he implements his audience's wishes. To this audience, there is no redeeming oneself.
Yes and he was gonna give a vast share of his wealth away for the good of the many over 5 years and then tripled it. woops. Let us not pretend farmland has not been a good investment in those parts. Let us be honest. Almost every such good thing he does is a tax credit which polishes his image and legacy. He was a pretty cutroath businessman and there's no reason for me to now paint him with some saintly image.
>Beef meat causes global warming in a disproportionate way compared to chicken or even disproportionate per euros or per gram of protein compared to lentils.
I can get behind the idea that beef has a bigger carbon footprint due to the fossil fuel fertilisers used to grow their feed as compared to the conversion ratio freaks that modern meat chicken breeds are. The fact that the methane from their farts is somehow the long term issue I however reject. And I'd like to point out that without much of both that excrement and fossil fuel based fertiliser we have a famine on our hands so 'overcrowd the Earth with more equal people' doesn't seem like such a fine goal.
>I find a lot of consistency of his audience in hating him for the very reason that he implements his audience's wishes. To this audience, there is no redeeming oneself
Explain to me why do you presume I am "his audience".
Bill Gates has had a major role in more than 120 million extremely poor children not dying of horrible diseases in some of the most destitute places on earth.
But he bundled a browser with his OS thirty years ago, so fuck all that, right?
BTW just since you use it for the rethoric. Can I also point out how that major role in 120 million children (by their own estimation and 40mil since 2000 on some other own estimation) includes the work of everyone else donating to, remotely involved with or working in line with his organisation. You know including my tax money going to the the vaccination drives of Gavi, the WHO, UNICEF, etc It seems to miss the bit where bill himself attributed the vast majority of global health and development funding to donor nations.
You think we could get a tax credit for our major role in that?
I'm not going to point at bill gates buying and leasing out loads farmland and attribute to it new corn strains and higher feed conversion chicken breeds.
You may as well be calling for soviet style state controll the way consolidation, top down ownership is and competition mechanics are dismissed or praised depending on the standpoint.
The point should be to raise the floor, not put in place a ceiling.
If anything, “raising the floor” is the Trojan horse.
This isn't to say I don't think some companies/individuals/shareholders have absolutely taken the piss compared to wage earners.
Because most people are (IMO wrongfully) jealous of the rich. They have a problem with the rich even if it's legitimately earned wealth.
I have no desire to be rich, certainly not as rich as the far right 1% column. I find that level of wealth nauseating and embarrassing. But regardless, "legitimately earned wealth" is doing a lot of work in that last sentence. Perhaps (doubtful) it's possible to earn that much while being legally legitimate, although that speaks more to how fucked up our system is than anything else, but certainly not possible to do so in a morally legitimate way.
Would you be ok to live in a democracy where your vote goes into the garbage bin instead of the voting box? Because that's where it goes if you aren't rich.
More money doesn't create more things to buy or more people making things, its just means more money competing for the same things to buy. Other people having more does diminish your share, of the cake. Yes, we can make the cake larger, but the best way to do that is for more people to get more opportunity to fulfil their potential, by getting a reasonable share to do so.
One might work hard and fail or one might work lightly and succeed. Bulletball guy certainly worked a lot harder than many product managers I know.
Now the question of assets of limited supply. That’s sound. But that’s a distribution of assets of limited supply problem. It is entirely possible to have great wealth inequality with low land ownership concentration - in the US 67% of people live in owner-occupied housing. Scotland has much higher land ownership concentration - but lower wealth inequality.
So fixed supply asset concentration can exist without wealth inequality - which, to be clear, is the form of inequality I was talking about considering the original post is about it.
Who do you want to educate from that position? You or others?
> “What we think” and “Ideal”
> In 2011, Michael Norton and Dan Ariely asked more than 5,000 Americans how they thought wealth was split between the five fifths of households, and how they would ideally split it. The Companion spreads those five shares across all 100 percentiles of the 2026 wealth total in a smooth curve (Appendix 3). Many different curves fit five numbers, so these two shapes are only illustrations. The actual bars come from percentile-level data. These two curves do not.
If one asks "how much, say, Elon Musk, is worth" we see some crazy numbers with kirjillions of zeros. But those are not "his" money, this is how much his companies are estimated to have. Yes, he has large personal fortune, but it is nowhere near those huge billions of billions amounts.
Second, staying with Elon example, his companies are paying people and other companies that pay people, so there is huge army of people who have food in the fridge because of Elon Musk (I've seen some estimates around ~1 million people overall). Again, they are nowhere near to be as wealthy as Elon, but still, they have a decent live thanks to his companies.
Not even ‘to have’, just ‘to be worth, if all of their shares could be sold at the price of the recent ones’. It’s a number only loosely (albeit obviously positively) correlated with actual spending power.
The whole point is that he shouldn't be able to exert autocratic control over large swathes of the economy and control that many people's lives.
It’s more hidden now. We all have rights and freedoms and whatnot. But there are still people who “own stuff”, and people who don’t. With shades of gray in between those two extremes. It’s good to be cognizant of the system you inhabit relative to what has existed throughout history so you can make good decisions and position yourself accordingly.
> his companies are paying people and other companies that pay people
Yes, his companies, not him. He's not doing much, except distracting part of his workforce to work on vanity projects such as flying cars or mile-long vaccuum tubes, or spending some of his vast wealth to buy politicians that will further the cause of wealth inequality. Get rid of him, and the system works much better for everyone. Him and others like him.
That or just raise interest rates to force these people to sell more equity
Top salary earners, who do manage to save somewhat for retirement end up getting punished by these wealth taxes as well, especially since, generally, you need money in order to be able to move money around, in order to be able to save money on these sorts of taxes.
Capital gains: this should just be income.
Unrealized gains: The argument against wealth taxes are often related to unrealized gains needing to sell blah blah. If you get a loan on your stock value, at that moment the gains should be considered realized and you should be taxed via capital gains (which would be at the level of income tax). Ultra-wealthy use loans against their portfolio to avoid realizing their gains. Make that not possible.
It'd be interesting to do the same graph by real consumption. I bet it'd be much more equal - most of the wealth is tied up in systems that keep the country ticking over and are only providing paper benefits to the owner. Which is why I say "transparency" - once you track what happens in real terms, "taxing the rich" almost certainly becomes "everyone ends up with less". If you take real resources away from the person who owns the McDonald's ice cream machine in real terms I have a hard time seeing how it won't come out of the lifestyle of the dude buying icecream. The person getting the money wasn't consuming anything real.
Tell me you've never met a modern Republican without telling me you've met a Republican.
And it's not like taxes destroy wealth. Distributing from the person who owns the ice cream machine to the person buying ice cream puts the money in the hands of the person far more likely to spend it quickly. On ice cream, making the business case for owning ice cream machines better, not worse.
I mean, sure. The follow up thought is after that power has been taxed away then someone else is going to need to be taxed for the raw resources that are needed. If welfare checks start being paid out with intangible benefits it'll lead to loud complaints. That gets to the heart of the problem with taxing the people with truly enormous amounts of wealth, they mostly have power, which isn't much use to someone who needs food and shelter. The tax burden has fall somewhere in the logistics chain that produces the houses and the food (although maybe a long way upstream).
> Distributing from the person who owns the ice cream machine to the person buying ice cream puts the money in the hands of the person far more likely to spend it quickly
I'm not going to disagree with that, but I will point out that this is why they couldn't afford the ice cream machine in the first place. Consuming the seed corn is a road to eventually having no corn.
There is an economic optimum amount of ice cream production and there isn't any reason to believe it isn't being hit under the current system. It isn't obvious if the need is for more or less ice cream machines. Moving ownership of the machine around doesn't obviously change the amount of ice cream produced; and its owner isn't consuming the machine. But a wealth tax on the ultra-wealthy is pulling all those levers on the assumption that making random changes in ownership has to help. It probably won't.
The modern capitalistic system has devised many fabulous ways of enabling people to buy ice cream machines and seed corn without being able to afford it individually. Equity and loans are the two most obvious, there are many more.
That is the main reason that American capitalism has thrived. Because you don't have to be rich to buy ice cream machines.
That's what it means to be poor. You have to eat first. You don't have the choice to not eat so you can save the cost for something else.
What you're describing is called "Trickle Down Economics", and has led to 50 years of economic failure.
Rough estimates for federal taxes
Top 0.1% Share of federal taxes ~10–12% Approx ~$550–650B
Bottom 50% Share of federal taxes ~10–13% Approx ~$520–680B
source : quick claude query
The top 1% pay about 38%. The top 0.1% is simply not a lot of people and not helpful for thinking about how much you can juice them in absolute dollar amounts.
So let's say you start taxing the ultra-wealthy based on their assets. They then have the option of:
1) Make the company pay out dividends, so that owners can afford to pay their wealth tax. Not ideal, because what happens during bad years where there's no dividends to be paid out? Or if companies want to re-invest in the company?
2) Sell stocks. Again, not ideal. This would mean that you lose some ownership year by year.
3) Take up personal loans to cover taxes.
etc.
Note, I'm NOT saying that we shouldn't do anything. But this is just the consequence of such assets (stocks) being the dominant asset among the wealthy.
Having hordes of people in poverty while we bend over backwards to not inconvenience the rich with "selling stocks" to pay taxes".
I'll get hate from some corners on this, but I'm coming to see the wisdom in not significantly increasing the tax rate on the rich, but instead broadening the tax base. For example, count tricks like borrow, spend, die as cash; make stock buybacks illegal; treat compensation in the form of assets as cash income at the valuation price when the transfer happens; count inheritances above $X million as income, cash income.
Wealth concentration is a problem because wealth concentration is power concentration.
Why should a few dudes have autocratic control of entire industries?
If you force them to sell off their stakes over time through a wealth tax, you make the economy more democratic.
"Taxing the rich" is literally solving the thing that is a problem today.
What's the problem? It's not like you'll have to sell over 50%. Even then the are schemes for non-voting shares. But when close to 1% of population works for Amazon, maybe forced sharing of ownership isn't a bad idea.
Isn't that exactly what we are trying to achieve by re-distributing the wealth, and avoiding that few people have such huge ownership that they have more power than governments ?
We are still living in a middle-age system, where the lords don't own lands but stocks and companies, but they still dictate the laws.
Besides any argument about fairness, wealth inequality is highly destabilizing and historically has only been corrected by revolutions, wars, crises etc.
If a few billionaires need to sell stocks to avoid such an outcome, that seems quite desirable to me.
What I like about it is that it doesn’t penalize people who already pay taxes. It’s a lower bound, not an extra.
What makes me weary about any such tax is that in practice, it seems to target the broad middle class - people who have enough assets to be interesting to the tax man, but who don’t have enough to hide it or avoid taxes.
If you're talking about the "Zucman tax" it explicitely targets the ultra-high-net-worth individuals because that's the population that manages to avoid income tax and thus pay a lower effective tax rate than the rest of the population.
source: https://gabriel-zucman.eu/files/report-g20.pdf
Still my concern would be that the other Zuck would show he has no income and no assets, while a doctor or coder would end up paying extra tax on their retirement savings.
I think there’s really only a few solutions to it which all involve some kind of divestiture, it just depends on if you want to target corporations or individuals:
1) a new wave of anti-trust ala Lina Khan and breaking up most major tech companies.
2) passing laws limiting the behavior of, and allowing for the punishment of corporations and group agents as a whole. There’s a lot of philosophical work about how to hold a group accountable for their actions, try searching List and Pettit Group Agency for a starter.
3. Caps on decision making power (potentially measured via some weighted stock ownership, or wealth more generally) like suggested above. I agree there would be a lot of second order effects here which are beyond the scope of this comment but I think we’ve clearly gone too far in one direction where single individuals are now essentially funding national party midterms, have increasing power over real world conflicts, and any other of the myriad of corruption issues you can find out in the wild.
Honestly, there isn't a clean solution to this problem- or at least none that doesn't come with unpredictable consequences. I think everyone can agree that companies growing too large inevitably become harmful for the society they're enabled by, but there are no previously established solution we can reach for... And every decision you can make will have trade-offs. Also, were pretty late game into free market capitalism. Any changes to the status quo will dis-/advantage someone, and they will utilize the tools available to them to stop you. So such deep cutting changes are beyond unlikely without first descending into complete chaos. Which would likely be worse for the majority of people...
How is that not the obvious comeback to the argument "wealth is stocks so we can't tax it"? Is there an obvious downside?
The first option guaranties that you don't pay more in taxes than you earn on the stocks, and the later has higher risk vs reward. For some reasons, the later seems to be the most popular choice, despite the risk that the owner need to cover the cost of taxes regardless of what happens in the stock market.
Why couldn't there a wealth ceiling? Let's take $1B per person, everything above that is taxed at 100%. Would it destroy the capitalist dream and people would lose motivation to grow their wealth, or would it stimulate cooperation and wealth distribution?
In the US, the top federal rate was around 90% through the 1940s and early 1960s, then 70% through the 1970s.
https://taxpolicycenter.org/briefing-book/how-do-federal-inc...
https://taxfoundation.org/data/all/federal/taxes-on-the-rich...
I found this footnote particularly interesting:
It is worth noting that, per the Piketty, Saez, and Zucman data, the tax rates of the top 0.1 and 0.01 percent of taxpayers have dropped substantially since the 1950s. The average tax rate on the 0.1 percent highest-income Americans was 50.6 percent in the 1950s, compared to 39.8 percent today. The average tax rate on the top 0.01 percent was 55.3 percent in the 1950s, compared to 40.8 percent today.
Note that those percentages include Federal, state, and local taxes.
It is no surprise to me that an organization originally founded by the chairman of General Motors, the president of Standard Oil and their like [0] is able to conclude:
>"The top 1 percent of Americans today do not face an unusually low tax burden, by historical standards."
Which is a wild claim to make.
Nice that you find the somewhat honest footnote, but you're citing what is essentially an opinion piece from a conservative think tank.
[0] https://en.wikipedia.org/wiki/Tax_Foundation
https://www.forbes.com/sites/teresaghilarducci/2025/12/29/do...
A better way to look at this data is the sum of wealth for each percentile (https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...) The top 10% (90-99%, ~$67T, >= ~$2M in net worth) owns more than the top 1% (99%+, ~$60T, >= ~$15M in net worth). The top 0.1% own ~$27T.
Any yearly tax that exceeds the "4% rule" will essentially be confiscatory, so let's say that a tax of 1% won't bring out the pitchforks (is that tiny?) On the top 0.1%, that generates about $0.27 T compared to 2026 Federal collection of about $5.2T (on a deficit of about ~$2T) https://www.us-debt-clock.com/data/deficit-by-year
As I pointed out in a comment about solar power in another thread, if that money was spent on installing solar+battery, in about 5-10 years we could have more or less converted the US grid with a 1% wealth tax on the 0.1%. Of course, we could also reverse the recent (2016 and beyond) tax cuts as well, which would help fix the giant gaping hole in the US budget. The stock market would probably take a hit, reducing the wealth of the top whatever by far more than a small tax would.
Many will say that the purpose of this tax isn't just to raise revenue for the US government, but to reduce power of the most wealthy. I personally think that taxing wealth is not going to be effective for doing this, without passing laws that limit the effect of wealth in US politics.
If someone is just rich on paper no point in taxing it.
Tax when they spend.
Another thing is to force the wealthy to diversify into low return assets. They perhaps will figure out how to make it high returns and grow the overall wealth of the society.
Let's take a personal anecdote for an example: I joined a startup when it was early-stage, stayed for a few years, and exercised my stock options when I left. The startup is now "successful", but still private; my shares have also surely been heavily diluted. I have no idea when I'll be able to sell those shares or how much they're really worth. I have no way of turning those shares into quality-of-life improvements for any foreseeable future. Do they make me "wealthy"?
I don't think most Americans have a problem with rich people buying nice houses and nice cars, and using their wealth to pay for private staff. I think the real problem is how much of the wealth is allowed to stay off public markets. Cargill is worth more than $50 billion and its stock is not available on public markets. The growth in wealth of most AI companies - Anthropic, OpenAI - happened off of public markets, and so none of it trickled into the American middle class by their retirement accounts. Venture capital is keeping companies private for longer because, quite simply, none of the investors need the cash to pay for their cost of living, so they're quite happy to let paper gains continue to live on paper.
If your company has revenues of $X million a year or more, you should be forced to make public financial reports (effectively forcing you to list stock on a public market). Period. I think economists will naturally disagree on how much X should be, and that's fine, but I have little doubt that there should be a line like that, somewhere. Concerns about public markets forcing short-term thinking are a different problem, one addressed by mission-lock implements (Eric Ries's recent book Incorruptible is great here). Public markets ensure that gains in wealth are shared more broadly across the economy and increase tax collection by incentivizing more frequent buying and selling of the underlying stock, since those are taxable events.
You also have this with houses in California (and more and more, the entire country) - a family in a house that they pay $x per month on is not likely to really feel different if you tell them the house is worth $250k or $500k or $5m - because the price will likely be "in line" with those around them and so actually getting access to the "wealth" is difficult - the only real way is to move far away.
I feel a big part of the problem is we've made the world great for those who know how to navigate it, but horrible for those who don't (or can't). If you are disciplined from the beginning, always save 10% of what you make into retirement 410(k)s, 10% into rainy-day funds, spend less than 30% on housing, you're going to do quite well - but that's a small portion. Seventy years ago you could be a near literal moron, work at the factory, and live a good life - because the company handled your pension and healthcare without asking you to make decisions that frankly most people aren't capable of making - and it was difficult to leverage yourself to death.
Most people don't give a shit about wealth inequality if they can live a good if humble life without undue stress.
Elon Musk existing doesn't bother me as long as I can provide for my family and feel I'm getting a "decent deal". But if I'm overworked, underpaid, drowning in debt, and prices are rising, his existence is going to be a lot more annoying.
(One of the problems of publicly-traded companies is manager's capitalism - https://ia601506.us.archive.org/26/items/bogle-managerial-ca... - both really come down to nobody actually owning something in the meaning of taking responsibility to the thing, because ownership is so diluted it basically has no meaning.)
reverse mortgages are not hard to get
Think again. The demand from rich to park wealth in X, Y, Z makes prices go up. Just imagine that the RAM prices fueled by AI spending is a housing market. More money rich have, less affordable the life for the rest is.
And don't forget that speed of their wealth growth is way faster than anyone who sells their labour.
Ah. And we did not even talk about "hidden" wealth thingy... All these numbers are official ones.
So the median household in the US has 3 working adults? Is $211k household according to that page.
Outstanding observation.
They're not "value creators". They're human beings that were given immense opportunities, disproportionately available avenues of luck, and happened to be able to find people to do their labor for them on the backs of the needs of the world.
What the ever living hell do you think the "90% of people" are doing? They're feeding each other and selling houses to each other and stocking shelves for each other because they have to because their labor and money is being stolen from them by this stupid abstraction that they are are "value creators".
Ugh.
Isn't it weird that the people that don't create value are also the people with all the money, though?
Since most people’s income comes from salary, it is very easy to read this graph wrong and it is a bit misleading. Say you are some dev who makes $500k per year, but likes to rent, doesn’t drive and is not very bothered with stocks. Their Net Worth - unless I understand this wrong, if I do please correct me - the would around zero, maybe less with student loans, so they would be amongst the poor. Ok, they probably would have a lot of savings in this scenario, but maybe they like to ride on a horse with no name and spend most of their income. Still I would not call them poor.
Does it change the picture? Not really, because Musk et al. are so way beyond everyone else that the graph is extremely top heavy. It is a nice data visualisation regardless.
Fix the money, fix the world. IYKYK
Wealth inequality is a completely pointless metric that tells us nothing about individual quality of life, and is being pushed by the left wing ideologies to serve their agendas.
For example, you could propel yourself into the top quintile by just packing up and moving to Liberia, but that would not increase your quality of life now, would it?
Every year there are fewer povvos in the world, and we're just getting started.