View Poll Results: Do you believe someone can be too rich?
Yes, someone can have too much money. 79 58.52%
No, they can't. 56 41.48%
Voters: 135. You may not vote on this poll

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  #1  
Old 01-10-2018, 10:04 AM
Quimby Quimby is offline
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Do you believe that someone could be "too rich"?

That is do you think society would be better if there were a theoretical cap on how much money someone could acquire for themselves. The exact limit doesn't matter but let's assume the enforcement is through policy not force. For example, income after XX dollars is taxed at 95%.
  #2  
Old 01-10-2018, 10:07 AM
Morgenstern Morgenstern is online now
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3 impossible things.

1. Being too rich.
2. Being too sexy.
3. Having a garage that's too big.
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Last edited by Morgenstern; 01-10-2018 at 10:07 AM.
  #3  
Old 01-10-2018, 10:14 AM
HurricaneDitka HurricaneDitka is online now
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No, I don't think society would be better.

ETA: and even taxation is backed up by force.

Last edited by HurricaneDitka; 01-10-2018 at 10:15 AM.
  #4  
Old 01-10-2018, 10:38 AM
gnoitall gnoitall is offline
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Mandatory quibble with hypothetical: without force, there is no policy.

If you can't enforce your policy, I could ignore it. As HurricaneDitka points out (regarding the suggested policy vehicle, taxation.)

What problem does answering your question solve? What are you going to do with the money you take away from the purported "too rich"? Taxing it and putting it into public coffers doesn't DO ANYTHING until it's spent on something. So are you solving any problem other than "that jerk has too much money"?
  #5  
Old 01-10-2018, 10:43 AM
Velocity Velocity is offline
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While I voted "yes," it's hard to answer. Some people, if in possession of $50 million, will simply sit on it forever, in which case they'd be the same even if they had just $5 million. Some other people, though, can have Bill Gates-style billions and spend most of it in philanthropy and worthwhile causes.
  #6  
Old 01-10-2018, 10:46 AM
Wesley Clark Wesley Clark is offline
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Yes, but its hard to define.

There is something like 200 trillion in wealth in America. If 1 person owned all 200 trillion and the rest of us had $0 in wealth, then that person would be too rich.

I don't know where the upper limit is. People like Bill gates are worth $100 billion. I don't consider that too rich myself, and people like him are going to donate most of their money anyway. Many rich people agreed to donate half or more of their wealth.
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  #7  
Old 01-10-2018, 10:51 AM
Starving Artist Starving Artist is online now
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No, society wouldn't be better off. In the first place, most of the money belonging to 'the rich' isn't just sitting in a vault somewhere waiting to be spent. It's invested in money-making enterprises that people benefit from (which is why the rich get rich in the first place, people want or need the goods or services they offer and are willing to trade their money in order to obtain them). So by deciding to tax them at a rate intended to suppress their wealth, you are also suppressing the incentive they have to keep producing whatever it is that people want and are willing to pay for, and this of course will result in less money being earned by them and therefore less tax being paid by them.

There is nothing wrong with people having large amounts of wealth. Their money doesn't keep you from earning whatever you're capable of, and similarly, when they lose money it doesn't come out of your pocket. Bill Gates and Warren Buffet could go broke tomorrow and you will still be bringing home the same amount you're earning now. And similarly again, your income hasn't declined as a result of their wealth increasing.

In short, everything works better when people are free to earn as much as they're capable of by providing things that other people want. Take away their earnings and there's less incentive to generate them, and it's obvious when people stop making money the amount available for taxation decreases. So you get both less good stuff and less money for taxes.

Not a good plan.
  #8  
Old 01-10-2018, 11:24 AM
kopek kopek is offline
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I went yes although I admit to being at a loss to define how much is too much and what solutions should be used.
  #9  
Old 01-10-2018, 11:30 AM
Spice Weasel Spice Weasel is online now
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For me, I am unconcerned with the maximum wealth of a given individual. I am more concerned with the stratification of wealth within a society as a whole, and with policies designed to augment wealth at the expense of the poor.
  #10  
Old 01-10-2018, 11:43 AM
Starving Artist Starving Artist is online now
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But what exactly is the problem with the stratification of wealth in society as a whole. In real world terms how is this harming anyone? A relatively small number of people produce the things that other people want, therefore the money people spend on these things flows to the relatively few who provide them. I see no problem with that at all, other than perhaps jealousy or resentment caused by the view that it isn't 'fair'. In my view it's perfectly fair, logical and reasonable that the most money goes to those who are providing the most of those things that people want and choose to spend money for. The true unfairness lies in trying to force a different type of 'fairness' that is anything but.

And what are these policies that augment wealth at the expense of the poor? The only way I know of in which the wealthy harm the poor is by resisting efforts of the government to take away their money to spend on the poor.
  #11  
Old 01-10-2018, 11:48 AM
Icarus Icarus is offline
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I voted "Yes" but (and it's a big but).

I would not agree that taxing away the wealth is a good practice. Why should the government end up with that money? However, I think there should be some type of public policy that discourages amassing vast wealth resulting in significant income & wealth inequality. I sure don't know what that is, though.

I would rather see society as a whole cease to celebrate vast wealth. Yes, everyone wants to be rich, and success should be applauded, but vast wealth should be seen as obscene or immoral (some do already) and significant charity / philanthropy as mitigating that.
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  #12  
Old 01-10-2018, 11:49 AM
Jackmannii Jackmannii is offline
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Quote:
Originally Posted by Velocity View Post
While I voted "yes," it's hard to answer.
It's easy.

Anyone with lots more money than me has too much.
  #13  
Old 01-10-2018, 12:02 PM
Unabashed Fascist Unabashed Fascist is offline
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I feel like yes is the moral answer here, especially if we take in to account the ownership of land. The competitive nature or existence, and the finite nature of resources necessitate that at some level people need to share what's available or die.

Just FYI, I'm taking the question to its hypothetical extreme, in which one person owns the entirety of the earth and everything on and in it.

Edit: This is assuming that the definition of 'rich' goes beyond just having money, but includes all forms of wealth.

Last edited by Unabashed Fascist; 01-10-2018 at 12:06 PM.
  #14  
Old 01-10-2018, 12:03 PM
Johnny L.A. Johnny L.A. is offline
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Originally Posted by Icarus View Post
I would not agree that taxing away the wealth is a good practice. Why should the government end up with that money? However, I think there should be some type of public policy that discourages amassing vast wealth resulting in significant income & wealth inequality. I sure don't know what that is, though.
It's easy. Have progressive marginal tax rates with the highest bracket at 95%. That discourages hoarding of money that does not help society. It encourages people and corporations to spend massive profits on reinvestment in their companies, hiring workers, and stimulating the economy, all of which are good for society. The money spent on building the economy reduces the taxes these people and companies have to pay. (Remember that nobody actually paid the top tax rate back in those halcyon days so-called Conservatives long for.)
  #15  
Old 01-10-2018, 12:10 PM
snowthx snowthx is offline
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Originally Posted by Wesley Clark View Post
There is something like 200 trillion in wealth in America. If 1 person owned all 200 trillion and the rest of us had $0 in wealth, then that person would be too rich.
This is along the lines I was thinking. To take it another step - if X number of people hold Y percent of all the wealth in America, what is the optimal balance?

In countries where much wealth is held by a few, you end up with a host of problems. Note that wealth, in many cases, translates to power, and access to power.

I agree there should be no upper limit on how much wealth someone can acquire, and enforcement of such a hypothetical limit would be problematic, but the answer to the above equation will vary according to your political compass, I would guess.
  #16  
Old 01-10-2018, 12:10 PM
Wesley Clark Wesley Clark is offline
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Originally Posted by Starving Artist View Post
But what exactly is the problem with the stratification of wealth in society as a whole. In real world terms how is this harming anyone? A relatively small number of people produce the things that other people want, therefore the money people spend on these things flows to the relatively few who provide them. I see no problem with that at all, other than perhaps jealousy or resentment caused by the view that it isn't 'fair'. In my view it's perfectly fair, logical and reasonable that the most money goes to those who are providing the most of those things that people want and choose to spend money for. The true unfairness lies in trying to force a different type of 'fairness' that is anything but.

And what are these policies that augment wealth at the expense of the poor? The only way I know of in which the wealthy harm the poor is by resisting efforts of the government to take away their money to spend on the poor.
Government policy plays a huge role in shaping income inequality using endless policies that all play a minor role in shaping the economy.

Canada and Australia have economies and per capita wealth about the same as the US, but much lower rates of income inequality. You can have a wealthy, developed nation with lower rates of inequality. It depends on government policy. The US has been pursuing policies that make inequality worse while Canada hasn't.
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Last edited by Wesley Clark; 01-10-2018 at 12:11 PM.
  #17  
Old 01-10-2018, 12:19 PM
Wesley Clark Wesley Clark is offline
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Polices that enhance the wealthy while harming everyone else.

Supply side tax cuts (cuts to income, dividend, capital gains tax)
Regressive tax hikes (hikes in FICA taxes, sin taxes, real estate taxes, fuel taxes, sales taxes, abolition of SALT deductions)
Suppression of labor unions
Low/no minimum wage
Regulatory capture and government capture by monied interests
Cutting subsidies for education



There are probably endless other policies too. Of them, suppression of labor unions is probably a major one. If 30% of Americans were in a union then income inequality would likely be much lower. If you found a way to totally prohibit bribery in the form of lobbying and regulatory capture, income inequality would go down too. You can reduce income inequality without wealth redistribution via taxation, however wealth redistribution is a good idea that should also be implemented.
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Last edited by Wesley Clark; 01-10-2018 at 12:19 PM.
  #18  
Old 01-10-2018, 12:20 PM
ftg ftg is offline
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Oligarchies are bad. A mono-oligarchy would be even worse.

If someone has so much money that a large percentage of politicians are forced to kowtow to that person for most of their campaign contributions would be very, very, very bad.

Such a person on their own could overwhelmingly flood the airwaves with election ads touting their own personal preferences. (All disguised as to their source, of course.)
  #19  
Old 01-10-2018, 12:33 PM
Starving Artist Starving Artist is online now
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Quote:
Originally Posted by Wesley Clark View Post
Government policy plays a huge role in shaping income inequality using endless policies that all play a minor role in shaping the economy.

Canada and Australia have economies and per capita wealth about the same as the US, but much lower rates of income inequality. You can have a wealthy, developed nation with lower rates of inequality. It depends on government policy. The US has been pursuing policies that make inequality worse while Canada hasn't.
I reiterate, what difference does it make? How does that inequality harm anyone?
  #20  
Old 01-10-2018, 12:49 PM
Starving Artist Starving Artist is online now
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Originally Posted by Wesley Clark View Post
Polices that enhance the wealthy while harming everyone else.

Supply side tax cuts (cuts to income, dividend, capital gains tax)
Regressive tax hikes (hikes in FICA taxes, sin taxes, real estate taxes, fuel taxes, sales taxes, abolition of SALT deductions)
Suppression of labor unions
Low/no minimum wage
Regulatory capture and government capture by monied interests
Cutting subsidies for education



There are probably endless other policies too. Of them, suppression of labor unions is probably a major one. If 30% of Americans were in a union then income inequality would likely be much lower. If you found a way to totally prohibit bribery in the form of lobbying and regulatory capture, income inequality would go down too. You can reduce income inequality without wealth redistribution via taxation, however wealth redistribution is a good idea that should also be implemented.
Virtually everything you just listed amounts to taking money from the wealthy and spending it on the poor, including labor unions which employ extortion to exact artificially high wages from business owners.

And I disagree wholeheartedly that government redistribution of wealth is a good thing. First and foremost it's patently unfair. Secondly, it discourages productivity and encourages non-productivity. It creates a sense of entitlement ("the world owes me a living"). And it kills incentive on the part of those who aren't wealthy to attempt to improve their circumstances. Why concentrate on getting an education and learning a craft or job skill when the government will take care of everything for you by taking money away from those who already have?
  #21  
Old 01-10-2018, 12:49 PM
Vinyl Turnip Vinyl Turnip is offline
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Originally Posted by Starving Artist View Post
I reiterate, what difference does it make? How does that inequality harm anyone?
If I'm getting a blowjob from a supermodel and you're having your nutsack branded with a hot iron, on average we're doing okay!
  #22  
Old 01-10-2018, 12:52 PM
silenus silenus is online now
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Originally Posted by Johnny L.A. View Post
It's easy. Have progressive marginal tax rates with the highest bracket at 95%. That discourages hoarding of money that does not help society. It encourages people and corporations to spend massive profits on reinvestment in their companies, hiring workers, and stimulating the economy, all of which are good for society. The money spent on building the economy reduces the taxes these people and companies have to pay. (Remember that nobody actually paid the top tax rate back in those halcyon days so-called Conservatives long for.)
Agreed. Couple that with some really punitive estate taxes and we're good to go.
  #23  
Old 01-10-2018, 12:54 PM
up_the_junction up_the_junction is offline
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Originally Posted by Quimby View Post
That is do you think society would be better if there were a theoretical cap on how much money someone could acquire for themselves. The exact limit doesn't matter but let's assume the enforcement is through policy not force. For example, income after XX dollars is taxed at 95%.
Not income. Tax overall wealth.
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  #24  
Old 01-10-2018, 01:00 PM
Corry El Corry El is offline
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The responses have gotten into a debate about the proper *degree* of forced redistribution of income/wealth. And it is a debate of degree: the voting constituency totally against that is minuscule.

But the question is a binary whether one person could have so much it resulted in a distorted society. Obviously yes, as in the example already given, one person owns every penny of a country's wealth. You have to be pretty extreme, past the category of internet people who *say* they want *no* welfare state, to argue that would be healthy.

OTOH the proposition that the degree of income/wealth inequality in say the US now, after accounting for existing govt-forced transfers is unhealthy is purely subjective. The proposition that it's enough to constrain per capita GDP growth* is almost surely wrong, though you often hear that. It's probably the other way around if anything.

*which is an average; redefining growth as growth of the median income is just changing definitions to try to make one's proposition, that inequality at US level holds back growth, into a quasi-tautology. Obviously if the distribution has become more skewed the average has outpaced the median. That doesn't mean the distribution change is constraining growth of the average.

Last edited by Corry El; 01-10-2018 at 01:01 PM.
  #25  
Old 01-10-2018, 01:03 PM
naita naita is offline
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Money is power. Giving people extreme amounts of power without serious checks and balances is over time dangerous for any society.
  #26  
Old 01-10-2018, 01:03 PM
Starving Artist Starving Artist is online now
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Originally Posted by Vinyl Turnip View Post
If I'm getting a blowjob from a supermodel and you're having your nutsack branded with a hot iron, on average we're doing okay!
If your nutsack is getting branded it's not because someone else is getting supermodel blowjobs. Now it's true that your lot would be improved if somehow the government were to pry the supermodel off the rich guy and attach her to you, but that doesn't mean that the circumstances that led her to the rich guy in the first place have anything to do with the hot iron causing you problems.
  #27  
Old 01-10-2018, 01:07 PM
Starving Artist Starving Artist is online now
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Money is power. Giving people extreme amounts of power without serious checks and balances is over time dangerous for any society.
So we keep hearing. But just how exactly have the country's rich employed all this supposed power? And how is it keeping anyone down or harming them? As far as I can tell most of their legislative efforts are focused on trying to keep the wolves away from their stash. Taking money from them and giving it to everyone else is not a sound remedy to excessive power anyway. That's what laws and regulations are for.

Last edited by Starving Artist; 01-10-2018 at 01:08 PM.
  #28  
Old 01-10-2018, 01:14 PM
Corry El Corry El is offline
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Originally Posted by Johnny L.A. View Post
It's easy. Have progressive marginal tax rates with the highest bracket at 95%. That discourages hoarding of money that does not help society. It encourages people and corporations to spend massive profits on reinvestment in their companies, hiring workers, and stimulating the economy, all of which are good for society. The money spent on building the economy reduces the taxes these people and companies have to pay. (Remember that nobody actually paid the top tax rate back in those halcyon days so-called Conservatives long for.)
The reason nobody paid those rates in the past was loopholes, which are politically inevitable once marginal rates get to a certain point.

Anyway the missing factor in your description is more basic. In the US tax system as it has existed up to now, reinvesting profits into hiring workers, stimulating the economy etc has not exempted those profits from taxes. The source of new capital is profits *after* taxes. If you took the current US system and just raised the rate to 95%, no loopholes, that would mean virtually no money available to invest in anything. It would make it the govt's role, since they'd collected all that money, to invest. The degree to which the govt rather than private entities should invest in and therefore naturally own 'the means of production' is debatable across a spectrum, but it certainly has drawbacks at a certain point.

Your idea would make some sense with a big modification to the tax system. A complete deduction for capital reinvestment (not just a depreciation deduction for existing assets). That's called a progressive consumption tax. Then the rates on consumption, income *after reinvestment* can be higher (though 95% is hyperbole obviously) without constraining investment, which is where future living std increases come from.

I personally find it disappointing that idea, around a long time, gained limited traction in the recent tax debate (it was enacted in a way on the corporate side, through allowing same year 100% depreciation by companies, but only for a few years if not renewed, and not on the personal side). However it's the essence of a supply side idea.

Anyway you can't have sky high tax rates on profit/income counted *before reinvestment* (as they are taxed now) and then say that's going to spur reinvestment. It's exactly the other way around. Except to the extent the job of investing in new assets is turned over to the govt, which again you don't have to be 100% against in all cases to see big potential problems with that if greatly expanded.

Last edited by Corry El; 01-10-2018 at 01:16 PM.
  #29  
Old 01-10-2018, 01:17 PM
Starving Artist Starving Artist is online now
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I would point out also that most of the harm done in the last century (and by harm I mean death, repression and misery) has come not from any power the wealthy have but from governments seeking to enforce economic equality.
  #30  
Old 01-10-2018, 01:24 PM
iamthewalrus(:3= iamthewalrus(:3= is online now
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Originally Posted by Starving Artist View Post
But what exactly is the problem with the stratification of wealth in society as a whole. In real world terms how is this harming anyone?
Extreme wealth strains the concept of a civil society of laws.

Being a billionaire doesn't just buy you big houses and fancy cars. It buys you your own laws, and insulation from normal civil order. Enough money translates to power, and power corrupts.

I'm not sure what the solution to the problem is. That is: I think that the presence of billionaires is probably a bad thing for society, but any policies put in place to prevent them might be even worse.

But there are clearly problems with extreme wealth. You don't have to look that hard to find them.
  #31  
Old 01-10-2018, 01:35 PM
Little Nemo Little Nemo is offline
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Originally Posted by Starving Artist View Post
No, society wouldn't be better off. In the first place, most of the money belonging to 'the rich' isn't just sitting in a vault somewhere waiting to be spent. It's invested in money-making enterprises that people benefit from (which is why the rich get rich in the first place, people want or need the goods or services they offer and are willing to trade their money in order to obtain them). So by deciding to tax them at a rate intended to suppress their wealth, you are also suppressing the incentive they have to keep producing whatever it is that people want and are willing to pay for, and this of course will result in less money being earned by them and therefore less tax being paid by them.
There's a whole bunch of holes in your argument.

Money doesn't sit in a vault. Okay. So what does it matter who owns the money. If a wealthy guy owns a billion dollars, it's out there creating new wealth. And if the government takes the money from the wealthy guy, the money will still be out there creating new wealth.

If your claim is that money always generates wealth, then it shouldn't matter if it's owned by billionaires or governments. But if money sometimes doesn't create wealth, then the rest of your argument collapses.

What happens if a bunch of money ends up in the hands of a non-productive billionaire? If our goal, as a society, is to create new wealth then we should get that money away from him. If that's not our goal, then why should we care if billionaires keep their money? It doesn't matter if they're creating new wealth or not.

Maybe the secret is to have a lot of money. It makes sense for billionaires to have a lot of money because then they'll go out and use it. It doesn't make sense for middle class people and poor people to get more money; they wouldn't have enough to do anything significant with it.

But if the key to creating new wealth is to accumulate it into the largest pile, shouldn't we encourage high taxes? That way the government will have a much bigger accumulation of money that any individual billionaire could ever have. So based on size, it's better for the government to have money than for rich people to have it just as it's better for rich people to have money than for poor people to have it.

What about talents? According to your argument, rich people have the talent to create new wealth. As long as they have an incentive to do so. If that's the case, we should provide them with more incentive - by taking away most of the money they have. That will motivate them to put their talents to work and create some new wealth rather than just resting on the wealth they already have.
  #32  
Old 01-10-2018, 01:40 PM
Starving Artist Starving Artist is online now
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Originally Posted by iamthewalrus(:3= View Post
Extreme wealth strains the concept of a civil society of laws.

Being a billionaire doesn't just buy you big houses and fancy cars. It buys you your own laws, and insulation from normal civil order. Enough money translates to power, and power corrupts.

I'm not sure what the solution to the problem is. That is: I think that the presence of billionaires is probably a bad thing for society, but any policies put in place to prevent them might be even worse.

But there are clearly problems with extreme wealth. You don't have to look that hard to find them.
Yes, people keep saying this, but when I ask for real world examples I don't seem to get anything back. So far the dreaded power and abuse that money brings seems to be mostly theoretical. On the other hand we have a century's worth of the most egregious consequences of power when wielded by governments intent on doing away with income inequality. Yet no one around here ever says a word about that. It seems to me that if one wants to be fearful of power, a government seeking to do away with money and class distinctions is far more frightening.
  #33  
Old 01-10-2018, 01:51 PM
Johnny L.A. Johnny L.A. is offline
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The reason nobody paid those rates in the past was loopholes, which are politically inevitable once marginal rates get to a certain point....
Of course there were loopholes. Loopholes are necessary for a progressive tax structure. I don't know of anyone suggesting removing all loopholes from a progressive tax. The only ones I see suggesting removing loopholes are those who push for an incredibly regressive flat tax (or something like a flat tax) with those at the top paying a lower rate than those at the bottom. (See, a flat tax sounds good to the lumpen, but those at the top still manage to pay a lower rate.) Can you point to where I suggested closing all loopholes?

I also disagree that there should be a 100% deduction for capital investments. Otherwise companies could conceivably buy, say, new Thingamajig Machines every year, resulting in a glut of used Thingamajig Machines. Or unscrupulous people may abuse the system such that they don't actually buy new Thingamajig Machines, but through creative accounting make it appear that they have and take the deduction. Better to have companies invest in themselves, rather than spend money that could otherwise be used for investment.

As to pre-tax vs. post- vs. pre-investment deductions, my dad had a couple of airplanes that he leased back to an FBO. The expenses were taken off of the top of his taxes. This is the first time I've heard that you're taxed on money you don't have.
  #34  
Old 01-10-2018, 01:55 PM
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Do you believe that someone could be "too rich"?

It depends on which politicians they donate to.
  #35  
Old 01-10-2018, 02:02 PM
Starving Artist Starving Artist is online now
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There's a whole bunch of holes in your argument.

Money doesn't sit in a vault. Okay. So what does it matter who owns the money. If a wealthy guy owns a billion dollars, it's out there creating new wealth. And if the government takes the money from the wealthy guy, the money will still be out there creating new wealth.

If your claim is that money always generates wealth, then it shouldn't matter if it's owned by billionaires or governments. But if money sometimes doesn't create wealth, then the rest of your argument collapses.

What happens if a bunch of money ends up in the hands of a non-productive billionaire? If our goal, as a society, is to create new wealth then we should get that money away from him. If that's not our goal, then why should we care if billionaires keep their money? It doesn't matter if they're creating new wealth or not.

Maybe the secret is to have a lot of money. It makes sense for billionaires to have a lot of money because then they'll go out and use it. It doesn't make sense for middle class people and poor people to get more money; they wouldn't have enough to do anything significant with it.

But if the key to creating new wealth is to accumulate it into the largest pile, shouldn't we encourage high taxes? That way the government will have a much bigger accumulation of money that any individual billionaire could ever have. So based on size, it's better for the government to have money than for rich people to have it just as it's better for rich people to have money than for poor people to have it.

What about talents? According to your argument, rich people have the talent to create new wealth. As long as they have an incentive to do so. If that's the case, we should provide them with more incentive - by taking away most of the money they have. That will motivate them to put their talents to work and create some new wealth rather than just resting on the wealth they already have.
Sorry, I have to leave now, but in parting I'll just say that it isn't my argument that's full of holes.

But before I leave, let me give you an example of what happens when government, not well-heeled individuals, create products. Take a look at the East German Trabant, surely one of the most laughable excuses for an automobile ever created. I'll hit a few of the high points:

* 500 or 600 cc two-stroke engine

* 1 - 30 hp depending on whether you're going uphill or downhill.

* Fuel tank above the engine which is gravity fed to eliminate the expense of a fuel pump. There is no fuel gauge, the fuel is checked under the hood with a dipstick.

* Ten year waiting list. Used Trabants sell for more than new ones because at least they're available.

* Innovation non-existent. Virtually unchanged in 40 years.

Now let's take a look at what our society gets from our evil and powerful capitalist overlords:

* Ta-da (And of course this is only one of dozens of models of automobiles and trucks people in our society have to choose from.)

Capitalism, and the produce of the rich guys it creates, are good. Pie-in-the-sky efforts at big daddy government enforcing fairness and equality for all are not.

Last edited by Starving Artist; 01-10-2018 at 02:05 PM.
  #36  
Old 01-10-2018, 02:56 PM
iamthewalrus(:3= iamthewalrus(:3= is online now
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Yes, people keep saying this, but when I ask for real world examples I don't seem to get anything back. So far the dreaded power and abuse that money brings seems to be mostly theoretical.
The criminal justice system is rife with examples. Poor people get abused and locked up. Rich people can lawyer, obstruct, and bribe their way out of punishment.

The legislative system is rife with examples. Rich people get special exemptions inserted into laws for their benefit. Poor people get whatever.

It boggles the mind that you really cannot think of any cases where rich people have exploited their wealth for power.

Perhaps we're speaking past each other because we are failing to agree on some basic assumption?
  #37  
Old 01-10-2018, 03:03 PM
B-Rad B-Rad is offline
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Beowulf and the dragon.

Treasures are typically distributed amongst the surviving participants of a given enterprise. In this process, social bonds of trust, loyalty, and kinship are strengthened and the greater society is stronger as a result. In hoarding treasure and taking it out of circulation, the dragon effectively undermines society by making it harder for individuals to reinforce bonds of trust, loyalty, and kinship. After all, if there is no treasure to distribute then nobody can demonstrate generosity or philanthropy, and nobody is deserving of the loyalty of anyone else. So profound is this effect that by the time the treasure-hoarding dragon is addressed, Beowulf finds himself abandoned by those who, in the past, swore oaths of loyalty to him, to fight beside him for the mutual benefit of all. Beowulf, the embodiment of everything valued by his society, dies as a result.

The point is, great wealth is not in and of itself evil, as long as you are willingly giving a fair amount of it to those who, ultimately, helped you to get it in the first place. In contrast, hoarding it out of what can only be seen as greed, is destructive to a society. And as we see in this tale, as well as more recent events (18th century France), eventually those with whom you ought to have been sharing will eventually rise up and destroy you even if it means destroying themselves in the process.

More practically, Bill Gates & friends made a pretty god living by being innovative and aggressive--modern day Vikings, if you will. Similarly, the Walton family is stacking mad chips by ruthlessly applying a well thought out marketing strategy. The big difference is Gates is doing the Beowulf thing and compensates his employees well, and willingly redistributes huge chunks of wealth to those in need. WalMart employees, on the other hand, get fucked in every way possible by their employer, and I'm unaware of any philanthropy the Waltons are into that represents a fair portion of their overall income.

So, it's not really about wealth or wealthy people, it's about the sort of people who are wealthy and whether or not they share, in any meaningful and socially-bonding way, the fruits of their labors.
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  #38  
Old 01-10-2018, 03:07 PM
Wesley Clark Wesley Clark is offline
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I reiterate, what difference does it make? How does that inequality harm anyone?
Since wealth is finite, too much congregated at the top means that everyone else lacks enough wealth to buy food, shelter, transportation, education and medical care. The more people lack these things, the more radicalized they become. That is why communism happens. Communism happens when the people are so poor, destitute and ignored by the powers that be that they become desperate. Ignoring the people and hoping they go away won't make them go away, it'll just radicalize them. You need some wealth redistribution to keep authoritarian governments from becoming too appealing.

Too much wealth at the top makes it easier for the wealthy to buy up the levers of influence like politicians or the media. In some other countries they can buy up the police, military, judiciary, etc too.

Since the economy is mostly demand based, too much wealth at the top can reduce consumer demand, slowing economic growth. Taxing the money and investing it in education, health care or mass transit can create more jobs.

http://fpif.org/how_to_create_more_jobs/

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According to our just-released study, each billion dollars of government spending allocated to tax cuts for personal consumption generates approximately 10,800 jobs. Investing the same amount in the military creates 8,500 jobs. Investing it in health care yields 12,900 jobs; in education, 17,700 jobs; in mass transit, 19,800 jobs; and in construction for home weatherization and infrastructure, 12,800 jobs.
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  #39  
Old 01-10-2018, 03:08 PM
Shodan Shodan is offline
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What about talents? According to your argument, rich people have the talent to create new wealth. As long as they have an incentive to do so. If that's the case, we should provide them with more incentive - by taking away most of the money they have. That will motivate them to put their talents to work and create some new wealth rather than just resting on the wealth they already have.
Why would it motivate them? The government is just going to take that away as well.

I build a house; you come along and burn it down. I am going to build another house for you to burn - why, exactly?

Regards,
Shodan
  #40  
Old 01-10-2018, 03:41 PM
Little Nemo Little Nemo is offline
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But before I leave, let me give you an example of what happens when government, not well-heeled individuals, create products.
Your argument was that large fortunes are good because they're "invested in money-making enterprises that people benefit from".

You just provided a counter-example; a case of a large sum of money being wasted on something that nobody benefited from. Your own example disproves your argument.
  #41  
Old 01-10-2018, 03:49 PM
Johnny L.A. Johnny L.A. is offline
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Your argument was that large fortunes are good because they're "invested in money-making enterprises that people benefit from".
Trickle-down economics has been proven not to work.
  #42  
Old 01-10-2018, 03:54 PM
Really Not All That Bright Really Not All That Bright is offline
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Sorry, I have to leave now, but in parting I'll just say that it isn't my argument that's full of holes.

But before I leave, let me give you an example of what happens when government, not well-heeled individuals, create products. Take a look at the East German Trabant, surely one of the most laughable excuses for an automobile ever created.
This is an awful example. Yes, by the 1980s the Trabant was awful. But in 1957 it was one of the most innovative cars ever built. Unibody construction, a transversely mounted front-wheel drive arrangement and full independent suspension would all ultimately go on to become the underpinnings of most modern cars. Duroplast turned out to be a poor panel material because it was hard to dispose of, but initially it was a stroke of genius.
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Originally Posted by Starving Artist View Post
A relatively small number of people produce the things that other people want, therefore the money people spend on these things flows to the relatively few who provide them. I see no problem with that at all, other than perhaps jealousy or resentment caused by the view that it isn't 'fair'.
That's because you are looking at these things in the abstract. I agree that the situation you describe is perfectly okay. But in the real world, people who have made tons of money making the things other people want spend huge amounts of it to protect their positions when people no longer want their things.

In the 1870s, John D. Rockefeller was a brilliant visionary and business innovator. From about 1880 until 1911, Rockefeller was an asshole who used his massive wealth to stifle every competitor and protect his monopoly.
  #43  
Old 01-10-2018, 03:58 PM
Little Nemo Little Nemo is offline
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Why would it motivate them? The government is just going to take that away as well.
The argument is this:

1. Rich people want to be rich.
2. Rich people have the ability to become richer.
3. Society benefits from the side-effects of rich people becoming richer.

If you disprove any of the premises then the argument falls apart.

But if you do accept the premises then my conclusion follows naturally from them. Rich people have the ability to become rich and the desire to be rich. So the way to get them to use their ability is to make them not-rich. The desire to go back to being rich will then motivate them to use their ability.
  #44  
Old 01-10-2018, 03:59 PM
Little Nemo Little Nemo is offline
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Trickle-down economics has been proven not to work.
I didn't say it was my argument.
  #45  
Old 01-10-2018, 04:34 PM
Johnny L.A. Johnny L.A. is offline
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I didn't say it was my argument.
I was agreeing with you.
  #46  
Old 01-10-2018, 04:41 PM
Icarus Icarus is offline
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I build a house; you come along and burn it down. I am going to build another house for you to burn - why, exactly?
Nope, I'm going to build another house, because I want a house. And I will build a second house, so there is one to burn.
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  #47  
Old 01-10-2018, 05:05 PM
Corry El Corry El is offline
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I also disagree that there should be a 100% deduction for capital investments. Otherwise companies could conceivably buy, say, new Thingamajig Machines every year, resulting in a glut of used Thingamajig Machines. Or unscrupulous people may abuse the system such that they don't actually buy new Thingamajig Machines, but through creative accounting make it appear that they have and take the deduction. Better to have companies invest in themselves, rather than spend money that could otherwise be used for investment.

As to pre-tax vs. post- vs. pre-investment deductions, my dad had a couple of airplanes that he leased back to an FBO. The expenses were taken off of the top of his taxes. This is the first time I've heard that you're taxed on money you don't have.
Loopholes are a side issue from your basic point I answered so I won't belabor that except to say if the rate is supposedly 95% but there are lots of loopholes...it isn't really 95%. And how close it really is depends how many. And the workability or efficiency depends also what they are. IOW it's impossible to reasonably discuss a particular rate (again even a serious suggestion of one not 95%) if there are major exceptions but they aren't stated.

The main point deals which what I just quoted of your recent post. It's fine if you don't agree with a 100% deduction on investment. But assuming a very high *effective* tax rate on *pre reinvestment* income such a high rate cannot cause individuals or companies to invest more in 'stimulating the economy' as through hiring, building things etc. And that's not a debate about incentives, it's simple arithmetic. If the tax system were to take 95% of income/profit above a certain level not deducting investment, there would be hardly any money to invest even if it had zero effect of discouraging economic activity.

The only plausible way to say what you did originally, 'high tax rate to get corps/rich people to invest more in the real economy' is high tax rates on profit income *minus* reinvestment. Otherwise you have to accept one of two related realities: the higher tax rates mean less money in the private sector's hands to invest, and the govt having been the collector would now be responsible to invest in things we currently expect the private sector to invest in.

Only a progressive consumption tax (higher rates but on income profit *excluding* what is reinvested) could have higher rates while increasing investment*. But in your latest post you kind of contradicted your own earlier point. Now it seems you *don't* want more investment because it might be 'excessive'. That's not what you said originally.

*again with rates within reason. Obviously even if reinvestment was exempt from tax people wouldn't invest to ever at any point in the future be able to consume 5% of what they'd earned. Which is why loopholes in a such a system of super high taxes have to be extensive, and typically (and historically) the product of inside dealing. Otherwise things just don't work. The Economist, which is hardly 'right wing' is fond of quoting the IMF's finding that the point at which tax revenue starts to actually decline with higher marginal rates on individual income is around 44%, used by Economist to reject US GOP arguments that cuts from say 40% to 37% (or back to the 20's or whatever as is sometimes proposed) would raise revenue. However, with perhaps loose UK journalist view of US taxes they neglect to consider that the effective highest US federal rate was prior to latest tax bill actually in the low 40's including deduction phaseouts and Medicare tax surcharge above a certain level, then states have up to 10% or so rates on top of that. Now in the new tax plan the highest nominal rate on 'ordinary' income is 37, but most state taxes aren't deductible anymore for high earners. So most high US earners are at or near the point where IMF says a higher marginal rates would mean less revenue. And for the general chorus of 'why can't the US be more like Europe?', European countries don't have max income tax rates much higher than the US including state/local. The two big differences are less unequal income distributions *before* tax in Europe, and big 'regressive' taxes like VAT's and high fuel taxes in Europe which raise much more than state/local sales taxes do in the US.

Last edited by Corry El; 01-10-2018 at 05:08 PM.
  #48  
Old 01-10-2018, 05:09 PM
Johnny L.A. Johnny L.A. is offline
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Loopholes are a side issue from your basic point I answered so I won't belabor that except to say if the rate is supposedly 95% but there are lots of loopholes...it isn't really 95%.
No time to answer everything, so I'll address this.

If you go back and read my post, you will see that I said nobody paid the top tax rate.
  #49  
Old 01-10-2018, 05:11 PM
Corry El Corry El is offline
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No time to answer everything, so I'll address this.

If you go back and read my post, you will see that I said nobody paid the top tax rate.
OK but I think that rather seriously undercuts your 'solution' of a 95% tax rate. We'll solve a problem by having a rate nobody pays?

Again I think the more significant confusion on your part, which would exist in a serious debate also, is the idea that higher and higher taxes on profit/income without a deduction for investment could increase investment, hiring, stimulating by the private sector. That's arithmetically impossible.
  #50  
Old 01-10-2018, 05:26 PM
gigi gigi is offline
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Originally Posted by Morgenstern View Post
3 impossible things.

1. Being too rich.
2. Being too sexy.
3. Having a garage that's too big.
Completely off-topic, but I just found out what Morgenstern means. What a great name!
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