“Productive people will stop working”. No they won’t, because if they did, they wouldn’t be productive any more. Seriously, Bill Gates never has to work another day in his life, but is he just kicking back? No, he’s doing stuff, maybe not the same stuff that got him his fortune, but stuff nonetheless. There’s a hazard that comes with viewing people as simple “economic units” whose behavior in response to certain economic stimuli is utterly predictable. Because they’re not, and it isn’t.
Proposal : stop the accumulation of all wealth into fewer and fewer hands through inheritance taxes.
No, they won’t…what they will do is figure out ways to shelter the money or move it offshore somewhere. Want to see an example of this in action? Look up what the wealthy in China under the CCP have been doing for a decade or so now.
This place has some of the most interesting “soak-the-rich” idea threads. My impression is that they’re usually started by leftists with wildly optimistic worldviews and very little basis in reality.
Heavily tax inheritances and gifts. Provide plenty of alternatives to creation of trusts and foundations for purposes that benefit everyone, and substantially reduce income taxes. The rich love to avoid taxes.
But more importantly is to change the system to stop the accumulation of wealth by playing the system. Those who actually build the economy deserve the wealth they garner but those who simply amass wealth by buying and selling ownership and resources aren’t producing the same kind of residual benefit for anyone else.
Any group of “those who actually build the economy” is free to go out and start their own company without any interference from “those who simply amass wealth by buying and selling ownership” anytime they want, and if they succeed, they won’t have to share a dime of their profits with those blood-sucking investors.
So a grocery store doesn’t produce any benefit to anyone but the owners?
Regards,
Shodan
There’s common ground here – everyone wants a strong middle class and good jobs with sufficient wages to support a family. Even Republicans.
[
](Americans have no idea how bad inequality is: New Harvard Business School study.)
I’d bet that Republicans who don’t think the government should actually do something about inequality would probably quietly admit that a vast disparity in wealth isn’t ideal, although many would (rightly) request some hard evidence before publicly committing to such a stance.
I think the differences between the political philosophies are twofold. One, Republicans back solutions that, to steal your phrase, have “little basis in reality.” Solutions like supply side economics, low taxes to spur growth, etc. Two, Republicans don’t really care if their solutions work or not. Which is to say, they may want a strong middle class, but if low taxes and small government don’t yield a strong middle class, then oh well, because low taxes and a small government are ideologically more important than whatever results they’re supposed to produce.
In contrast, wealth redistribution will at least work. There may be unintentional and/or undesirable consequences of such a solution, but it would directly achieve Democrats’ stated goals, and in short order. Democrats would rather have a flawed system that kinda works than a “pure” system that doesn’t.
I don’t understand what you are asking about. I never mentioned grocery stores.
Then no doubt you can cite the examples where confiscating the estates of the wealthy lead to an abundance of middle class jobs with good wages.
Regards,
Shodan
You said
A grocery store buys ownership of resources and sells it.
I own a grocery store. I buy a load of potatoes from the wholesaler. I now have ownership of the resource. I then sell ownership of the potatoes to buyers. Have I produced any residual benefit to anyone else?
Regards,
Shodan
The non-blood-sucking investors are a great benefit to the economy. Their investments fuel competition and innovation. The blood-sucking type do the opposite, amassing ownership to prevent competition instead of producing better products and creating jobs.
Any money “confiscated” by the government and spent on public works projects and/or government employees pretty much directly results in middle class jobs with good wages. Is this up for debate? Or are we quibbling over the “abundance” of such jobs?
There’s reams of economic theory built on the notion that government spending can spur economic growth. Bush’s infrastructure spending bill was based on this theory.
I’m sorry. I think I completely misunderstood the intent of your post #24 as a criticism of investors (vs ‘those who actually build the economy’ - meaning, I thought, workers). Could you explain who you are talking about that is “amassing ownership to prevent competition instead of producing better products and creating jobs”?
[QUOTE=steronz]
Any money “confiscated” by the government and spent on public works projects and/or government employees pretty much directly results in middle class jobs with good wages. Is this up for debate? Or are we quibbling over the “abundance” of such jobs?
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I think he was asking for actual, real world examples of actual confiscation occurred and was successful, as per the OP wrt estates, not ones where we are taxing them (which we are already doing). I know of no good real world examples where actual confiscation happened that worked out well.
Yes, it’s up for debate. Check the title of the forum.
One thing to keep in mind is that the federal government spends relatively little on infrastructure. Most of the budget goes to Medicare, Medicaid, Social Security, defense, and interest on the national debt. (Cite available if you really need it, but I don’t think you do.)
The other thing is the idea of creating government jobs purely in order to create jobs. If the government jobs produce more value overall than whatever jobs would have been created by leaving the estates in private hands, then you would be correct. If they don’t, then you are subject to the broken windows fallacy.
It can. Your saying that “any money” seems to imply that it always does, and always does better than leaving the money in private hands. And it doesn’t always - see the “bridge to nowhere” or the Japanese experience of trying to combat recession and economic slump thru infrastructure spending.
The question is, which produces more jobs - government spending, especially of the sort we are discussing, or private spending.
So again I will ask for a cite - please show the times when confiscating the wealth of the rich above a certain level has worked in the past. And show your work - how many estates are over $15 million, how much we will collect if we confiscate the overage, what is the likely effect on estate planning/tax shelters/transferring assets/etc., and how the net effect will be better overall than if we include the right to dispose of your assets to your family in our notion of property rights.
Regards,
Shodan
As already pointed out this proposal will not raise that much more additional money than the current estate tax and would likely end up raising less.
Furthermore there is no evidence that more global wealth is flowing into fewer hands. The past thirty years have seen more worldwide reduction in extreme poverty than any period in the history of the world.
So this is a solution that won’t work to solve a problem that doesn’t exist.
Other than that, Mrs. Lincoln, how was the play?
Perhaps you’d find a reading of Thomas Piketty’s Capitalism in the Twenty-first Century to be informative. Paul Krugman reviews the book here.
The solution to the growing wealth inequality is to address the issues Piketty raises, among which an inheritance tax would be a useless drop in the bucket especially with the tax-avoidance strategies that would be in place.
One thing to keep in mind is the extraordinary extent of the inequality in the United States, underscored by this comment piece in the New Yorker:
However, the United States still comes out as the winner of the inequality race. That’s perhaps not too surprising: we tend to think of the United States as a very unequal country, but it’s worth noting that this perception wasn’t always accurate. The chart shows that, ninety years ago, the United States and Canada had roughly the same amount of inequality, according to this measure, while the United Kingdom was a markedly less equitable place. Today, though, the U.S. has few challengers. Even in terms of income generated by work, Piketty notes, the level of inequality in the United States is “probably higher than in any other society at any time in the past, anywhere in the world.”
That article BTW is a bit confusing because it talks about illustrative charts, but the actual charts are in the magazine article which is only available to subscribers with access to the magazine archive. But note the extraordinary ramifications of that last sentence that I bolded.
Among the many factors that have driven wealth inequality have been drastic reductions in top marginal tax rates, which were directly associated with an explosion in executive compensation rates that are now frequently hundreds of times the average company salary, even as the company might be struggling financially under incompetent management. Another factor is the amount of income that the wealthy receive from lucrative investments, and the very considerable factor that they have access to investment opportunities that normal people don’t, including the ability to enrich themselves by plundering the resources of entire companies.
Not to get too overtly partisan here, but it seems hard to avoid the conclusion that if someone wants an object lesson in how to maximize wealth inequality and keep widening the gap, they have only to read the Republican policy platform. And if they want to reverse the trend and create a slightly more equitable wealth distribution, they need to start doing pretty much the exact opposite.
Do you really think that’s what I meant? I’m talking about people who simply buy and sell ownership in companies to take advantage of market conditions without adding anything to the economy. They aren’t investing in new growth, they’re often trying to stifle competition, and they use the wealth they gain simply to keep doing the same kind of thing. I think you had some idea that’s what I was talking about, if my wording wasn’t clear you could have just said that instead of trying to twist it into the worst possible interpretation.
Investors who fund new businesses and fund capital growth of existing businesses as opposed to those who only buy shares of existing businesses to trade or to limit competition in the market. If they profit from those trades and eventually invest that profit in new growth that’s fine, unless the results of that trading rob the economy by eliminating jobs and/or shipping the business overseas. It’s the difference between the captains of industry who build real businesses and the Wall St. traders who simply take control of the markets to guarantee their returns without any additional benefit to the country and the people. I think the wealthy who create jobs and develop new products are doing everyone a service, but not all wealth is used for that purpose. There’s no magic that turns profit into a benefit for everyone, and capitalism simply to increase the wealth of the few is not a good system.