You’re missing the point. The government could step in and confiscate all of the owner’s wealth and then just have the managers continue to invest it as they’ve been doing. How would that make any difference to anyone besides the owner who lost his money?
So it wasn’t the owner who was contributing anything - it was the wealth that was contributing. And that wealth would still be contributing the same amount regardless of who owns it.
When’s the last time income inequality wasn’t a going concern for human societies? Pre-history? I suppose hunter gatherers can’t store much wealth.
The SCALE of the wealth of the top one tenth of one percent of Americans is hard to imagine. (Ok, numbers help, I’ll grant you that.) But really, a hundred milliionaire can spend his whole day, every day, drinking fine champagne, eating steaks and snorting cocaine off the butts of hookers, and it would not affect his pile at all. We can tax the ultra rich at 50 percent and they can still have their monthly trips to Barbados or Europe, their yachts, their swimming pools with fine homes attached, and they would not feel it at all in terms of their personal lifestyles. Think about Mitt Romney building an elevator for his cars in his new house. It seems insanely extravagant to many of us, but for him it’s a reasonable decision. The money doesn’t matter. Just what he wants.
My point is, for the very wealthy taxation is an abstract thing. People don’t seem to be getting this. I know the rich probably have inflated senses of what is needed for a decent lifestyle, but really … they don’t FEEL tax increases the way somebody who has to pawn his watch to get enough money to buy gas to get to work the week before payday does. If you don’t understand that … I don’t know if we can communicate.
Have you seen this? It doesnt really answer the question, but it’s pretty neat -
It was his[sup][/sup] wealth that he[sup][/sup] was contributing. Or do property rights mean nothing to you?
[sub]*Feel free to substitute the gender-specific pronouns of your choice.[/sub]
Yes, but it’s also true that if improvement reaps no benefits, even if it doesn’t get you investigated or worse, people will do their best to be the levelest little nail on the board. Or at least to be very, very discrete while reading the Dope and organizing their playlists.
Ok ok. NO, I realize it’s not a new idea. What I meant was it’s all of a suddden the ‘new’ thing in the news cycle. It went from zero to all over the place in what seemend like two days.
Thanks everyone for keeping the discussion going.
Carry on, please.
p.s. I’ve heard of Marx, but who’s the Mexican guy? Some economist?
You may like to take a look at Pareto’s work. He’s the Italian sociologist who pointed out in 1906 that inequality in wealth distribution in Italy was growing along with social unrest and posited that the two things are related (which may seem like a “no shit” idea but it’s the kind of “no shit” idea someone needs to point out); ideas such as “80% of the problems come from 20% of the customers/processes/cases” are also from his work.
The point is that as soon as people found out that it is possible for the government to steal all of your wealth, everyone with wealth would flee to a country that does not steal all of it. As soon as that happens no more factories, no more new businesses and no more innovation. Capital is highly mobile, if you treat it poorly it moves to a place where it is treated better.
I understand the envy people have of the rich but no one can say how the rich being rich harms the poor and middle class. Some claim that since the rich have a lower marginal propensity to consume that income inequality will lead to shortages in demand, but that is simply not true. In fact, if you look at the datasavings has gone down since income inequality has gone up.
Envy of the rich has been around forever but we would be better off to follow the tenth commandment instead of trying to punish those whose only crime is success.
Please point to a post where you feel envy of the rich was the primary factor in proposing higher taxes for the rich, and explain why.
Any post of yours in which you proposed raising taxes on the rich, and because class envy is a primary motivation for many liberals.
Regards,
Shodan
The problem isn’t that rich people have too much money, it’s that poor people don’t have enough. The problem isn’t that there aren’t enough jobs, the problem is that poor people don’t have enough money. The problem isn’t that minimum wage is too low to live on, the problem is that poor people don’t have enough money. The problem isn’t class envy, it’s that poor people don’t have enough money.
I think the solution is to give poor people money. With that, you fix a lot of problems and make other problems irrelevant. Decreasing unemployment or income inequality by themselves won’t necessarily give poor people more money, however. So let’s fix the actual problem – give poor people more money – and let the free market sort out employment rates and wealth distribution otherwise.
This analysis shows that we don’t necessarily need to give rich people more money. So let’s get rid of corporate welfare and divert that money towards actual welfare. You know, so poor people can have some more money.
I really do not want to be a rich person, Shodan. I aspire to be comfortably middle class, I admit to that, but wealth I don’t need. I am OK with the rich having a lot more than I have. My point is, the 1/10 or 1 percent have more than enough to live luxuriant lives, taxing them won’t hurt them in terms of the way they live. It hurts them in playing their game of “I’ve got the mostest money!” but no sane person thinks that game has any legitimacy. It’s like we’re all sacrificing so the One Percent can keep leveling up in World of Warcraft.
The problem is that a lot of people have beliefs and don’t think about them. They just accept a slogan as an explanation of everything: “Anyone who wants to raise taxes is just engaging in class warfare because they envy rich people.”
The reality is economics is complicated. There are good reasons to raise taxes and there are good reasons to lower taxes. You need to understand all the sides of the issue and balance them out to find the answers that work the best - and you’ll never get the right answer because there is no single right answer. If you think the answer is simple then you don’t understand the question.
Property is theft. “Property” refers not to personal possessions but to the means of production, and the theft is from those who actually do the work.
Also, the gender-specific pronoun is overwhelmingly “he,” and that’s another very serious problem.
Sometimes it’s success, and sometimes it’s privilege.
A comfortably middle class life in the US takes an income that is in the top 5% of all the incomes in the world today, and the top .5% of all the people who have ever lived. Would it be okay with you for someone to take half of your money and give it to chinese peasants because you are so rich?
It is probably impossible for Warren Buffett to be taxed enough to affect his lifestyle but if you tried he would undoubtedly object. He wants to spend his money on buying companys and giving huge sums of money to Bill Gates to give to poor Africans. He obviously derives some utility from that plan or he would not do it. Taking it away from him would deprive him of his utility just as much as taking a chunk of my money or yours would deprive of us of some utility even if he did not permanently wound us.
“We” are not sacrificing anything by not allowing the government to take more of the rich’s money. If Buffett decided he’d rather give his money to the treasury instead of Bill Gates, no one who doesn’t work for the government would be better off. On the contrary if we allow the government to take Buffetts money it would not be satisfied but would quickly spend it and then come for the money of the comfortably middle class since that is where the real money is. Further if rates were suddenly hiked up to a punitive rate, the owners of capital would move it out of our country and to somewhere where they can keep more of it. It is odd to decry the rich for being greedy bastards and then expect them to hold still while the government takes what they love so much. If capital starts leaving then innovation is diminished, productivity declines, and with productivy, wages. It may provide some temporary pleasure to finally see the capitalists finally get whats coming to them but in the long run a country that makes it hard for capital to grow ends up making it hard for everyone.
That’s full of discredited Randroid/neocon stuff. Kshama Sawant, economist and recently elected Socialist Seattle Congresswoman, was motivated to get into politics when she saw disparities in the US that mirrored her native Mumbai region. If poor people in the US have refrigerators, for example, it doesn’t really help when they can’t afford healthy stuff to put in them, or to pay the electric bill, etc.
Tax rates can be (and have been) much higher without causing capital flight. South Korea once punished such flight with death, apparently, but that’s beside the point. Also, wasn’t there recently the discovery that an Excel error, when corrected, discredited all those talking points about taxation stifling economic activity?
All this would be moot if workers (not the state) owned and ran the means of production.
Income inequality is a problem for several reasons:
Those in low income jobs are less motivated. No matter how hard they work, they will never get close to wealthy. Greater inequality reinforces this. When the top 1% are amassing excess millions and the working class is struggling to make ends meet, work becomes a discouraging grind. (It’s funny we always talk about the rich being motivated to earn more in relation to tax rates, but what about the poor’s motivation? If anything, productivity depends even more on a motivated, hard-working lower and middle class than it does on a hard-working upper class)
The excess wealth of the rich does not stimulate the economy as much as if it were spent. Yes, it’s good to have investors and savers, but overall increasing demand (money in the hands of those who will spend it) is better for an economy than to have large piles of money tied up in long-term investments.
The economy is further divided into segments where the poor aren’t even able to participate in modern living. This is happening already, to a degree, but it is going to keep getting worse as inequality increases. As the buying power shifts more and more to where only the upper class has actual disposable income, more and more businesses market exclusively to the rich. Concerts and sporting events, and even movies, used to be more affordable as standard family entertainment. Now it’s a major expense for most middle-class families. Flying on an airplane? Buying a new car? Forget about it. As the top 5% gets extremely wealthy, prices go up and the lower & middle class are left behind.
The correct word is neoliberal, neocon is different.
India has had socialism since its founding and that does not seem to have turned Bombay into a paradise. It is still unequal but instead of the problems of the poor being that they don’t have enough fresh vegetables to put into their refrigerator and becoming obese, the poor in India have problems squeezing large families into one room and trying to keep the kids from having diseases due to malnutrition.
Capital flight is not an all or nothing proposition, the higher the tax rates relative to other places the higher the amount of capital flight. When South Korea was a dictatorship it did place limits on capital flight, other nations such as Weimar Germany, and present day Argentina have also place harsh punishments on capital flight and have found that it is as effective as trying to cure pneumonia by outlawing coughing.
The only excel error I recall is the one that mildly changed the results of a study that linked debt to GDP ratios of over .9 with slower economic growth. The idea that taxes have effects on economic decisions is not new or controversial. The controversies are about how large the effects are and how the various effects interact.
You are correct that this would be moot if the workers owned the means of productions since all of us not in the gulags would be equally poor.