I say let the rich keep what they earn, and never mind whether or not they “earn” it in any meaningful sense. That’s part of capitalism, positioning yourself to get paid.
The trick is to give everybody a fair starting position. I say everybody loses custody of their kids at age 13 and they are all drafted to do 4 years of combined social service / military service / education, after which they are given an equal and reasonable amount of startup money, and their parents and other relatives are prohibited from helping them out.
And when you die, everything you don’t take with you reverts to the state.
I respect the tenacity with which you cling to your ideals, but I honestly believe you are tragically misguided.
You speak of the “redistribution” of wealth, but that is a fallacy. As someone else pointed out, wealth is created by a a vibrant economy. By limiting the motivation for working hard, you do not redistribute existing wealth, you limit the production of new wealth.
How can you possibly back up a statement like that? It is certainly not true today, and even LESS SO in your thought world. What the end result of your utopia would be is that the top talent would rise the top, and then effectively be siphoned off to be replaced at the bottom with ever less effective people. The total production and efficiency would fall, as the smartest and hardest working people “Take leisury vacations in some sunny place and enjoy [their] 5 million dollars/year”
You also wrote
So basically what you are saying is that someone (the state?) will decide where workers are needed regardless of people’s inclination or desire. Follow your point to its logical conclusion: people who work in “luxury” industries will all be out of jobs, and be forced to find work in a field deemed more socially acceptable (to who, you?) Gee that sounds positiviely idyllic…
Also who is going to spend that money for “better” things? Joe Average? I doubt it. The state naturally, which blows up your argument that the state wouldn’t own and control everything.
For a real world example, read about the US luxury yacht industry:
So I suppose your solution would be to confiscate more money then compel those unemployed shipwrights to go out and distribute AIDS medication to the poor?
For the love of everything, please stay in France.
I was expecting this argument. The problem is that the rich also waste their money on junk food, cigarettes and alcohol (thougn perhaps not on lottery tickets…more surely in casinos).
But on the overal, a way larger part of their income is spent by the poors on needed goods than on luxuries, for obvious reasons.
Do I really need to give a cite to convinve you that poor people spend a larger %age of their income on food or lodging than rich people?
If the suggestion in the OP did in fact become the law, would it exist in a vacuum? I’m asking, because I’m picturing this making things worse for the lower class than better. If the law is enacted, but there are no laws also created that a. limit what companies can charge for good and b. limit who companies can hire, what’s to stop a CEO from hiring his children (say they’re between 14 and 17, old enough to get working papers yet still minors) and give them each a 5 million salary, which he’d still have control over? It doesn’t have to be minor children, because there are a lot of people who might be complecent enough to sign over, unoffically of course so he couldn’t be taken to court, control of most of their salary to him (perhaps he takes advantage of people in group homes, or other people down on their luck) and as long as the money was kept in their names, it wouldn’t be his income and taxable right? I’m supposing that there would be a way to access their money through intimidation rather than power of atorney, if he was attracted to shady dealings. What I’m getting at is that the 5 million earnings wouldn’t have the effect of reducing how much goods cost if there were ways around limiting a company’s holdings. With no price freezes, there could be ways for the company to drastically increase their prices, if they spread the earnings around in a creative way, which would increase the hardships felt by the lower class, because it’s possible at some point even if they made their 5 million limit they’d still be poor because it now cost $2,000 for a loaf of bread from the company’s whose CEO had 15,000 people working for him who’d let him use “their” money as he pleased.
No need for thugs. The IRS already kick open doors and tear open mattresses to make sure you don’t earn more than what you’re stating on your forms. If you don’t feel you’re already living in a dictatorship, then it wouldn’t change a thing.
The problem is that I believe the concentration of wealth in some people’s hand do limit the ability of other people to work hard and expect to earn a spot under the sun.
Also, honestly, how many people will think : “Im not going to get an education and work hard since at best i’ll be able to make a pittance like 5 millions $/year. That’s just not worth it. I’m going to stay on welfare”
Finally, having a vibrant economy producing a lot of wealth is fine and good. But if the wealth produced is kept but a very limited number of happy few (and on the overall it seems to be the case in the US, where the distributionof wealth is very inequal) or even worst, result in a net transfer of wealth from the poorest to the wealthiest, it shouldn’t be exactly the most urgent priority of the collectivity.
You’re making two assumptions :
1)That the brightest/more efficient people are the ones making the most money. But it’s quite obvious that the CEOs make a lot (a very big lot) of money, even when they turn to be a total failure. Check benefits given to CEOs who led a corporation down the toilets, I’m not convinced that talent.
2)That these persons are irreplacable. There are CEOs and movie stars dying each year, and quite surprinsingly, other people manage to take their place and the world doesn’t collapse.
Once again, I think it’s much more of an incentive to offer the opportunity to make 10 000 to 500 poor people than to offer the opportunity to make 5 millions to only one rich person. And I believe that a too inequal distribution of wealth strongly restrict the ability of a large number of otherwise talented people (less opportunities to get an education, lessened abitility to concurrence the “big guys” who keep a firm hand on the market, diminished ability to influence the “rules of the game” in their favor, contrarily to people who can afford to use lobbying and personnal influence, etc… I could even add corruption to the list)
Absolutely not. People will decide where workers are needed by deciding what kind of goods they want to buy. I’m not sure how you came to such a conclusion. But with a better distribution of wealth, very likely, people will buy more houses and less diamond necklaces. The only difference if that the decision will be dependant on the inclinations ans desires of a large number of people instead of a more limited number of “happy few”. Your argument is a straw man.
If you dislike the concept that workers in a given industry can lose their jobs and have to search anither one when people don’t want to buy anymore what this industry produce, you should rethink your support to the capitalist system. It happens all the time.
Why would it be the state? Redistributing money means that money will be in the pocket of other people (Joe average) not in the pocket of the state. You’re making a straw man, once again.
Read my answer above. It happens all the time in a capitalist system. I’ve no particular reason to shed more tears about the fate of workers in the luxury yacht industry than about the fate of little farmers or workers of the steel industry. And the money not spent on luxury yachts is spent on other things which provide jobs too. Honnestly, if 10 people lose their jobs in the yacht producing industry and 10 people get a job in the pharmaceutical industry, I don’t see where the issue. But if 5000 people can afford AIDS drugs and one person can’t afford anymore a yacht, I clearly perceive the advantage.
Don’t be affraid. I certainly don’t intend to settle in the US
RD:That rate of 70% was meant to be temporary when it had been enacted, during the second World War to cover war costs. So I wouldn’t characterize the elimination of that rate as Reagan “throwing a party for the rich”. He was just putting the rate back where it was supposed to return to during peacetime.
Um, Rex, I think you missed my post on the first page where I pointed out that the top tax rate in 1936 was 78% and the post-wartime top rate throughout the 1950’s (and up till 1963) was over 90%. In the 1960’s the rate was cut back down to under 80%, and stayed around 70% till 1980.
We may dispute what an appropriate top marginal tax rate for peacetime ought to be, but I don’t think the facts support your claim that 70% was widely viewed only as a temporary wartime and post-war maximum. That temporary maximum was in fact more like 90%.
racekarl:My cite for the Harvard endowment numbers is from the Dec 3 Boston Globe, and references the 2001-2002 fiscal year numbers. The article is now only available online for a fee, but here is an extract: “The top managers of Harvard University’s $17.6 billion endowment were richly rewarded for their performance in 2002, with three executives taking home more than $15 million each. The total endowment fell 0.5 percent, or about $88 million […]”
Thanks karl. As I pointed out before, if these same managers got paid a similar amount at Harvard in the previous year, when they seriously underperformed the average endowment fund manager by losing over 5% of their endowment when the average loss was 3.6%, then that rather undermines your suggestion that high pay is necessarily correlated to high performance.
If this was easily possible, then the same thing could be done in the current situation to avoid paying taxes. I suppose it could work to some extent (probably not by giving a 5 millions $ job to a 17 y.o., because the shareholders probably wouldn’t be very happy), but how are you going to give money to other people and then force them to use this money on your behalf? I’m sure some people already create schemes like that to limit the taxes they have to pay, so I don’t think it would make any difference.
Sure; But this would be a criminal action. “Keep this money and pretend it’s yours but let me use it or i’ll kill you” can certainly work, and probably is already done. But you certainly can face prosecution for soing so.
I’m not sure why this would result in an increase of prices. If currently a corporation can raise its prices to make more money, it will do so. This money will pay for the CEO benefits, or to the workers’ salaries, or will be reinvested, or will be given to the shareholders. Why would a corporation be suddenly more able or more willing to raise its prices just because the income of the CEO is capped
Your counter points to my post are almost entirely non sequiters IMO. All you have done is point out that you think I am making “assumptions” simply because they disagree with your own.
Yes, I DO assume that most highly compensated individuals are smarter/better/harder working than those that do not. On the other hand, you claim this cannot be true simply because it violates your assumption that all rich people are nefarious crooks who got there by diddling the system or screwing someone else.
If you want to use inductive reasoning, I would put the number of self-made, honorable millionaires against the number of crooked undeserving ones any day, and expect to win handily.
Your second point that I am hiding from the forces of capitalism because I lament the loss of jobs when an industry goes belly up is also untrue.
What I lament is when captialism is NOT allowed to work, and indistries are eliminated by fiat, not by lack of demand. You have clearly shown that you consider some industries unnecessary, and would like to see them eliminated by act of government.
I would not shed a tear if people simply decided that boats were no longer fashionable or desirable and stopped buying them. What I cannot tolerate is you or anyone else deciding that no one “deserves” a boat, and as a result forcibly reallocating the people that serve that industry elsewhere.
The happy world of people buying houses instead of diamonds you describe will not just magically appear under your system.
“People” cannot decide what goods to buy and where to work because in your system there is an intemediate stage where THE GOVERNMENT has all the money. How you can miss this step is beyond me. If I have a salary of $15 million, do you suppose that my neighbors are going to collect the 100% tax on the top $10 million? Of course not, the government will. So now how, exactly do my neighbors get their hands on that money? Keep in mind they have just lost their jobs in the industries where I would have previously spent it.
Sounds like they’ll have to go get another job… but where? Well, of course to solve this problem the government has built and owns a factory to build pre fabbed houses for people that need them.
You see where this is leading…
This is not a zero-sum game, wealth can go up AND down, which is another point you miss or ignore. If 10 people lose their jobs in the yacht building industry, why would it necessarily follow that 10 more would open up elsewhere? That is simply not true. In your confiscation scheme, those jobs are gone, period. Add 10 more names to the welfare rolls.
I also fail to see the link between yachts and AIDS drugs, unless the government steps in and makes it so.
Having said all that, I do agree with you that a very large income gap can create some of the problems you mentioned. However, your proposed soultion creates many more problems than the gap, in my opinion.
Kitsu:
Sorry, but at least for the Harvard example your point falls flat. Those managers made quite a bit more this year than last (from memory, as much as 75-100% more). What’s more, those managers’ compensation is tied quite directly to their performance (averaged over 3 years, IIRC) and in fact they are required to give back money if they perform poorly. I’m sorry I can no longer give you the link, but I assure you it is true.
rk:Those managers made quite a bit more this year than last (from memory, as much as 75-100% more). What’s more, those managers’ compensation is tied quite directly to their performance (averaged over 3 years, IIRC) and in fact they are required to give back money if they perform poorly. I’m sorry I can no longer give you the link, but I assure you it is true.
That’s okay, I believe you. Still, making even eight or nine million dollars for seriously underperforming one’s competitors is not much of an argument in favor of the idea that huge salaries are merely rewards bestowed by the laws of the market on exceptional ability and achievement.
Yes, I DO assume that most highly compensated individuals are smarter/better/harder working than those that do not.
That’s a classic “market fundamentalist” assumption, but it isn’t necessarily a fact.
You’d better back up that assertion that the rich lose more in casinos. Every study I’ve seen proves precisely the opposite. Take this one or this one for example.
emarkp:You’d better back up that assertion that the rich lose more in casinos.
I think perhaps clair was suggesting that the rich lose more money in casinos than on lottery tickets, not comparing the overall gambling losses of the rich with those of the poor.
:rolleyes:
Well shit…why not just have the government give people everything they need, take 100% in taxes and call it communism. Then we can all be poor together.
Besides, what does it matter? Give someone 10,000 and in a few years some will have zero, some will have about the same and some will turn it into a million .
They aren’t irreplacable but there are very few people who can effectively lead a multi-million/billion dollar corporation or draw millions of fans. Can you?
Why the blankety-blank not? This is really no different at all from what claire is saying, or what mssmith accused you of saying.
The ability of providing your children with a better life is one of the best possible reasons for trying to become rich.
You are basically saying a persons children are on the list of things they are not allowed to spend money on. This is even more outageous of a suggestion than the one that people not be allowed to buy boats.
Muad’Dib, you are confusing two different documents here. The Declaration of Independence advocated the inalienable rights to life, liberty and the pursuit of happiness.
In the Consitution, rights was changed to life, liberty and property.
The Constitution is the law of the land, not the Declaration. So in the end, you are right - your path was just a bit crooked.
What society do you live in where knowledge and application of the law serves no purpose? Is everyone in your sphere of reference completely versed in every aspect of every law that may affect them? Does everyone you know have the time to research laws and cases on an as-needed basis?
And regarding the OP: You can’t legislate the rich away. ‘Rich’ and ‘poor’ are just spaces to fill. If Bill Gates doesn’t occupy the top seat, then someone else will. Read this for more info.
[QUOTE]
*Originally posted by racekarl *
**Hmm this is going to take a while Claire
Not by fiat of the government. Because much less people would buy diamond necklaces if it represented an enormous part of their income.
If the diamond nacklace cost 6 million dollars and nobody earns more than 5 million dollars, it’s extremely likely that no 6 miliions $ diamond necklace will be sold. Call that magic if you want.
May I ask why anybody would want a 15 millions $ salary if everything above 5 millions is taxed at 100%? Just in order to piss off your boss and having him pay more for the sake of it? That’s why I ignored the intermediate stage.
Because the money don’t just dissapear in a cloud of smoke. If it is distributed in a different way, it’s only used by different persons for different purposes. If you don’t spend it on a yacht, someone else will spend it on something else. And this something else has to be produced by someone, like your yacht.
And actually, it would the same if it went to the government before being redistributed. And even if it was spent directly by the government. Your taxe’s money, when redistributed via welfare, it spent by people who buy things which are produced by someone who has a job. If the government build a road, it also creates jobs. It’s not like your dollars dissapeared as soon as they leave your pocket.
You mentionned AIDS and yachts in the post I was responding too. Make it houses and diamond necklaces if you prefer. The point is that less affluent people spend their money on things which are more necessary.
