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georgeecollins
A great practical suggestion comes in the recent book: "The Second Estate" by Ray Madoff. It is an excellent analysis of the changes to tax policy in the US that have gotten us here. (Yes, I know this isn't just a US problem, but the US is the most important part.) One key suggestion is just to make transferring money into any trust (any!) a taxable event so that capital gains must be realized.
It sounds trivial but the effect to various tax evasion strategies is very important. It's also something that really ought to be uncontroversial. Read the book!
aidenn0
Using an asset as debt-collateral triggering gains being realized would be good too. As would unifying the income and capital gains tax.
I disagree with TFA's idea that a wealth tax is the best solution. IMO wealth is easier to hide than income, it's just that nobody bothers right now with there being no wealth tax.
tim333
The UK went through getting rid of that with the landed gentry at the start of the twentieth century. Mostly tax - income and inheritance. It requires the political will to vote in people who will do it though.
slibhb
Inequality isn't a big problem. Those who claim it is seem to think that the existence of really rich people causes the existence of really poor people. That is not the case.
It's natural that things are less equal now that we're not farmers or hunter-gatherers. Economies of scale will massively enrich those who take build them.
Sometimes it is claimed that inequality is a problem because the rich will control politics. But populism is surging and the rich seem to have a harder time controlling politics than ever, largely due to the disintegration of the print/tv media.
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stavros
I don't think anyone says that really poor people are caused by the existence of really rich people. The argument, as I understand it, is that spreading the wealth of billionaires around would mean fewer really poor people.
ponector
If all wealth of top 10 will be distributed equally it will add 5-10k per person. Will it make any difference in amount of pure people?
tardedmeme
Extreme power inequality seems to be the default state of human society. Power concentrates until it's maximally concentrated, then stays there. Power shakeups seem to usually replace one group of elites with another group of smaller or the same size.
Exceptions to this rule come about for specific reasons. Before the industrial revolution, there just wasn't that much power to go around. Everyone was working their land for sustenance, and the rent-seeking nobility extracted some percent of production because that's what there was to extract. When the industrial revolution came, those who figured out how to exploit it became the new nobility and worked their employees to the bone. It was only after actual, bloody, war between the factory owners and the employees that we got labor rights, which were a truce agreement. And that agreement's been steadily declining since Reagan. It took a while because the beneficiaries of the labor rights era were able to hold onto their wealth and pass it down to their children, but now we're back in the same factory feudalism situation again, but with different technological status.
harimau777
That sounds like the same observation that Thomas Jefferson made:
"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."
bryanrasmussen
generally the power shakeup that replaces an elite with another elite is one that replaces an old elite with a rising elite better able to take advantage of some economic conditions the old elite is ill-equipped to take advantage of
https://medium.com/luminasticity/the-new-exploiters-9d8a0684...
6AA4FD
Great works on this subject, to my mind refuting your nebulous thesis, include Debt by Graeber, Dawn of Everything by Graeber and Wengrow, and Mutual Aid by Kropotkin.
thrance
I think you'll find that any specific change in political directions come about from specific reasons (what would even be the alternative?).
joe_mamba
>Everyone was working their land for sustenance, and the rent-seeking nobility extracted some percent of production because that's what there was to extract
Until the black death came in the 1300's and killed an estimated 30–60% of Europe's population, and now the nobility had nobody to rent seek or even to work their land.
So then, for the first time ever, the surviving workers gained bargaining power as landowners (lords) competed for labor, leading to high cash wages, better working conditions, and more freedom for peasants, because the feudal lords hadn't yet figured out how to replace the peasants with slaves, H1-Bs and illegals from across the planet.
So according to history, including your post-WW1 example, the only times peasants gained bargaining power was when millions of them died through world wars and global pestilence.
Looking at recent unfolding history, "There's something very familiar about all this" -Biff Tannen
readthenotes1
I don't know why you're down voted. Perhaps the observation that inequality is often and the noble savage utopian dream of "all pigs are equal" is not the norm is too a bitter pill to swallow
verall
I believe it's because in many cases, the unspoken follow on to "inequality is the norm" is "and so it's useless (or actively harmful) to try to defy that norm."
Not that above commentator is meaning that.
But many "thought leaders" i.e. Jordan Petersen play around with similar motte-and-bailey - "hierarchies are natural" (examples with lobsters, apes, whatever) --> "existing hierarchies should be preserved" (not defended in the argument but implied).
Probably some downvoters are reacting to the structural similarity, although taken in good faith i think above commenter makes a fine point about the historical pattern of periods of equality being short lived and brought about by great intentional effort while sliding back to inequality seems to occur all of the time.
goatlover
We do need to include the vast human pre-history when makings sweeping claims about the natural state of human society. There might be something about civilizations that concentrate power which wasn't seen nearly as much among hunter-gatherer groups. If so, there might be steps that can be taken to counter it (indeed the past several centuries would strongly suggest so).
_ink_
What are these practical ways to solve it? And who do you think will implement them? Especially when Billionaires control the opinions of a big chunk of the population.
roxolotl
You can read about the transition from the Gilded Age to The Progressive Era in US history for potential solutions. Anti-trust and political reform is a bit part. Political opinions were controlled undemocratically during that period as well through political machines. Direct election of senators, direct primaries, women’s suffrage were enacted to help with that.
pocksuppet
Any political solution (as in voting, bills, laws) will have to start with getting political power. You can't do politics without political power.
ethanwillis
And when these things aren't possible?
nervysnail
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idle_zealot
If you have a vanguard with special privileges then congrats, you've replaced the inequality of Capitalism with another inequality. This is the exact challenge GP is talking about; it's hard to avoid the tendency for power to accumulate.
nervysnail
What about the quantity of the inequality? If our equality at the moment is 1 to 60, certainly 1 to 6 is better, no?
I cannot see a way out other than socialism, unfortunately.
Why unfortunately? Because under current conditions a revolution seems very unlikely, and if you really decide to become a socialist, committed and organized, you risk a lot.
You risk imprisonment, getting beaten by the police, going to prison for quite some time. And by investing your time and energy studying Marxist theory, Lenin, matters regarding the unique material conditions of the country you are revolting in, you risk your 'field', by field I mean you risk your occupation or profession. For example, you are a biologist, and you can't see a way out of this capitalist predicament, and feel a strong responsibility towards the world, you are now robbed of your time because you have to study socialist theory.
The other person in your field is indifferent (not a moral judgment) about politics, and will outperform you.
Muromec
... was an ideology that gave 200 million of people universal healthcare, universal childcare, public housing and increased luteracy rates but took away democracy and national self determination, unleashed genocide and allied with literal Hitler
sophacles
Most ideologies are terrible in those regards. The various forms of democratic capitalism have been pretty big on genocide and oppression too. Most of them were were pretty unconcerned with Hitler until after the marxist-leninists were already fighting him.
Not sure what point you're trying to make.
nervysnail
How did it take away national self-determination exactly? The Soviet model regarding self-determination was definitely better than what any other nation had. I probably don't have to mention that Lenin wrote a whole book on national self-determination, defending the right to self-determination on the condition that it does not harm the socialist project.
Although one may call it superficial, a mere formality no indicator of self-determination in the Republic, it is remarkable that the Soviet ruble had 15 local languages printed on the banknote.
pitaj
My hot take is that wealth inequality is the least bad problem we could have, if it is even a problem at all.
What people are actually experiencing is not wealth inequality, but cost disease. Vital things (housing, healthcare, education) are more expensive - and that's mostly the fault of state action.
UncleMeat
More than one million people die of TB annually, a disease that has an inexpensive treatment.
That’s not cost disease. That is wealth inequality killing people.
BobbyJo
Two things:
1) You have to get it out of your head that it is enough when everyone has X standard of living. It isn't. It's enough when less than a critical threshold of the population is dissatisfied, and that dissatisfaction can come no matter what the median/lowest standard of living is. This is just how societies work, uniformly.
2) Money is a ledger supported by a social contract. Spending wealth in ways that erode the social contract is bad. I think we can all agree 500M dollar yachts, empty luxury apartment buildings, and buying up shorelines in populated areas are all bad looks, and therefore, erode the social contract. The wealthy really need to step in and police each other socially here, if they want to continue being wealthy.
suttontom
How do you run a society based on who is dissatisfied? It seems reasonable to say that, even though there's a massive wealth gap, if the poorest are healthier, wealthier, and generally better off than they were a generation ago (that might not be true though with this current generation, who it seems may die earlier than their parents did), then changing laws because those people are "dissatisfied" seems kind of arbitrary, because dissatisfaction is kind of the human condition.
gazebo2
But that state action is the direct result of wealth's influence over the state and how it operates
inglor_cz
Two of the three (housing and education) don't seem to be caused by that.
Neither restrictive zoning, nor the administrative bloat in academia that caused tuition to skyrocket, were lobbied into existence by people like Bezos and Musk. They are result of tireless lobbying of relatively unimportant people seeking their own little rent.
rconti
I'm not well-versed in "cost disease", but yes, standards go up. Cars have to have airbags and backup cameras and infernal electronic nannies. So an (alleged) increase in safety has been mandated, and the costs are obligatory. IOW, your risk of dying in a car goes down, but it doesn't come for free.
Medical care is getting better, insurance is required to pay for more and more things, but that drives up insurance costs.
In my county, fire sprinklers are required in all new houses.
Costs go up, but at least, in theory, you're getting something in return.
You're welcome to blame the state. Without those actions, things would be somewhat more affordable. But it seems pretty clear from the data on inequality that inequality is a much bigger factor in bidding up living costs than the fact that I need to install sprinklers in my house, even if sprinklers are a very large cost relative to my income.
goatlover
Politically wealth inequality is a problem as the wealthy have more means available to them to influence votes, candidates and appointments. So you have a society that's partly democratic but with a lot of unequal influence at the top.
lovich
> if it is even a problem at all.
One of the pillars of capitalism is that the entire economy is more efficient when decision making power is dispersed as close as possible to the people making economic decisions aka what they buy.
When we have ended up in a situation where a handful of people are making all the economic decisions because they have all the money, there is no functional difference between that situation and a command economy.
If you’re a believer in capitalism as a tool to eliminate scarcity you should view the existence of billionaires(adjust for inflation) over the longer term as policy failures that are eroding capitalisms ability to create more and more.
JuniperMesos
> As a resident of a wealthy West-Coast New-World city, the effects of pathological inequality are in my face every day: Bentleys gleaming on the road, ragged people huddled in the rain cadging cash outside the drugstores, thousands homeless.
I also live in a wealthy West-Coast New-World city, and attributing these phenomena to pathological inequality badly misdiagnoses the problem. Most visibly homeless people in wealthy west coast cities are severely mentally ill in ways that prevent them from living a normal life or even living peacefully with other people without some kind of institutionalization, which local authorities are reluctant to do because there's no nice way to institutionalize people.
In some places, it's possible for people with a moderate amount of dsyfunction to be able to scrape together enough resources in order to rent cheap, low-quality housing; but in wealthy west coast cities there is a massive housing shortage that is downstream of decades of underbuilding, so all types of housing are very expensive. The underbuilding was and is mostly driven by large numbers of middle-class homeowners who primarily care about the negative externalities of construction and density affecting the place where they live and own their own homes.
Neither of these problems has much to do with extremely wealthy people, or wealth inequality in a general sense.
timbray
I'm highly unconvinced of the proposition that most homeless are severely mentally ill; the data I've seen doesn't support it. That's some of it, and also addiction. But a lot of them just can't make the rent.
Agree on the underbuilding.
xboxnolifes
As an anecdote, two people in my family have been or are homeless (don't know their current situation) entirely because they are incapable of continually making basic, smart financial decisions. At the level of "I decided to just not show up to work today" or "I spent my entire week's pay on a new toy". They both received enormous financial and social support from various people in the family, but always eventually just end up spending all their money somehow, or they get fired, or even just quit their job(!). Both eventually ran away from the responsibilities they built up into a different state.
I don't know if we should call this inability to make basic, smart financial decisions a mental illness or not, but it's something. And these 2 people aren't/weren't even what I would consider visibly homeless. At least as long as you didn't see them living in their car behind a convenience store.
Starting with the framing that housing is just too expensive makes the problem simple. You build more housing, or you subsidize housing for these people, or somehow just inject money into services for them so they can get back on their feet. But if that's not the core issue for some or many of these people, how do you actually help these people? How does a society help people who are incapable of handling their own finances? That's where the hard questions begin.
amanaplanacanal
I doubt we will get to the end cause of all the issues in a conversation here, but my understanding is that getting people whatever kind of help they need is vastly easier if they have a roof over their head and a permanent address.
slibhb
Most homeless people aren't mentally ill. But those "huddling in the rain" mostly are, or are at least addicts.
Non-mentally I'll homeless people are rarely "street people". They live in a car or with friends or in a shelter. Plenty of them have jobs.
pstuart
A lot of the young ones are either escaping sexual abuse, thrown out by their family for their sexuality or rejection of religion, or aged out of foster care.
There is indeed a spectrum of homelessness from temporarily distressed to broken beyond repair. There's different actions for the different factions.
I live in the Portland OR metro and believe that the issue has spawned the Homeless Industrial Complex that thrives on extracting money to "help" but are incentivized to keep the problem going for their livelihood.
I'm not unsympathetic to their plight (I had been effectively homeless a couple times in my life). It bothers me to no end how this problem is mismanaged.
tbrownaw
There is a difference between "most homeless" (your comment) and "most visibly homeless" (comment you're replying to).
IIRC, most people who obtain "homeless" status only keep it for a short time, and don't live on the streets during that time.
You'll get very different statistics if you count transitions into (or out of) homelessness over some window, vs systematic point-in-time counts of current homeless status, vs point-in-time counts of people camping on the street, vs trying to measure QALYs.
Uhhrrr
This meta-analysis puts it at 67%: https://jamanetwork.com/journals/jamapsychiatry/fullarticle/...
What data have you seen which doesn't support it?
FireBeyond
One of the challenges here as an ex-paramedic in the PNW who has certainly seen their fair share of homeless is that several of the more prominent studies use HUD's definition of "severe mental illness" that is far more conservative than you or I would expect...
"Requiring hospitalization more than once a month, on multiple occasions in a year".
And that number, per HUD, is 22%.
If you want to look at "untreated mental illness" in the homeless, now you're above 50%.
jakefromstatecs
> If you want to look at "untreated mental illness" in the homeless, now you're above 50%.
But "untreated mental illness" isn't the same as "mental illness that requires institutionalization" which is what the OP is saying.
Additionally, a lot of mental illnesses can be reasonably managed with proper medication, and in my mind very, very few actually require institutionalization. But we as a country can't even get behind the idea of universal healthcare for non-homeless let alone homeless people. Somehow institutionalizing them seems more feasible or reasonable than just covering their medical care?.. I don't get it.
vondur
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aidenn0
Good thing that GP didn't say that most homeless are severely mentally ill.
metabagel
I think you're seeing a segment of the homeless population and assuming that it represents the whole. It's likely that you encounter homeless people in your daily life and don't recognize them as being homeless.
xboxnolifes
They specifically said visibly homeless.
BryantD
Even if it’s true that most unhoused people are mentally ill — and I agree with Tim’s reply — you have must consider causation versus correlation. Is an unhoused person dysfunctional because they were always that way and thus doomed to lose shelter, or are they dysfunctional because living on the streets is extremely damaging?
You see this question a lot when discussing drug usage among homeless. The percentages of addicts is undeniably high; we know this from point in time counts, for example. Some people take that as proof that homelessness is the fault of the homeless: they made the bad decision to take drugs, and that’s why they lost their jobs. But there’s also a lot of data showing that people are more likely to become addicted as a way to cope with street life.
And if, in fact, losing your home is something that can happen relatively easily in part because of wealth inequality, we’re right back to the original assertion.
Underbuilding is for sure another factor. It’s just not the only one.
JuniperMesos
I hear a lot of accounts of relatively-normal people who talk about one member of their family who is homeless and living on the streets because they stopped letting that family member live with them because they did things like violently attack children in their home, or steal money in order to buy drugs. So this makes me think that a lot of visibly homeless people were in fact dysfunctional before they became homeless.
And this is relevant for any institution at all that tries to house such people, including the state. If the state provides some kind of basic housing with electricity, what happens when the people living there rip wires out of the wall so they can sell the scrap for drug money (a major reason why most landlords don't want to rent to really poor people)? Will someone prevent them from doing that (i.e. institutionalization), or will the state itself evict that person from their housing and allow them to live as a homeless street person?
pseudohadamard
Friend of mine is in a situation like that, they live next to subsidised housing for people who'd otherwise be homeless and you really, really don't want to live there. It's a good week when armed police have to turn up less than once a week. They're actually quite an SJW so you know it's really bad when even they say "some people have to be made homeless".
100721
> Most visibly homeless people in wealthy west coast cities are severely mentally ill in ways that prevent them from living a normal life or even living peacefully with other people without some kind of institutionalization
Sources? This just sounds like cope from a wealthy individual who wants to feel better about not helping the problem.
deschutes
It's hard to find anyone that doesn't have some motivation in this problem. I won't claim any percentages because I do not know them and I would not trust them even if I did.
That said, my experience in a urban area on the west coast has given me many examples that support this notion that it's not just a housing problem. Indeed many of the local governments own attempts to house the unhoused fail in no small part because the unhoused create conditions incompatible with staying housed.
Furthermore there is a steady drip of examples in regional news that raise serious questions about the efficacy if not motivations of the judiciary, politicians, law enforcement and local beuracracies charged with addressing the problem.
I do believe that housing costs are a major part of the problem but I also believe that treating the population as if they have no obligations to society is a major and fatal mistake to the whole enterprise. For one the policy approach has invited contagion by not addressing the population of unhoused that cannot or will not uphold the most basic aspects of the social contract. For two, it turns away a large number of people that would otherwise be sympathetic to the cause.
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100721
> That said, my experience in an urban area on the west coast has given me many examples that support this notion that it's not just a housing problem.
You would know more about the situation in west coast cities better than myself, I’ll admit.
What I take issue with is how the anecdotes closely align with certain political talking points - it rings an alarm bell or two, and begs for more concrete sources. Personally, I couldn’t find any reliable sources saying one way or the other.
Anecdotes are highly susceptible to confirmation bias though, along with other biases. It’s one of the reasons propaganda is so effective: our preconceived notions influence how we see and interpret the world around us. This affects me too, I’m not immune to propaganda (2015 me thought the idea of a Trump presidency was “funny” because of the memes and I thought he had zero chance of winning, for example - don’t worry, I’m not American so no votes were cast!)
I appreciate you taking the time to respond with such detail, and you seem to be writing in good faith, but I think this issue is a lot more nuanced than (paraphrasing - not trying to directly attribute a quote to you) “the homeless in west coast cities are there because they cannot function normally in society”.
It’s a sensitive topic for me personally because my family was one of those “sheltered homeless” families for a few years when I was still single-digits of age, and growing up in severe poverty I also met many other homeless people. I can guarantee you, if wealth inequality were not so severe then many people wouldn’t have fallen into drugs and mental health crises to begin with.
Many folks see it as a “chicken or egg” problem, when really, we all know that struggling to make ends meet and being evicted is highly stressful and traumatic. Wealth inequality is the root of many of these tragic stories, and it’s unfair to label everyone in that position as if they’re fully to blame for their situation in life.
But, again, I’m not American and my culture is much more socialist and cooperative. So maybe the unhoused in America truly do fit your descriptions, and I simply have no idea what I’m talking about. :P
In any case, thank you for your thoughtful and insightful replies.
themafia
> Most visibly homeless people in wealthy west coast cities are severely mentally ill
Is that _why_ they're homeless? And are you aware of "drug induced schizophrenia?"
> which local authorities are reluctant to do because there's no nice way to institutionalize people.
There are no _cheap_ ways to do it. There are _tons_ of nice ways to do it.
> so all types of housing are very expensive.
And you're speaking of an area that has weather patterns that are conducive to living outside.
> Neither of these problems has much to do with extremely wealthy people, or wealth inequality in a general sense.
Immediately? No. Proximally? Yes. Obviously.
jimbob45
At some point, it’s not a shortage. Everyone naturally wants to live in the best city on earth but expecting one city to house 8 billion people is silly. It’s okay to admit that some cities are at their natural reasonable capacity.
amanaplanacanal
Aren't there cities bigger than that though? What causes the capacity limit you are taking about?
yabones
For the vast majority of human civilization, all taxes were based on wealth. Your emperor, pharaoh, czar, or whoever was in charge sent a dude around to take a bit of everybody's stuff. Not how much income they made but how much stuff they actually had. It's only been the last 120-ish years that the idea that wealth and income were totally different things as far as taxation is concerned emerged.
I think almost everybody would be better off if taxes were something like 1% of total assets rather than off the top of your income.
pie_flavor
This sounds completely made up. The medieval taxman has no idea how much gold you have squirreled away, and even finding everyone to tax them was hard enough. Most peasant taxes were based on productive land and observable yields thereof, and the rest were import/export duties. IE income and not wealth, because nobody was stupid enough to implement a negative growth rate until the 21st century (unless they were actively trying to loot holdings for redistribution, e.g. varlık vergisi)
nerdsniper
I think that could generally work domestically, as in, "I don't have anything to give you, I gave/lost it all to Bob...go get it from him". But it would need to be modified with a tax on any wealth leaving the country/jurisdiction, so I can't just make $1B and then send it all to my aunt in $COUNTRY / $STATE / $CITY with low/no wealth taxes and then claim that I don't have any wealth (unless there were sensible reciprocity agreements for tax revenue reapportionment).
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But I'm not sure if your historical claims are accurate. I believe a lot of taxes were a fraction of the expected yield of land, which is more complicated than just "taxing wealth vs. income". Yes, the taxes would go up if you owned more land, which sounds like a tax on wealth. But the imputed tax base would be based on historical yields (income) because the quality of the soil would vary (which also could be construed as a tax on wealth because higher quality soil meant land might be worth more per acre). It was also based on the weather during that growing season, if yields were down in that area then taxes would be lower that year, which sounds more like an income tax than a wealth tax.
You also said "its only been about 120 years since wealth and income were different":
The Christian tithe that became de jury under Charlemagne in 779 A.D. was a strict 10% tax on land yield each year (~income tax) but other empires and lords used fixed quotas (~wealth tax), and records exist that these could have brutal effects during years where weather resulted in lower yields.
There was the 600-year long sales tax on salt in France, which definitely wasn't a wealth tax: https://en.wikipedia.org/wiki/Gabelle
In 1899 the UK instituted a 10% levy on annual incomes over £200, with a graduated rate for incomes between £60 and £200. Income taxes had a hiatus from 1816-1842 but has been permanent since the "Income Tax Act of 1842".
The Mit'a (Inca Empire, Pre-1532) taxed individuals "time". Which I think most people would consider kind of an income tax - it's literally paid in labor. Adult men had to spend a certain number of days each year working on state projects - like building roads, farming state lands, or fighting in the army. They didn't have currency. Their economy was based on centralized planning, labor taxation (mit'a), and state redistribution of goods.
The Saladin Tithe taxed revenues at 10% in 1188.
thunky
> I think almost everybody would be better off if taxes were something like 1% of total assets rather than off the top of your income
No thanks. Any discussion about tax reform has to start with government spending otherwise it's not serious. Nobody wants to give away a slice of their net worth to pay for bullshit wars and ballrooms.
tyg13
> Nobody wants to give away a slice of their net worth to pay for bullshit wars and ballrooms.
The vast majority of people in America are already doing this, because their wealth is entirely derived from their income. Your complaint isn't relevant to the discussion of wealth vs income taxes.
thunky
> The vast majority of people in America are already doing this, because their wealth is entirely derived from their income
Derived is not the same thing. Not even close.
Then why stop at 1%? Why not fork over half of your possessions to the government every year and let them spend it for you, if you trust them so much?
And by the way we already have a wealth tax. Its called inflation.
BrenBarn
> Any discussion about tax reform has to start with government spending otherwise it's not serious.
I'd say almost the reverse. What we need most in terms of "tax reform" is to move away from thinking about taxes as solely a means of funding government operations, and towards thinking about taxes as a way of directly redistributing wealth. That is, the revenues of a wealth tax could simply be given to the non-wealthy as direct payments (possibly in the form of refundable tax credits). Unavoidably there will be some overhead, but there doesn't need to be anything for the money to be "spent on"; it can just be straight-up given to different people than those who paid it.
thunky
Totally agree but its not the reverse of what I said, you're still talking about changing how the government spends money.
tekne
Obligatory land value tax mention
arzig
For the vast majority of human history, only the ultra wealthy had any money. And then, just as now, taxing only those people would not yield sufficient resources to fund the state.
The problem is, and always will be, what happens to me is I am out of work. No one wants to force people to liquidate assets they might need to work, live, etc in order to pay an asset tax.
Then you get to the dividing line of, but what about the ultra wealthy? Well, sure, but then you write an insanely obtuse tax code to try and capture that wealth while leaving everyone else alone and the targets are highly motivated to find loopholes.
Progressives intuitively understand that it’s not worth the hassle to try and means test entitlements yet seem to miss the fact that trying to manage a confiscatory bureaucracy would have the same issues.
shigawire
>trying to manage a confiscatory bureaucracy would have the same issues
It would be a cat and mouse game but that doesn't mean we shouldn't try. Like how funding the IRS appropriately increases government revenue.
arzig
Yes. And so we have the IRS whose enforcement measures fall disproportionately upon the disadvantaged and which is the only law enforcement agency permitted to open proceedings against citizens without evidence of wrong doing. I would hold this up as the archetypal bad example.
themafia
We have property tax, sales tax and inheritance tax.
We also have mountains of loopholes through all of these.
If you can afford a tax attourney your outcomes will be far better than those who cannot.
adabyron
A lot of the loopholes are really simple. You don't need a sophisticated tax scheme, just enough money to do the simple ones.
noitpmeder
How about we just get rid of all the fucking loopholes
tantaman
Increased taxation would be defensible if it was paired with spending reform. Increasing the tax to just inflate a bureaucracy helps nobody. Increasing the tax and then directly paying people, with no PMC in the middle, seems win-win-win.
BrenBarn
We don't need to use the tax on government bureaucracy. We can just give it right back out as direct payments to the non-wealthy.
webdood90
> Increasing the tax to just inflate a bureaucracy helps nobody
Bureaucracy = jobs, at least. I'd rather that than having it concentrated at the top.
wrqvrwvq
I don't think just paying people will make any difference at all. Most of the chronically poor in US at least have underlying problems such as addiction, schizophrenia or other affective disorders. Most chronically homeless people have turned down multiple state subsidized living options or have been booted from them for anti-social behavior. Studies routinely show that 30-40% of food stamps are sold for pennies on the dollar to pay for drugs or other unnecessary things.
The other major issue with "free money" is that it is purely inflationary, unlike wages which offset most of their price pressure by providing a commensurate amount of goods/services. When you hand everyone a million dollars the price of everything just goes up, both because there's a flood of money and because there's even less incentive to produce something to buy with it.
I think there's any compassionate argument to be made for helping the indigent, but easy ideas like "taking money from job creators and value producers to pay for needles and degeneracy" are never going to work at all.
It's a bit of a trope to say that billionaires are hoarding wealth via financial shenanigans when all of their wealth is tied up in job and value creation.
The us govt wastes by some estimates 30% of its budget. Trillions annually. Have to start with the waste and fraud. Empty daycares are not a good use of hard-earned tax dollars and have a massively pernicious effect on the society. They're not taking care of kids or paying teachers. Just pure inflationary greed.
tyg13
> The us govt wastes by some estimates 30% of its budget. Trillions annually. Have to start with the waste and fraud. Empty daycares are not a good use of hard-earned tax dollars and have a massively pernicious effect on the society. They're not taking care of kids or paying teachers. Just pure inflationary greed.
Much can be said about the problem of government waste, and it certainly is a problem, but there's an underlying assumption in this kind of talk, which I'd like to attack. That assumption is: "people are poor because the government taxes them too much, and wastes their money". Republicans in the US run and win on this platform again and again.
The problem is that it's simply not true. Government wealth has been falling for decades[0] -- nations are increasingly rich, but governments are increasingly poor. I don't even need to include a source that shows effective tax rates have been falling for the same period (no surprise -- that's _why_ governments are so relatively poor). As nations have continued to get richer, most of that wealth has been concentrated in the hands of an increasingly small group of private individuals.
Governments are not sequestering your wealth -- rich people are.
pstuart
Waste happens any time people are spending other people's money (and it happens in corporate land all the time too).
Any time people bring up concerns about fraud and waste in social problems only, I dismiss them out of hand as using that fear to justify their selfishness.
If one isn't calling out waste and abuse in their favorite programs too, then their concern is insincere and should be treated as such. Pro tip: audit the DOD.
timbray
I'd like to see a few links to support your assertions in the first paragraph because, with respect, I have not seen evidence which supports them.
On the other hand, multiple jurisdictions have run trials of UBI (universal basic income) and unless I misread the reportage, the results have been good.
metabagel
> Studies routinely show that 30-40% of food stamps are sold for pennies on the dollar to pay for drugs or other unnecessary things.
There are zero studies which show this.
denkmoon
> Most of the chronically poor in US at least have underlying problems such as addiction, schizophrenia or other affective disorders. Most chronically homeless people have turned down multiple state subsidized living options or have been booted from them for anti-social behavior. Studies routinely show that 30-40% of food stamps are sold for pennies on the dollar to pay for drugs or other unnecessary things.
Completely unsubstantiated FUD. The underlying problem is the structure of the economic system they reside in.
youngtaff
> The other major issue with "free money" is that it is purely inflationary,
Free money as in quantitative easing that overwhelmingly benefited the wealthy?
NickC25
>It's a bit of a trope to say that billionaires are hoarding wealth via financial shenanigans when all of their wealth is tied up in job and value creation.
Value for whom?
webdood90
Why do people stan for billionaires? I don't get it - what motivates you to say this stuff?
Most of what you said is greatly exaggerated or simply not true. It's like you cherry picked Fox News talking points.
shigawire
Because they've been propagandized and don't have the time or inclination to think differently.
ThrowawayR2
You're on a site created by a VC fund for startups and startup employees and you are surprised that its inhabitants are in favor of wealth accumulation and capitalism? Don't shoot the messenger; I'm just pointing out the obvious.
lc9er
[dead]
idle_zealot
Ideally you'd spend the taxes on things that help people, but I would argue that even simply destroying the taxed wealth would be an improvement over what we have now, if only in that it would counter wealth/power disparity and enable democracy to work better. Allowing a subset of the population to accumulate power divorces their interests from the majority and represents the biggest threat to modern society.
It would be a huge waste though. We should probably spend it on food, education, and healthcare instead.
jandrewrogers
> destroying the taxed wealth
Wealth is farms, factories, skills, etc. How would destroying all that improve anyone's life?
Wealth isn't money. It exists independent of any currency you can use to give it notional value.
nullocator
I don't think I can personally farm a Yacht into existence, so not sure that holds water. Over the last several years the "value" of several of my skills has basically gone to zero as technology advanced, so I'm not sure that I buy in the modern era at least skills are a good indicator of wealth either, nor can I likely acquire a Yacht with pure skill alone.
I guess if I am a factory owner I could produce a Yacht, but as a humble employee I'd be unlikely to experience or enjoy the produced Yacht's of the factory, and it also seems like the factory owner would sell most of their produced Yacht's for money, not "farms, factories, skills"
tormeh
The government decides who is owed what material goods. This is known as property rights. The destruction in this case would be equivalent to transferring the ownership of some factories to the government, exchanging those factories for something flammable on the open market and then setting fire to said flammable things. It's obviously wasteful, but definitely possible, and it won't directly and measurably impact anyone's quality of life. Investor confidence in your country will nosedive, though.
idle_zealot
I guess I need to clarify that I don't support lighting farms on fire. Wealth is liquid, it's the abstract concept of who owns what, who has the right to compel behavior. A destructive tax is just one that doesn't have corresponding spending on the balance sheet. I'm also not even saying that's a good policy, just better than what we're doing now. There are trivial improvements, like spending it on paying off the national debt.
gazebo2
Wealth is also money actually -- people don't contribute farms to politicians campaigns
cdrnsf
Reversing Citizens United, publicly funding elections, installing a functional regulatory regime and equitable taxation would go a long way.
Perhaps we could also engage in less ill considered military adventurism as well? Causing a domestic affordability crisis as a distraction and a salve for one's ego seems like a bad idea.
jacquesm
You'll find half the voting population is aligned with the capital against that. So I don't think that will fly until the situation becomes quite dire.
pstuart
> until the situation becomes quite dire.
Ironically, it's already incredibly dire. People are stupid -- it's crazy making to watch this play out.
jacquesm
That's true, but not so dire that they are motivated to act, besides, they are too gullible to even properly register how far they've been duped to act against their own interests. I used to have some kind of delusion about how democracy was 'good enough' because of my implicit assumption that people on average were smart enough, educated enough and in general wise enough to realize when they're being played. That seems to have been a pretty serious mistake on my part.
cfst
Regarding the IMF report, is it actually harder to hide wealth than income, or is it that there are so few global taxes on wealth that nobody's currently bothering to hide it? It seems like income, being a continuous series of transactions, would be the more difficult of the two.
Muromec
Fun fact: when there was meaningful data on Ukraine, it was number 1 in the world by wealth inequality and at the same time had the best score at income equality.
Likelt has to do with not having any property or wealth taxes, but having modest incone taxes that were rigorosly collected
tardedmeme
I bet that both are fairly easy to hide, but some forms aren't. It's hard to hide when money arrives in your bank account and it's hard to hide that you own 51% of Tesla shares. You can do either one of those through a proxy however, which makes it harder to track down, not impossible (why does 51% of Tesla shareholding always agree with this guy? Why's he shilling Offshore Panama Corp LLC products so hard?)
nerdsniper
I think it varies - each are easier/harder to hide in different ways at different scales. It's the "convicting Al Capone for tax evasion" thing. They didn't need to prove where his income came from, they could just show that his wealth was clearly higher than his declared income could have possibly yielded.
floatrock
Revenue transactions and taxable income are two very different topics.
Your accountant can clarify the difference.
w10-1
OK, sure, tax wealth of the rich -- if you can somehow outdo their self-interested political action. Even the most extreme viable wealth taxes proposals target ~2%.
My question is really the economic efficiency of their other 98%, which is becoming about half of available resources.
I suspect the evidence would show their investment gains are less from productivity and more from coordinated extractions, and that there are severe limitations that come from consolidated decision-making (after all, the premise behind the market is that the collective is smarter than the king). Not to mention that buckets of money probably are also alienating and defeat healthy self-discipline, particularly for the next generation.
I would love instead to find that new money seeks and creates new opportunities, particularly those that are beyond what you can convince collectives to do.
It's pretty obvious that ants threatening elephants won't go far, but (to abuse the analogy) I suspect elephants would take helpful hints. Expanding wealth inequality should make it easier for great ideas to take off, so perhaps that's a better focus.
teyc
A fairer way would be requiring all excess profits be invested in hard assets like factories, infrastructure etc. capital should be forced into competition and create excess capacity.
metabagel
This was one of the effects of the 90% rate for the highest tax bracket. It incentivized reinvesting money into the economy, rather than taking profits.
tmsh
I agree with this. I think the point that's often missed about taxing the ultra-wealthy is it incentivizes them to work through people more instead of doing it all themselves. This is a good incentive.
E.g., if I have no noticeable tax on my wealth as I create impact for the world through my companies I'm going to keep being the one person in charge of that (to achieve my mission of reaching mars, etc.). But if I'm going to get nicked (to the tune of billions of dollars even at 2% etc), on average I'm going to redeploy my assets via people I trust in the company etc. I might even invest more in public welfare projects. It is fair arguably that there is this forcing function because one's value accrues from those projects originally. So there is an elegant symmetry at the end too.
It would be unfair to tax billionaires more if they truly worked in a vacuum and provided value to the economy through very few dependencies. But that's never the case. And right now too much excess is spent on things like these sport teams via inherited wealth etc.
masfuerte
I'm very surprised that Tim Bray isn't part of the richest 0.1%.
empthought
He absolutely is.
6AA4FD
We are playing with two sets of dice, I realize mine are weighted and rolling higher than yours. Do I A- offer to switch dice B- not say anything C- offer to share D- decide not to play?
Gathering6678
The seemingly lack of any source for the first illustration (share of wealth) troubles me...
nickvec
It is taken from the linked “Distribution of wealth” Wikipedia article with a corresponding source. https://en.wikipedia.org/wiki/Distribution_of_wealth#Wealth_...
demorro
Y'all can say violence isn't the answer all you like, but not addressing this will cause violence. Mass, misguided, idiotic violence of the like few of us can imagine.
Either we make significant change whilst we still have some capacity to reason, or we consign ourselves to the fate of animals, following our impulse gradients to the places they invariably lead.
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Yeah I'm glad somebody's talking about it. Wealth inequality seems like it will be THE defining issue of our lives (accelerated drastically by AI).
I think there are many practical ways to solve it, and would love to see more proposals out there. Instead I tend to see nihilism or division.