> Also Vanderbilt and Carnegie existed during a time of much higher taxation
Cornelius Vanderbilt lived from 1794 to 1877, when there was no income tax; Andrew Carnegie lived in the US from 1848 to 1919, and he would only have paid income tax in the last six years of his life. Government receipts and expenditures were single-digit percent of GDP back then.
I do wish the wealthy of today were more familiar with the concept of noblesse oblige, and laud Carnegie's devotion to philanthropy, but you couldn't be more wrong with your statement that those people lived in a time of much higher taxation. On the contrary, American government of those times was very, very small, compared to the almost 40% of GDP that it is now.
> think about how Bill Gates hasn't written a line of code in 40 years
> Someone with a higher lifetime contribution to the company can be making less simply because Bill was there first.
Your engineering manager or CTO doesn't write code yet is paid more than you. There's value in directing labor and capital, and putting them together in a prudent way.
If Bill Gates wasn't there to be first, would there be a Microsoft that an employee would be contributing to? Risk and reward go hand in hand, and someone getting paid a handsome salary like clockwork is agreeing to take a small risk for a small slice of the output.
Henry Ford didn't toil away at the assembly line putting cars together; he came up with the whole idea and employed people to execute his vision, without which none of it would have existed to begin with. Seems like implicit to your argument is the idea that the capitalists are neither necessary nor sufficient to these great commercial successes, and it would have spontaneously erupted among the proletariat without them.
> Then you aren't looking hard enough.
OK, let me look harder. It's actually pretty hard, because the US is by most measures one of the richest countries in the world, even for the average person. For median disposable income per person (adjusted for purchasing power), the US tops the list; there is no country where the median person has more money to spend on what they choose to spend it on.
For another measure, look at the GDP (again, PPP) per capita; there are a handful (literally) of countries higher than the US -- Ireland, Luxembourg, Liechtenstein, Singapore, Qatar, Monaco, Macau, UAE, Bermuda, Switzerland, Isle of Man, and Norway. Most of them are some combination of a tiny tax haven or a petro-state, with Ireland, Singapore, and Switzerland being exceptions, all three of which have a lower government expenditure as a fraction of GDP than the US.
Ireland is famous for low corporate taxes; the average worker in Switzerland pays a lower tax rate than the average worker here; and Singapore is basically a tax haven, with no capital gains tax and low top tax rates, and a remarkably efficient government at only 15% of GDP (seriously, this is the best in the developed world).
Where is your evidence that higher taxation and more redistribution would lead to a better outcome for the median person in the US?
> Also Vanderbilt and Carnegie existed during a time of much higher taxation
My bad, I was under the impression that the corporate tax rate was higher in the 1910s->1920s
> Your engineering manager or CTO doesn't write code yet is paid more than you. There's value in directing labor and capital, and putting them together in a prudent way.
I think the main question is how much of this can be measured and what is it worth? Sure it has value but I personally don't think the value is quantitatively different in a way that justifies the huge pay difference between execs and laborers, nor qualitatively different in a way that makes CEO pay be in ownership. I think that these distinctions are more to enforce a class system. If the idea is that a CEO's performance is tied to share price, therefore they should be rewarded in shares, then why doesn't that logic extend to all workers?
> For another measure, look at the GDP (again, PPP) per capita
GDP per capita doesn't really mean much because of averaging, I will address the median though:
> For median disposable income per person (adjusted for purchasing power), the US tops the list
Disposable income is post-tax. I would like to see normalization where we take things like education, healthcare, housing, and childcare costs that are covered by social democracies and add that to their disposable income, or subtract it from ours. We could even factor in household debt. Even better would be to take that normalized score and divide it by working hours. There's also the question of personal freedoms, how much agency does an individual have in their workplace, in the home the own or rent, wrt healthcare, etc. There is more to qol than just having money to spend.
> Most of them are some combination of a tiny tax haven or a petro-state
I think that the US being the world's reserve currency affords us some sort of status akin to being a tax haven or petro state, no?
> Where is your evidence that higher taxation and more redistribution would lead to a better outcome for the median person in the US?
I think this is a bit of a loaded question. I think the median person is decently well-off in the US barring some medical catastrophe. I think the question should be how to improve the social mobility chances for those below the median. I can't be bothered to look them up now but there are plenty of studies where you can see the effects of social spending on the earning power and life outcomes of people. It's a pretty simple idea that if you give poor people access to the same education and networking opportunities as wealthy people, they will perform better. Anecdotally, I find it a lot easier to take risky career moves now that I have a safety net of savings under me than I did when I was making $12/hr.
Lastly I think you only need to look back as far as the 40s-60s under managerial capitalism to see the effects of higher taxation and more investment in productive sectors of the economy plus housing/schooling. I think most people here would agree that our current economy has been propped up by debt and currency manipulation.
I'm glad we had this productive exchange (and since this is the internet, I will explicitly state that I say this without sarcasm). I think you and I both agree with your point:
> I think the question should be how to improve the social mobility chances for those below the median
but we differ on the "how", as well as having a more (me) or less (you) optimistic view on the current state of things in the country.
Perhaps it's fair to say that you see income and wealth inequality as the proximate cause of what ails us, and an expanded role of government, funded through more progressive/redistributive taxation, as the best way to afford better chances for those most poorly off; whereas I see the worsening of the social fabric seen in the steep rise in single-parent households and increasing permissiveness towards behavior previously deemed sinful (such as drug use) as the proximate cause, and that bigger government will only ultimately hinder the ability of those most poorly off to help themselves.
You may be interested in Thomas Sowell's book, A Conflict of Visions, for a truly elegant analysis of this type of dichotomy.
Cornelius Vanderbilt lived from 1794 to 1877, when there was no income tax; Andrew Carnegie lived in the US from 1848 to 1919, and he would only have paid income tax in the last six years of his life. Government receipts and expenditures were single-digit percent of GDP back then.
I do wish the wealthy of today were more familiar with the concept of noblesse oblige, and laud Carnegie's devotion to philanthropy, but you couldn't be more wrong with your statement that those people lived in a time of much higher taxation. On the contrary, American government of those times was very, very small, compared to the almost 40% of GDP that it is now.
> think about how Bill Gates hasn't written a line of code in 40 years
> Someone with a higher lifetime contribution to the company can be making less simply because Bill was there first.
Your engineering manager or CTO doesn't write code yet is paid more than you. There's value in directing labor and capital, and putting them together in a prudent way.
If Bill Gates wasn't there to be first, would there be a Microsoft that an employee would be contributing to? Risk and reward go hand in hand, and someone getting paid a handsome salary like clockwork is agreeing to take a small risk for a small slice of the output.
Henry Ford didn't toil away at the assembly line putting cars together; he came up with the whole idea and employed people to execute his vision, without which none of it would have existed to begin with. Seems like implicit to your argument is the idea that the capitalists are neither necessary nor sufficient to these great commercial successes, and it would have spontaneously erupted among the proletariat without them.
> Then you aren't looking hard enough.
OK, let me look harder. It's actually pretty hard, because the US is by most measures one of the richest countries in the world, even for the average person. For median disposable income per person (adjusted for purchasing power), the US tops the list; there is no country where the median person has more money to spend on what they choose to spend it on.
For another measure, look at the GDP (again, PPP) per capita; there are a handful (literally) of countries higher than the US -- Ireland, Luxembourg, Liechtenstein, Singapore, Qatar, Monaco, Macau, UAE, Bermuda, Switzerland, Isle of Man, and Norway. Most of them are some combination of a tiny tax haven or a petro-state, with Ireland, Singapore, and Switzerland being exceptions, all three of which have a lower government expenditure as a fraction of GDP than the US.
Ireland is famous for low corporate taxes; the average worker in Switzerland pays a lower tax rate than the average worker here; and Singapore is basically a tax haven, with no capital gains tax and low top tax rates, and a remarkably efficient government at only 15% of GDP (seriously, this is the best in the developed world).
Where is your evidence that higher taxation and more redistribution would lead to a better outcome for the median person in the US?