Another reason this idea is so wrong-headed is that there can never be enough superrich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the median American, but we don't buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. Like everyone else, we go out to eat with friends and family only occasionally.
I can't buy enough of anything to make up for the fact that millions of unemployed and underemployed Americans can't buy any new clothes or cars or enjoy any meals out.
But you can invest... Your money isn't stuffed under your mattress, is it??
That's why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.
Are they really investments or are they just political favors that over-cost and under-deliver? (See the Department of Education, TARP, Medicare, war, etc.)
As long as we're keeping capitalism, I don't buy the argument that simply being rich is wrong. I'm also fairly skeptical of set limits on income, as setting those limits is very hard. What goes into it? How much money per year is the limit of a "Just" income? I don't think those questions have a definitive answer.
I think repealing the bush tax cuts is a good idea. I think we should keep the estate tax. I think the "buffet rule" isn't bad, but it's no solution. I just wonder when people will say it's enough. Rich people pay less tax today than they did a decade ago - but they're making massively more money as well. If we add all those taxes, and there's still a massive income imbalance, what then?
I think it's in everyone's interest to live in an equal society, for reasons that I don't want to get into right here. However, I'm dubious that can be achieved through targeting one social class or another. It seems like the American right is targeting the poor, while the left is targeting the wealthy. Everyone feels like a victim and just wants to keep what they have now. What a crappy situation.
Edit: I missed some words.
Yes, but they also own 70% of all the wealth, according to 2007 numbers (the percentage is almost certainly a little higher today), so that's perfectly proportional. If you own 70% of the wealth, you should pay 70% of the taxes.
Norway - with one of the highest tax rates & comprehensive welfare states on the planet - has higher rates of entrepreneurship than the USA does. http://blogs.reuters.com/felix-salmon/2011/01/20/norway-entr...
If you look at international entrepreneur rates, its pretty clear that there is no relationship between income tax rates and start-up activity (that's not to say that specific tax policies don't make a difference). http://www.internationalentrepreneurship.com/total-entrepren...
For every argument about high tax discouraging risky ventures, there is a counter-argument that high safety nets reduce the risk of start ups.
When people say things like this it reminds me of religious fundamentalists who claim that a world without belief in God would be some sort of anarchist murder-on-the-streets hellscape because people wouldn't have a reason to act morally or ethically anymore.
Not only is it incredibly pessimistic to believe either of these things, but you don't have to look far to see tons and tons of real-world examples that prove that the statement is completely ridiculous.
Sure, I'll buy the idea that taxing income discourages work (though its impact is far more muted than some people would like to suggest).
However, I've not yet seen any argument that taxing wealth itself discourages work or wealth creation. If anything, taxing wealth keeps people from sitting on their assets and doing mere "wealth preservation".
If I were a Ramen-profitable startup entrepreneur, I'd much rather be taxed at 2% of my net wealth than at 30% (or even 15%) of my capital gains. Indeed, if I were anyone who planned on leveraging my capital to actively create wealth (c.f. Elon Musk) I should much prefer wealth taxes over capital gains taxes.
If we live in a meritocracy then anyone with a lot of wealth should be able to relatively easily average >6% ROI year-over-year.
You do realize that if you make about $80K/year, you are already in the top 10% right? With that perspective, I feel that 70% of taxed income is absurdly low, the fact that 30% of all US tax dollars come from people making less than $80K/year is completely absurd to me.
Edit: According to your table, the number is actually: $112,124 I still think my point stands.
So half the population is making less than $32k/year. Yes, the top 10% and the top half of the population are taking on almost all of the income-tax burden.... because they (we, in my case) have almost all the income.
There's nothing fair about demanding tax money from people who are just plain poor. You tax the rich, because rich people have money.
Now, we could talk about distributing the tax burden "fairly" across the rich and the middle class, but that assumes we have large, broad middle class. Which we don't: making a "middle-class salary" like, say, $66,193/year already puts you on the border of the top 25% of the country.
And then notice that to get from the top 25% to the top 10%, you have to make almost twice as much money. Top 10% to top 5% isn't that large of an increase, but top 5% to top 1% requires more than doubling your income.
So, to be clear:
To go from median to top 25%, you need to roughly double your income. To go from 75th percentile to 90th percentile, you need to almost double your income. To go from 95th percentile to 99th percentile, you need to more-than-double your income. We're operating a tax system designed for a bell-curve income distribution when what we actually have is a power-law income distribution.
individual median income: $26,680/yr, single: $18,881/yr, married: $32,033/yr, divorced: $28,668/yr, widowed: $18,485/yr
Half the population is making less than $26,680.
Well said. I'd upvote more than once if I could.
Why is that worth noting? That only further demonstrates the income inequality in the United States. Furthermore, wealth is far more important to take into account than income in any discussion of taxation or inequality.
Also, I have yet to hear anyone make an argument that sounds anything like "simply being rich is wrong."
So is this the basic issue, then? That there's income inequality?
Because that's always going to be the case. Even in the most socialist nations, or even communist nations.
There is always a strong disparity of income and power. Always. And there always will be.
Secondly, assuming that the "inequality gap" is necessarily a bad thing, which I don't think anyone has shown...
Why do you assume that higher taxation will decrease the income inequality gap?
If anything, higher taxation means more money (ie power) in the hands of the government. More power in the hands of the government just leads to more crony capitalism that concentrates even more money and power into fewer hands. Worse, those companies that then have access to all that money and power are the worst sorts of companies that don't even need to provide good products and services to consumers. Instead they get more bang for the buck by sucking tax dollars out of the system.
Actually they have.
In face increasing Gini coefficient for 0.01 increases mortality in state for 122% after 12 years. Yes, it is a bad thing in almost all recorded metrics.
- First of all, doesn't anyone see the correlation between increased government power (revenue/spending)
Nope. I think revenue spending isn't really good metric of government power and so far no one has proved that. You are free to test your hypothesis though. I'd wager that there is quite a bit of income inequality if your gov. revenue is low but they spend a lot of money.
I found the youtube to be more compelling than the OSU study. The OSU study contradicted lots of other studies that found nothing conclusive for nearly the same hypothesis. The author of the study managed to fit a curve that he was apparently looking for by allowing for enormous flexibility on the time axis. That's like finding pictures in clouds. You can see what you want to see if you look at something from enough angles. To be meaningful, you would need to apply those findings to lots of other data sets to see if you're just seeing what you want to see or if there's a real likelihood of a pattern. Science isn't finding one occurrence of something that you were looking for. Science is predicting where and how you'll find something and then having others find you're right over and over.
On the Youtube lecture: The statistics seem to show correlation, but causation? Is the inequality the cause of a lack of trust? Or is it the other way around? Furthermore, I saw lots of other correlations in the data they showed. Graph homogeneity of the population's ethnical background vs trust. Look at the states and countries that scored high trust. At a glance, they seemed to be the highly ethnically/religiously/culturally unified ones.
> Nope. I think revenue spending isn't really good metric of government power
Okay, what would you suggest... Watts?
> I'd wager that there is quite a bit of income inequality if your gov. revenue is low but they spend a lot of money.
Wait, your conjecture agrees with me. Spending is high and inequality is high. The gov. revenue is almost a non-factor in terms of government power. For the part of the curve where the currency hasn't been completely devalued because of over-borrowing and printing money, the amount the government spends is all that your really need to describe government power. Lack of revenue to back it up is just a ginormous credit card bill that no one seems to remember is out there.
Problem is, if income/wealth inequality is too severe, those guys are the only ones with money to contribute. So on some level, you need a certain level of income/wealth equality just to have multiple classes/brackets with enough excess income to contribute to the national welfare.
Assumptions don't get you anywhere.
Do you think they spend so much on lottery tickets because the rich so unfairly keep them out of derivative trading?
If all you can afford is ramen/bread/fast food, your body makes you overeat to get enough other nutrients (eg. vitamin C, B).
The second is that your insulin goes crazy with all those simple carbs and sugars (carbs are cheap, unlike protein, fish and vegetables, and get metabolised to glucose) so you get massive blood sugar swings. The low side of those makes you eat more and get fatter.
Lottery tickets are a strawman. Or, to quote a science fiction novel that I can't quite remember: "a tax on hope."
Vitamins pills and vegetables are reasonably cheap. And anyway if deficiencies caused obesity, the rate would drop off dramatically over some threshold income.
Lotteries matter because that's where poor Americans spend about 10% of their income. Taxing the rich to destruction will not fix that.
10% of a poor person's income turns out to be about $25/week according to this article: http://www.dailymail.co.uk/news/article-2123448/Poorest-peop.... Hardly earth shattering or likely to lift them out of poverty if they somehow manage to save it.
Re. lottery spending, they are losing $12 a week! That is $600 a year! That could buy premium multivitamins, an extra several eggs a day, rather a lot of cheese, with money left over for the occassional meal out.
The problem of most poor Americans is not resources, it is the deployment of them.
Hmm... the blatant gambling nature of both of those makes it a good analogy.
Wouldn't a better solution be to increase the size of the middle class rather than decrease the size of the upper class?
Also, among the western european nations and the US, I suspect a strong correlation between immigration rates and the data on the chart.
No, not at all. Who have you ever heard make such a claim?
The issue is the size of the inequality, its growth, and the fact that historical periods with less inequality and a stronger middle class seem to correlate with strong overall growth and prosperity.
There's another take on it here: http://www.quora.com/Economic-Inequality/How-is-income-inequ.... In, that link says that the degree of inequality matters in the us because in the us, the poor are desperately poor, and the rich are fantastically rich. In other words, if the poor had a pretty good standard of living and the rich were absurdly healthy, maybe that would be ok, but that's not the situation we have.
The blather about a strong middle class is misdirection. If the U.S. governing.g elite cared about the middle class, they would abolish the armies of bunny rabbit inspectors, No Child Left Behind functionaries, and so forth. The American middle class is being choked to death by regulators, not billionaires.
Massive gaping holes in income distribution are inherently anti-democratic. That might offend a person's capitalist sensibilities but it doesn't make it any less true.
Also, I have some friends who grew up very poor and who believe pretty strongly that it's wrong to own an excessive amount of money while others go hungry. Though I think they make good points, that's not my view.
TARP money has been paid back almost in full, depending on who you talk to. The DoE budget is like an eyedropper full in the wake of an ocean, compared to the DoD and elderly entitlements. And, if you want $FAVORITE_CANDIDATE to touch Medicare and Social Security, you go right ahead. I'm quite positive they will smile and move on, knowing where their constituent bread is buttered come election time. Believe me when I say that the elderly are the most important lobby in the US, and they don't even have to spend a dime to influence almost every branch of government.
And the only reason why SS/Medicare are running out of money is because the government frequently borrows against social security surpluses. You may remember, back in 2000, one of Al Gore's campaign promises was to put social security into a "lock box" with the hopes of stopping this (IMO it likely would not have buy-in from congress but it's still a good idea).
I care. If they increase our debt or just start printing extra money, they have fulfilled their obligation to SS while screwing the rest of our economy pretty hard.
> has very little meaning except taking part of the money out of circulation for no reason
Very little meaning except having the government follow rules of financial discipline that any financial advisor would advise individuals and businesses to follow. If you want to save after-tax money for retirement, separate it out from the rest of your disposable income. Keep separate accounts, separate records, etc. Otherwise, you'll blur the line between your different monetary purposes and it's doubtful you'll mean your savings goals.
It's about discipline and clarity to the American public. Sure, a dollar would be a dollar if the government were responsible enough to follow sound money management principles... but when have they ever done that?
too late. Inflation and QE already happened.
And the fact that we have third-rail (untouchable) programs in this country is NOT a strong argument in favor of more "investments".
Education performance lagging in the US is not the fault of it being federated. The shining education systems by competency in Math, Science, and Reading comprehension (S. Korea, Finland, Canada, New Zeland, and Ireland) all have federated education systems. FWIW, though, I love the idea of the Finnish 7-16 compulsory school then switching to academic (university) track or vocational (tech school/apprenticeship) track. That is something we can and should do here in the states.
It's not the fault of being federated, but obviously federating it here the way we did was a catastrophic waste of money and effort.
Maybe we should completely scrap the current waste of money and gradually put something else in place that works? I certainly don't trust the current power structure to do anything but continue to waste our federal education dollars.
For the sake of presenting the alternative perspective advocating the abolishment of involuntary schooling, I would recommend reading the following piece by Cevin Soling: http://www.forbes.com/sites/jamesmarshallcrotty/2012/02/27/w...
Rather than having a few large investors who may likely invest in stuff they never or rarely use which could have a habit of creating a bubble.
Yes. Tony Robbins did a great deconstruction of this in a video, "Is taxing the rich enough? Will that solve our problems?": http://www.youtube.com/watch?v=jboTeS9Okak
(Regardless of what you think of Tony Robbins personally, this is an excellent video. I love how he breaks down exactly how much money it would take to really solve our financial issues.)
To put the $7 trillion in perspective, over 11 years, that's about $2500/year in extra tax per American citizen. Now, most citizens definitely can't afford that, it's true. But looking at it in per capita per year amounts makes the numbers look a lot more tenable to me.
When someone quotes values "over the next 11 years" I can't help but wonder about their objectivity.
"the US already gets 70% of all its taxes from the top 10%"
The rich are getting richer not because they pay too little in taxes, they're getting richer because they rig capitalism with the help of their buddies in D.C.. Level the playing field of commerce, and you'll start to see some redistribution of wealth.
And there's nothing unfair about the top 10% paying 70% of the taxes, in fact that statistic doesn't include the relevant data to even see if it's fair. It's not their share of total taxes that is relevant, it's what percentage of their income vs the percentage ordinary people pay that matters.
For example, if that 70% only represents 20% of their income, then 70% isn't enough, they aren't paying a fair share.
This shows tax cuts as the largest cause in our deficit. I won't argue that getting rid of tax cuts will get rid of the deficit, but every tax season, the money lost from these cuts doesn't go towards reducing dept. Worse, the amount lost from cuts grows each season.
"Are they really investments or are they just political favors that over-cost and under-deliver? (See the Department of Education, TARP, Medicare, war, etc.)"
The graph shows that TARP doesn't impact the budget much.
Plus, the idea that ending the Bush tax cuts and giving a break to the poor are mutually exclusive is a false dichotomy. The power exists to do both.
It grew in an unmanageable mess of complicated rules that nobody understands and that has very little relation to its original purpose. Since it worked so nice the first time, we absolutely have to do it again.
> and have yet to hear negatives to the "rich" paying a bit more, especially if many of them are for it.
By "many of them" you mean half-dozen wannabe politicians? You are confusing the opinion of tiny vocal minority with the opinion of silent majority which doesn't do talks on TV.
The reasons not to do it are plenty - grabbing more money from productive people to feed insatiable appetites of runaway government spending projects is not a sustainable model. Since most of the politicians are afraid to talk about any serious spending cuts and measures to bring deficits under control, it will not end up in anything but the same deficits with more government spending. Government can spend arbitrary sums of money, so we'd just end up in the same place very soon.
I do not think that is the case, generally speaking.
Investment generates profits. It doesn't add to aggregate demand, but subtracts from it.
But much of that investment heads out of the US to foreign companies or foreign expansion of US companies.
One could argue that Reagan's administration saw some powerful growth, adding 15 million net jobs; but, again, he maintained a >50% top marginal tax rate average through his tenure.
The Clinton administration growth rate was even more powerful (arguably) than Reagan's, seeing 23 million net jobs during his tenure, and that was when top marginal rates were nearly 40%.
An outlier, and a very powerful one, is when we saw the largest uplift from post-war growth phase to absolute juggernaut boomtime, was during the 50s, when top marginal tax rates were 90%. Somehow, I doubt we'll ever go back to that time (both in growth and taxation), but we can see that the times of growth was when top marginal tax rates were over 40%. Dip below, no room to grow.
IMHO (with evidence), of course.
* how much (usually as a % GDP) should / does a govt take?
* how does that tax burden get shared out
the first is an issue of services provided by govt, but thesecond is an issue of fairness.
If you want more services you need to pay. As a % of GDP the USA takes about 26-28 % whereas pretty much every other Western country is between 35 and 45%.
My take on that is welfare costs. Full health and pension support for all the USA is going to be expensive, and will probably bring the US in line with Europe
the issue now is fairness - but even taut is really about ability. The easy targets are the middle classes - they have money but rarely enough to take advantage of tax loopholes
but if all the money is now held by the richest 2% then the richest 2 % will pay. The alterntive is no government
we all live by the 1930s maxim - I rob banks because that's where the money is. If the richest people in society have the money, that's where the bank robbers / IRS will go.
Fair has little to do with it
btw, the US government already spends more per capita on health care than the Canadian government does, yet Canada has a (mostly) public health care system and the US has private system where even people with insurance can go bankrupt from medical costs.
Why would you average a tax rate over various year? Seems a deceptive thing to do.
If we had the kind of tax structure you propose, we'd equally reward those who invest their money in growing companies, and those who blow it on hookers and blow. Some libertarians would claim this as a just tax system, and that the free market would determine how and where people invest, but this is not an idea that has much purchase among economists, social scientists, or the political elite.
I guess I have to correlate until we run out of data, then checkmate or something.
for eg. the effective rates don't match up for the 80s but they do for the 90s. they also don't take into account capital gains, which is what most of the top 5, 1% etc. pay
then if I was arguing the other side of the debat I would say that this data hasn't been normalized for purchasing power
etc. etc. ad nauseam
I'm not suggesting that there aren't reasonable arguments about what the marginal tax rate curve should look like (flat, curved, etc.) to optimize various economic metrics--just that there are some configurations that we can rule out as unworkable without much real controversy.
We need to:
• Invest in the future: We need to invent, produce, and export new renewable energy sources. We need to invest in robotic manufacturing because cheap people labor is not sustainable in any country - robotic is where it will go.
• We need to heavily tax imports like many other countries in the world do. And have American made things become competitive - we have sold our souls to Asia.
• Drastically cut bullshit spending. There are billions spent every year on...bullshit.
• Invest further in Entrepreneurship, and start bringing smart people from other countries here.
Those are big 4.
The big problem is our countries expenses vs. income is too high. At the end of the day, a country is a business. And right now, we are a company that is not running well. We need to clean out the board of directors (Congress) and start fresh.
So I guess it depends on what problem you want to solve, but if you're worried about the federal deficit, then higher taxes (even in the form of just eliminating the bush tax cuts) will absolutely help to solve that problem.
If I tell you, "Fred is always running out of money; in fact, he's deep in credit card debt," your immediate response is not going to be "He should get a raise so he can pay off that debt" or "Here, give this money to Fred."
I'm not sure where you're going with that analogy. It all depends on whether Fred's spending his money wisely or not.
So your analogy doesn't just do work for your position; it clearly cuts both ways.
Look, I'm no defender of gov't waste, but you can't blanketly say "bullshit" without specific examples. One's man bullshit -- the two Steves with their "toy computer" -- is another man's gold (Markkula, who saw the promise and invested early). Is NASA bullshit? Is protecting the environment bullshit? GPS satellites? The Coast Guard? Food inspection? I see the news headlines like everyone else trumpeting what look like screwy studies. What we never ever hear is any follow-up that one "stupid" study connected to a non-stupid study that led to a breakthrough. A breakthrough that most likely was just handed over to some private company to exploit for profit without any compensation coming back to taxpayers (this has been the case for decades with private companies taking government-tabulated data and reselling it as for-profit databases). This latter giveaway to private enterprise with original funding by working people is the ultimate bullshit to me.
No, it's not. It needs to manage its finances responsibly, but that is quite different from being a profit-generating business.
BUT, The goal of a country is to amass wealth, is it not?
The problem lies in that determining optimal services is a no-win game as it differs greatly in most geographically areas and person-to-person.
Corporations are far more focused on a particular set of goals and have a far smaller audience to satisfy (shareholders) who all generally want more wealth.
So no, a country (or government) is not the same as a business.
I feel he blew his chance to get the message out. I also feel that most TED watchers already know this argument.
Wonderfully, it is part of the "Rethinking Poverty" Theme:
Don't we want the people at TED to be able to share good arguments concerning precisely the things that are most important and most misunderstood (which hot button political issues are, since people now choose an opinion based on tribalism rather than reason)
So that reasoning is bullshit. I don't want democrats or republicans choosing which topics are now off limits for debate because they are now political. For fucks sake, political topics are the ones that need debate. What else does "political topic" mean other than "this is important to our society and there is disagreement".
So TED talks are "Riveting talks by remarkable people on subjects that have not been deemed off limits by one of the two big political parties in the US".
Nevermind the fact that this clearly has nothing to do with political controversy as described, everyone knows there are talks about evolution, climate change and cosmology. The only difference is that there are likely people at TED who might disagree with this one.
I'd suggest it's not too controversial but too pedestrian. Or maybe I'm seeing this through European eyes; ideologically, this topic/argument is mainstream here, even if politicians fail to do much about it.
It's not controversial among people who are educated in the subject, but among the general amerian public it's incredibly controversial.
Americans, in broadly general terms, aren't interested in non-American things. Or intellectual anything. So yeah, combine those two together and you get the worst of those two general trends.
The only book I found was at a major university's library, in German.
It was a "WTF" moment.
If you want poor people to get richer, tax them less (or remove them from tax altogether). Don't re-circulate the money via self-interested politicians to waste.
The fact is, there are as many viewpoints as there are billionaires, and that's what keeps them from forming a cabal. If you want to find someone who can form a cabal to bend the system for private profit, look for a corn farmer.
The point is, policy isn't corrupted by billionaires, it's corrupted by large, politically powerful blocs, which may or may not have individual rich people in charge. It helps if the blocs are geographically concentrated, because the political system works state-by-state.
Hamilton is rolling in his grave...
At least many gas stations are starting to offer completely ethanol free gas now, although at a premium.
TED talk about it: http://www.ted.com/talks/richard_wilkinson.html
I'm sure you could find studies that disagree with this.
Furthermore, I don't see how fixing the income inequality fixes the root problem there.
It doesn't, but it might make the lives of millions of people better in the medium term, and possibly result in knock on legislative changes that give more power to working people: repeal of anti-labour laws and so on. Which makes further real change to the system more likely and possible.
You will find many far left wing types have little interest in proposals to fiddle with the tax system, for the reasons you describe: it doesn't fix the real problem. And in a funny way it may well be against the interests of the proletariat: it prolongs the slow death of the current system. That doesn't mean the far left doesn't talk about income inequality of course, but they do so with a different aim: to increase awareness among the working class of their exploitation, with eventual revolutionary goals.
People have been debating the relative merits of gradual reform/revolutionary change for a long time now…
Because people by their nature are jealous. Many people even hate when their friends do better than them for some reason.
There's some wealth that's genuinely locked up, sitting in items that provide no utility for example. Say fine art locked in someone's vault or basement. But it's not all that much as a percentage.
Where the bigger problem in recent years has been is all the wealth tied up in what is essentially sophisticated gambling mechanisms in the financial markets. Money tied up in ways that aren't providing any true value to the economy (mumbo jumbo justifications aside). I'd be all for rules that stopped that sort of thing with funds subject to public bailouts. Your own money, your own risk, fine go ahead. Your money but risk assumed by the government? No. No thanks.
It is, but only in the most limited fashion. Money sitting in bank accounts is doing very little to improve unemployment. Buying physical goods would be much better for that.
> One of the worst economic problems of recent years has actually been the lack of money just sitting in reserve to give the banks stability.
In a way, that's true although I wouldn't frame it that way. The banks could make loans and then sell those loans as investments -- they didn't need any money on hand for that. Increasing deposits, for example, wouldn't change anything.
There's a strong correlation that indicates that poorer health outcomes, higher crime, poorer standard of living all go hand in hand with greater income inequality.
Again, you may not care, for your own sake, but the country is a fair bit larger than you, and this problem does affect us all, whether we care or not.
Income equality is not about solving all problems. It's just trying to rectify one of the most egregious ones.
$32k would still not be a comfortable standard whether Bill Gates had earnt $1million or $1billion.
Hardly too hot for TED, more likely to set people to snoozing.
Nick Hanauer cannot be more wrong. Taxing rich people means punishing someone for his success. There is no argument that could justify such Robin Hood's behaviour. In fact that's what was (or is) happening in the communism. So regression at it's finest. I think that someone hasn't had his history homework done.
The things is that the root of the problem is somewhere else. If you think about evolution for a second. Weaker species are removed, stronger survive. It leads to creating better and better species. On the other hand, if we helped weaker species to survive as well, then not only this natural filter is effectively stopped, but also ironically, the situation is even worse for the stronger ones. That would inevitably make the whole ecosystem poor.
To wrap it up, if God (or some other kind of Force) decided to help poor species, we, humans, would never exist. Why don't you just support the idea, that put you into existence?
Why is taxing seen as punitive? Is it punitive when we tax middle class people? It's just a mechanism to collect funds for things that are better done with public money than private money. Since the rich stand to gain more from many of the investments, they should pay more. All those companies that make physical widgets? They have to be shipped, largely via roads. Their business and their continued success relies on well constructed roads, of course they should pay for them in the proportion that they use them.
> There is no argument that could justify such Robin Hood's behaviour. In fact that's what was (or is) happening in the communism. So regression at it's finest. I think that someone hasn't had his history homework done.
Please, if you think the only options are state-socialism and laissez-faire capitalism then it's you who hasn't done their homework. Reading Atlas Shrugged doesn't count.
This is all boilerplate American-libertarian thinking. You don't understand evolution beyond "survival of the fittest", so don't use it to justify your arguments. Cancer is very successful at reproducing, it sucks up resources and bullies around the "weaker" cells, that doesn't mean it's a positive thing or something that will lead to long-term system-wide prosperity.
"It's not the strongest who survive, nor the most intelligent, but the ones most adaptable to change." Charles Darwin.
By (incorrectly) calling someone who isn't rich "weak" you're placing your personal judgements on them, because that's not at all what Darwin was talking about.
I do find it interesting that you consider taxing people "punishment". Does that mean you consider government, or at least funding of the government, a form a punishment?</tangent>
What if the current system is rigged (by loopholes and allowances for swiss banking) so that the rich can avoid paying what the rest of the population does? Wouldn't that mean the "weaker" species were the ones actually being punished? So by raising the effective rate on the rich wouldn't you simply be restoring order to the system?
To the first point, are bankers, the founders of instagram, athletes, and movie stars really contributing so much to the world that they are worth hundreds of doctors, or thousands of teachers?
To the second, would you be successful if it weren't for those doctors, teachers, garbage men, police officers, mail carriers, etc.?
People are paid what the market says they are worth, at least in the private sector. There's only one LeBron James and only one Bill Gates. They may stand on the shoulders of giants, but they each provide more value than what it costs us collectively to have them entertain us and create software. That's called consumer surplus. Mass markets produce mass income disparity- the few winners get the fat end of the distribution curve- but we would be far worse off with out that consumer surplus they provide.
How about taxing all people at the same rate, regardless of how they earn their income? I think that's what the bigger discussion is about.
So do you not have a problem with someone using brute strength to take the property and wealth of someone else?
Are you against people receiving treatments for curable diseases?
Social cooperation & concepts of fairness have also played a huge part in the success of the human species.
But your comment is offensive. Dangerously so.
Your view is actually incredibly typical throughout history - its latest incarnation is Social Darwinism, where one mistakenly applies a biological and genetics principle to economics and morality.
Social Darwinism has been the tool with which countless people have been oppressed, abused, and killed. The pro-slavery crowd used that argument - that colored people were genetically inferior, and that if they were meant be to free, they'd already be. This line of thinking was also popular amongst the Eugenics movement in the early 20th century, which had clear and strong ties to the Nazi party (boy this argument just Godwins itself).
With its colorful history, social Darwinism is nowadays inseparable from racism and fascism.
But your claim is even more specious than this lot of despicable people. At least the slavers and the Nazis made arguments that certain races deserved their lot due to "inferior" genetics, but your appeal to Darwin/evolution doesn't even involve the least bit of biology. It's just pure hand-waving by applying one completely unrelated field to another, with zero facts to even attempt to back it up.
Shame on you.
That is a false conclusion. In particular, inheritances. Certainly you don't consider being born to rich parents a form of success?
To those of you who are pretending that you've done it all on your own without nobody's help and get your hands off of mine it's all mine mine mine! You're deluding yourself.
I can understand why TED don't want to touch his talk. It would be interesting to note how consistent TED are in this respect.
With whom other than the socially conservative wing of the US Republican party is birth control "controversial"? A few thousand people in Vatican City, some other religious leaders of their ilk, and a scattering of anti-colonialist thinkers.
I would have thought TED would have taken a more cosmopolitan view of what counts as controversy.
It's persuasive but that's because I already agree with him. I'd like to see it backed with real data so it could be persuasive to all. Then it would be more of an "idea worth spreading" rather than "a really good idea".
The main quick fixes to the tax code which I'd like to see are immediately taxing carry as income, getting rid of deductions for employer health insurance and mortgage interest, and a national sales tax or VAT (ie consumption tax), ideally highly progressive or exempting the first 50k/yr or something. Then, look at lowering income tax rates to something like 25% flat and setting lt capital gains and dividends at slightly less (20%) or the same as income but indexed for inflation. Get rid of the AMT, and maybe lower corporate rates to try to get firms to repatriate more and avoid abusive tax structuring like the double Irish sandwich and such.
A more transparent tax code, even if revenue neutral, would boost economic activity. A more transparent tax code, taxing things with negative externalities and not discouraging positive externalities, raising more income while cutting expenditures greatly, would be even better.
Not that there is much chance of any of this happening.
I think it's pretty ridiculous TED would not post this video. They really shouldn't be censoring things like this unless someone is just completely making things up in their talk in which case they did a poor job of picking their speaker.
Why did I submit it? My tremendous admiration for and personal gratitude to pg and the HN community is tempered by a sense that the community, composed as it is of human beings, tends to think that it deserves the good things that happen to its members. In the case of the extraordinary wealth, the good things that happen effect what we might call the political economy of ideas in the community. I thought this incident might cause a few HNers to think about that: not Hanauer's ideas, but how deals are actually closed in the proverbial marketplace of ideas in which we are all participating.
Real economic issues require solid statistical analysis based upon proven economic models. Anything less is just a projection of emotional bias that means little to society and would never solve anything.
I'll leave that there to speak for itself.
> Have you also algorithmically quantified love too?
I can certainly see where an emotional person who doesn't know much about economics would try to turn this into an emotional issue. It's not. It's an economic issue. The whole reason why we step from one financial mess to the next is that we don't make political decisions based upon economic forces such as supply & demand. Political decisions are typically made to benefit the power of politicians. They do so by making emotional arguments to people who don't really understand much about economics but who know how to pull a voting lever. Congratulations, that means you.
> People are not machines and, as messy as you might find this fact to be, have emotional components.
And this has precisely what to do with the economic health of the country?
> I'll leave that there to speak for itself.
It was a trap.
And flesh out his thinking. For instance, that bit about:
> "If the typical American family still got today the same share of income they earned in 1980, they would earn about 25% more and have an astounding $13,000 more a year. Where would the economy be if that were the case?"
I would love to see some stabs (pessimistic, median, and optimistic) at following out the economic effects of that question. What is a reasonable ratio of the $13k which would be put toward more spending, and how would that effect the demand seen by businesses, and thus the number of jobs supported?
The world is more complex than a lot of the arguments that people have on this issue.
One side appears quite facile and naive in their hero worship of entrepreneurs/investors at seeing/creating the future (when the chances are they merely bump into it along with many others).
These are almost universally young people who are nurtured/protected by their families/society or already successful people who think they are the sole cause of their success (it's usually a combination of internal AND external factors).
The other side is too oppressive and cynical, stating that entrepreneurs don't create jobs, but extract wealth. These are usually unprotected people, the poor, and the unsuccessful who just don't understand why they are trodden upon and treated like vermin to be ignored.
The world isn't black or white. It looks like it is extraordinary complex with many shades of gray.
Hence the best way to look at this issue is thus: If you were the down trodden upon, the poor, the unlucky, the unhealthy - How would you like the tax system to treat you?
Would you like them to say:
No, your situation is ALL your fault - the rich matter, we shouldn't tax them and let them create jobs for little all you.
Yes, the rich are extraordinarily lucky to have what they have, and it would be best to share that around.
Because as you all know: You had a 50% chance of being born in the rest of the world, in the darkest poverty, where nothing you did, said, or who you are meant anything because of your situation.
Born in America: Billionaire.
Born in Afghanistan: Your dead.
What you can achieve has doesn't correlate strongly with what actually happens to you - you are made by your situation.
We float with the times and environment around us - not the other way around.
It feels intellectually shaky to assert that the economy will go back to growing, if only the middle class can go back to spending, which we can achieve by giving more money to the government.
Here's a different and more TED-like viewpoint: Perhaps economic growth actually requires movers and shakers. The US has had a good share of them. These people aren't going to be your archetypal rich fat cats, nor your average Joe living paycheck to paycheck. If they are rewarded with wealth, that is a good thing. And sure, some of that wealth can go into a pot to use for the common welfare.
If we want more consumer spending, let's give people better things to spend money on, things that help them in their own quest of fulfillment and creating value.
If businesses are reluctant to hire, it's only because they need to make correspondingly more money to make the hire worthwhile. As we know from start-up land, many tasks can't be done better by throwing more people at them, especially creative tasks. We're still trying to solve the problem of how individuals can cooperate and merge their individual strengths towards big goals. A full-time human ought to be a very valuable asset to a company, though, and many companies can be viewed as engines that take human effort and turn it into value, creating money.
Economic growth is not to be taken for granted. It requires innovation, optimism, and positive energy that comes from individuals. There are many things rich and non-rich people can do with their time and money to help, besides just giving their money to the government. Take something you're good at and provide a service, or make something and sell it. Lend a cup of sugar to your neighbor. Earn what you're worth. Invest in good businesses. Pay someone to do something for you. And on and on.
Now I'll just watch as my karma plummets for speaking my mind on something. Oh well I guess.
Edit: I do think though that TED is wise not to wade into this battle. It is a very politically charged topic, especially right now.
So, you are up for some kind of strong inheritance tax to ensure that people have to work hard or invest savvily rather than just inherit money from their family.
'Cos, you know, inherited money is neither gotten "according to their work" or "earned", but rather received purely on the basis of random genetics.
If you're going to argue that, then you have to be willing to give up what you have too. If you're going to talk about the 1% in America, you have to talk about the USA as the 1%, because, let's face it -- if you live in the US, you've got a hell of a chance of being better off than most of the world.
Now you're getting it. Educational opportunities, nutrition, etc. It is exactly these institutional inequalities which lead to the un-meritocratic wealth distributions which are causing such instability.
We do, actually.
Also, you posed a false dichotomy "Whether you got your money through savvy investing or hard work" and when you were called out on this by having other options for people's money sources pointed out, said that you "don't see" and changed the subject to something emotionally charged.
I get not liking "the 1%" but you do the exact same thing by using the word "handouts". You swapped one co-opted term for another. One can only assume you really mean "welfare" when you say "handouts", and that to me means you have no idea what welfare is or what it does for the families and people that need it.
You swapped one co-opted term for another.
With this logic, there won't be any words left to describe anything that haven't been "co-opted". A handout is a handout.
To be honest, it seems to be basic common sense, if this is too controversial for TED then they are seriously losing their way.
As for saying they had Melinda Gates talking about contraception around the same time and thinking that it was a reasonable excuse for backtracking. Well to me, that just doesn't even start to make the slightest bit of sense as an argument.