Author Topic: Inequality: the long view  (Read 13143 times)

Alim Nassor

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Re: Inequality: the long view
« Reply #200 on: June 30, 2017, 05:32:52 PM »
I've never understood the mindset that thinks the government is more entitled to an estate than the heirs are.  SMH.

I always find it a bit difficult to understand the mindset that the heirs are entitled to anything at all.

I find it difficult to understand why anyone would think the government should get the money
someone worked and already paid taxes on. The owner of the money should have the right to say where it goes.
Because we tax money when it changes hands.  Almost always.
The owner earned the money, the recipient did not, thus it gets taxed.

Alright Komrade Alim Nassor.

Maybe I'd understand this better if we talked about the amount of wealth that gets hugely taxed. If I have a nice muscle car, do I get to leave that to my grandson or does that get sold at a government auction?

Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."

Don't call me Komrade.  Re-read the thread and attribute the quotes to the proper people,.

EnjoyIt

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Re: Inequality: the long view
« Reply #201 on: June 30, 2017, 05:37:57 PM »
Here's why I'm against inheritance taxes: it destroys the idea of a family building fortunes over generations, and fundamentally that's what life is all about. As the Greek proverb goes, "A country grows great when old men plant trees whose shade they know they shall never sit in."
Sweet, we've discovered the meaning of life! Good game everybody, we can all go home now.

Because people for all of history struggled and lived and built civilizations just for fun... not to leave something to their children.

No one is claiming that there should be no inheritance to pass. Virtually all would prefer a reasonable (up for debate) amount that could be passed on completely tax free. You just used a classic straw man.

No, I'm countering snark with snark. But what all of you pro-inheritance tax people are really saying, and it's a bizarre thing to read on MMM forum, is that we are all really just borrowing our wealth from the government until we die.
No.  My wealth is mine.  MINE.

It is not, however, my kids'.  When/if they get an influx of money, it may be taxed.

Classic Marxism, eliminating or severely limiting inheritances is a way to make families rely less on each other.

I don't think anyone is advocating for eliminating or taxing inheritances in the seven-figure or less category.  I think the discussion starts around the 8 figure mark, and even there only considers percentage tax, not a complete elimination.  Pretty much anyone can set their kids up for life with these amounts before any taxes come into play.

Why 8 figure mark? Is it because you will never have 8 figures so it seams like a high enough number for you?
Why not at $14k? Treat everyone fairly?

Papa bear

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Re: Inequality: the long view
« Reply #202 on: June 30, 2017, 06:14:37 PM »
Wow thread derailed!!!  I'll comment to add to the crazy...

Here's some information for those who consider themselves more conservative and want more of a classic Adam Smith capitalism.  (See article below) Personally, I am in favor of some form of inheritance tax, the debate is for how much.  I don't see anything wrong with the current limits, just index them to inflation and move on.  The point of some taxes is to disincentive some behavior. And dynastic wealth is something our country's founders vehemently hated (think royal aristocracy that was so prevalent). So disincentive it through taxes. Give most away or it ends up in "evil" government coffers.   Don't be a Tory.

For the record, in the argument for the "morality" of taxes, I have argued before that taxes on conditional transactions is reasonable.  Condition: death.  Transaction: transfer of wealth. Tax it.  I will argue against wealth taxes, in particular real property taxes, the only real wealth tax in the US today.

https://www.economist.com/blogs/lexington/2010/10/estate_tax_and_founding_fathers

If there was one thing the Revolutionary generation agreed on — and those guys who dress up like them at Tea Party conventions most definitely do not — it was the incompatibility of democracy and inherited wealth.

With Thomas Jefferson taking the lead in the Virginia legislature in 1777, every Revolutionary state government abolished the laws of primogeniture and entail that had served to perpetuate the concentration of inherited property. Jefferson cited Adam Smith, the hero of free market capitalists everywhere, as the source of his conviction that (as Smith wrote, and Jefferson closely echoed in his own words), "A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural." Smith said: "There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death."

The states left no doubt that in taking this step they were giving expression to a basic and widely shared philosophical belief that equality of citizenship was impossible in a nation where inequality of wealth remained the rule. North Carolina's 1784 statute explained that by keeping large estates together for succeeding generations, the old system had served "only to raise the wealth and importance of particular families and individuals, giving them an unequal and undue influence in a republic" and promoting "contention and injustice." Abolishing aristocratic forms of inheritance would by contrast "tend to promote that equality of property which is of the spirit and principle of a genuine republic."

Others wanted to go much further; Thomas Paine, like Smith and Jefferson, made much of the idea that landed property itself was an affront to the natural right of each generation to the usufruct of the earth, and proposed a "ground rent" — in fact an inheritance tax — on property at the time it is conveyed at death, with the money so collected to be distributed to all citizens at age 21, "as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property."

Even stalwart members of the latter-day Republican Party, the representatives of business and inherited wealth, often emphatically embraced these tenets of economic equality in a democracy. I've mentioned Herbert Hoover's disdain for the "idle rich" and his strong support for breaking up large fortunes. Theodore Roosevelt, who was the first president to propose a steeply graduated tax on inheritances, was another: he declared that the transmission of large wealth to young men "does not do them any real service and is of great and genuine detriment to the community at large.''



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Bucksandreds

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Re: Inequality: the long view
« Reply #203 on: June 30, 2017, 06:37:58 PM »
^^^^

You're preaching to the choir. The conservatives won't even consider what you're saying. They're absolute f&()ing nut bags.


[MOD NOTE: Forum Rule #1]
« Last Edit: July 02, 2017, 06:52:09 AM by FrugalToque »

Alim Nassor

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Re: Inequality: the long view
« Reply #204 on: June 30, 2017, 06:57:08 PM »
^^^^

You're preaching to the choir. The conservatives won't even consider what you're saying. They're absolute f&()ing nut bags.

If disagreeing with you makes me a nut bag,  then I'm proud to be a giant economy size one.   Most adults have acquired the ability to have open discourse without acting like a 6 year old.   You should try it.


[MOD NOTE: Enough already.  Let's use our manners.]
« Last Edit: July 02, 2017, 06:53:07 AM by FrugalToque »

sokoloff

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Re: Inequality: the long view
« Reply #205 on: June 30, 2017, 08:17:31 PM »
You're preaching to the choir. The conservatives won't even consider what you're saying. They're absolute f&()ing nut bags.
If one were to read this thread on balance, I'm thinking those repeatedly lobbing ad hominem attacks would be more liable to be so labelled.

bender

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Re: Inequality: the long view
« Reply #206 on: June 30, 2017, 09:19:32 PM »
If one were to read this thread on balance, I'm thinking those repeatedly lobbing ad hominem attacks would be more liable to be so labelled.

+1

Please let's knock off the juvenile insults and discuss like adults.  There's some good thoughts in this thread from differing viewpoints.  I've learned a bit and my own view is more educated and shaped from the discussion. 

Attacks only weaken whatever position one is trying to support.  The conservatives this or the liberals that...  Straw man...  it's all disgusting.  It feels like divisive political ads all over again.

index

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Re: Inequality: the long view
« Reply #207 on: June 30, 2017, 10:06:48 PM »
The general consensus of the studies I have seen show the US is trending toward less income equality and less social mobility. The historical record shows this inequality is eventually corrected through tax policy, war and confiscation, or an order of magnitude population reduction.

The economic boom of the past 37 years and 2.5x expansion in the economy has only benefited  the incomes of the to 10%. We can state the poor have cars, iPhones, and flat screen TVs all day. Luxury items have gotten more affordable, but this doesn't change the fact that there is 2.5x the gdp today in real terms as  in 1980 but none of those dollars have gone to the bottom 90%. Engineers and accountants are making the same real income today as they did in 1980. 

If these facts are wrong please show some data that disputes this. Don't make up a fact like someone born to parents making 20k has a 20% chance if making 80k, the real number is 6-7% and is easy to verify.

I think the left and right can agree there is a wealth Gap. That it has grown since 1980. It is continuing to grow. We can see historically how a growing wealth Gap has ended. We know the founding fathers view of stratified wealth. The question is can anything be done?

Some on here have suggested increasing income taxes and more tax brackets separating the 94% from the 99, and 99.99%. Others have suggested a steep wealth tax. Several posters are opposed to increasing taxes in any way. So what do you propose? The speed of stratification over the past 37 years, the growth in public debt, and movements like occupy wall street and the performance of a candidate like Bernie Sanders makes me think we are not going to stay the course for another 37 years.

We can have a civil discussion about what would work between those if you in the right and left in this board and in the country as a whole and have a compromise where everyone gives in to something. The alternative is to watch the trainwreck happen which may lead to war/confiscation which could hurt those of us on this board planning on saving 6 figure staches. This could actually happen in it lifetimes and it scares the shit out if me. I am genuinely interested in what it society could do to avert this scenario.

Bucksandreds

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Re: Inequality: the long view
« Reply #208 on: July 01, 2017, 05:32:38 AM »
If one were to read this thread on balance, I'm thinking those repeatedly lobbing ad hominem attacks would be more liable to be so labelled.

+1

Please let's knock off the juvenile insults and discuss like adults.  There's some good thoughts in this thread from differing viewpoints.  I've learned a bit and my own view is more educated and shaped from the discussion. 

Attacks only weaken whatever position one is trying to support.  The conservatives this or the liberals that...  Straw man...  it's all disgusting.  It feels like divisive political ads all over again.

By responding to your ridiculously fringe/ uninformed views with complete civility I would be giving some merit to your positions. Those positions are comple f$()ing nutjob positions that crumble in the face of any logical/scientific scrutiny.  The right in this country has gone off the deep end. It has learned nothing from history, it cares not for fact or scientific proof. It cares only about promoting an ideology of every man for themselves. The truth is civilizations were built because, to some degree, we have to be all in this together.

sokoloff

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Re: Inequality: the long view
« Reply #209 on: July 01, 2017, 08:40:02 AM »
The economic boom of the past 37 years and 2.5x expansion in the economy has only benefited  the incomes of the to 10%. We can state the poor have cars, iPhones, and flat screen TVs all day. Luxury items have gotten more affordable, but this doesn't change the fact that there is 2.5x the gdp today in real terms as  in 1980 but none of those dollars have gone to the bottom 90%. Engineers and accountants are making the same real income today as they did in 1980. 

If these facts are wrong please show some data that disputes this.
I do not dispute the GDP growth numbers, but from here and here, I think it's more relevant to talk about the per-capita figure, which is 1.6x.

Looking for engineering salaries over time, I found this, whereby it seems like fresh college grads in chemical and mechanical engineering are earning 1.1x what they did in 1980 (in inflation adjusted terms) and electrical engineers are earning 1.2x what they did in 1980. These are fresh college grads, where there's no particular reason to think that they're particularly more skilled or "useful" to industry than they were 37 years ago.

Looking across the total population, I do not see evidence of zero real income growth there either. From analysis of 2015 Census Bureau report, it shows real income growth across all quintiles. (Note that this is from 1967 to 2015, because that's the data they used, and I didn't go track back to see if it specifically held in 1980 to 2015 timeframe, though from the graph, it is visually clear that it has done so.)





I do agree that things are becoming more uneven, but I do not see evidence to support "none of those dollars have gone to the bottom 90%". In fact, I see strong evidence above that the bottom 90% have also benefited during this time, beyond simply having much more affordable luxuries, they have increased income in real (inflation adjusted) dollars.

sokoloff

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Re: Inequality: the long view
« Reply #210 on: July 01, 2017, 08:46:30 AM »
By responding to your ridiculously fringe/ uninformed views with complete civility I would be giving some merit to your positions.
You should be fairly confident that you aren't running any risk of responding with complete civility.

A Definite Beta Guy

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Re: Inequality: the long view
« Reply #211 on: July 01, 2017, 12:31:22 PM »
The general consensus of the studies I have seen show the US is trending toward less income equality and less social mobility. The historical record shows this inequality is eventually corrected through tax policy, war and confiscation, or an order of magnitude population reduction.

The economic boom of the past 37 years and 2.5x expansion in the economy has only benefited  the incomes of the to 10%. We can state the poor have cars, iPhones, and flat screen TVs all day. Luxury items have gotten more affordable, but this doesn't change the fact that there is 2.5x the gdp today in real terms as  in 1980 but none of those dollars have gone to the bottom 90%. Engineers and accountants are making the same real income today as they did in 1980. 

If these facts are wrong please show some data that disputes this. Don't make up a fact like someone born to parents making 20k has a 20% chance if making 80k, the real number is 6-7% and is easy to verify.

I think the left and right can agree there is a wealth Gap. That it has grown since 1980. It is continuing to grow. We can see historically how a growing wealth Gap has ended. We know the founding fathers view of stratified wealth. The question is can anything be done?

Some on here have suggested increasing income taxes and more tax brackets separating the 94% from the 99, and 99.99%. Others have suggested a steep wealth tax. Several posters are opposed to increasing taxes in any way. So what do you propose? The speed of stratification over the past 37 years, the growth in public debt, and movements like occupy wall street and the performance of a candidate like Bernie Sanders makes me think we are not going to stay the course for another 37 years.

We can have a civil discussion about what would work between those if you in the right and left in this board and in the country as a whole and have a compromise where everyone gives in to something. The alternative is to watch the trainwreck happen which may lead to war/confiscation which could hurt those of us on this board planning on saving 6 figure staches. This could actually happen in it lifetimes and it scares the shit out if me. I am genuinely interested in what it society could do to avert this scenario.


I don't support any taxation rooted in envy. I can't possibly see how that's good policy to begin with, and I don't think it is even remotely ethical. I don't think you can reasonably tax an estate anymore than you can reasonably tax a Christmas present.

Most arguments that things haven't gotten better in the last 30-40 years fall into the "lying with stats" argument. If you look at sokoloff's graph, you'll see that household incomes are rising for all quintiles. You should also factor in the value of fringe benefits into those numbers and any cash or in-kind, especially elderly folks.. Also, while all groups are adjusted for "inflation," inflation rates aren't really consistent across households. Lower income households have benefited massively from things like improved automobiles and Wal-Mart shoveling massive amounts of cheap crap. Higher-income households out-bidding each other for positional goods aren't relevant to lower-income households.

You can see the top quintile is benefiting at a pretty good clip. It is not hard to get into the top income quintile. It's a household income of $100,000. I work a basic entry-level corporate level job. If I married one of my coworkers, we would already be in the top quintile. A plumber working overtime alongside a pharmacy technician would be very close to that level.

Those households don't "deserve" to be slapped with massive tax increases. We're also looking at massive tax increases baked into the cake anyways. I just got my property tax bill, and Illinois has released templates for the expected tax increase. In total, my household tax to the state will be increasing 40% this year, and services will be cut, and we are STILL no where close to solving these colossal pension short-falls.

That's not going into the massive federal tax increases that are already baked into the cake.

Personally I think most center-left people are as much in la-la land as the center-right people. I know many young couples that are making six figures (and therefore are in the top 20% of US households) that voted for Bernie Sanders because they think Bernie is actually going to make things better for them, rather than massively raising their taxes (even more than they already will be). These households are much better off than their equiveleants 20-30 years. That's when my parents and in-laws got married. All drove cars that were falling apart, got married without rings, and skipped Honeymoons, because they just didn't have money....all things my Bernie Sanders-Yuppie couples consider utterly ordinary, take for granted, and all enjoy.

This is roughly the same as the Medicaid recipient voting for Trump to "Make America Great Again" and then having his/her Medicaid taken away.

I've shared the anecdote before, but my Wife used to be a big liberal and was there at Obama's inauguration, right up until she had to actually start working with low-income populations in the health care sector every day, and learning her Democratic compatriots consider her "the rich."


But, hey, no point in taking things personally! This is just shooting the breeze. :)

sokoloff

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Re: Inequality: the long view
« Reply #212 on: July 01, 2017, 12:58:38 PM »
I don't support any taxation rooted in envy. I can't possibly see how that's good policy to begin with, and I don't think it is even remotely ethical. I don't think you can reasonably tax an estate anymore than you can reasonably tax a Christmas present.
I agree with almost everything you said in your well-written post. This part is the only part I'll choose to comment on.

If you take an alternative view that society owns everything and you are simply borrowing from society those things that you do have, then the only reason not to tax the Christmas gift is one of practicality ('how can we be assured that we can tax ALL Christmas gifts?'). In that regard, taxing some things might be impractical (and therefore skipped), but taxing estates is not something that happens so frequently that it would be overwhelming to do.

“I rob banks because that’s where the money is.”

I don't have a serious problem with the current estate taxation policies (even though under many cFIREsim scenarios, we will end up subject to an estate tax as I understand the current law). I don't want someone winning at the game of life in 2017 to be controlling a significantly outsized portion of the Earth in 2117. I do, however, want to reward the frugal savers who wish to pass along some wealth to their family (or other recipients of their choosing), just as I'd want the frugal to be able to give a Christmas gift. There are valid public and private interests to allow some wealth to be passed along (no one wants to live in a world where your money literally "expires") and valid interests to restrict the scope of that transfer on the high end.

EnjoyIt

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Re: Inequality: the long view
« Reply #213 on: July 01, 2017, 01:48:50 PM »
There are an unfortunate group of liberal left who love freedom of speech as long as it is their speech.  They will curse, insult, and even assault those they disagree with and not allow them to practice freedom of speech.  Their biggest weapon are insults in the caliber of "racist," "uneducated," "misogamist," and "immoral."

The reality is that just because some people's views differ does not mean they are any of those above terms. Whenever we use slander to have a discussion, that discussion instantly falls apart and no one benefits.

scottish

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Re: Inequality: the long view
« Reply #214 on: July 01, 2017, 02:16:52 PM »
Freedom of speech means that your government won't arrest you for what you say.   It doesn't mean other people must listen politely.

Of course it also doesn't mean that they can beat you with sticks if they don't like what you're saying.

The confrontations I've read about have been on university campuses.    Universities are supposed to be centers of learning.    I think this is a good opportunity for students to learn about critical thinking.    Those who do not respect the law while doing so need to face the consequences whether they are speaker or listener.

There's no shortage of rhetoric and ad hominem attacks on either side.
« Last Edit: July 01, 2017, 02:19:18 PM by scottish »

scottish

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Re: Inequality: the long view
« Reply #215 on: July 01, 2017, 02:23:05 PM »
But I meant to write about inequality.

Extreme inequality is bad because it's bad for society.    The very wealthy have great control over other people.   They can influence elections to their benefit.   They can undertake large scale monopolistic strategies.   And so on.

Is there some other way to reduce extreme inequality other than extreme taxation?    and is taxation sufficient on it's own?

And what about huge corporations like Google and Twitter?      Suppose Twitter were to ban President Trump for violating their terms of use (which has has done).   would this be an acceptable impact on society in the US?

EnjoyIt

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Re: Inequality: the long view
« Reply #216 on: July 01, 2017, 03:53:54 PM »
But I meant to write about inequality.

Extreme inequality is bad because it's bad for society.    The very wealthy have great control over other people.   They can influence elections to their benefit.   They can undertake large scale monopolistic strategies.   And so on.

Is there some other way to reduce extreme inequality other than extreme taxation?    and is taxation sufficient on it's own?

And what about huge corporations like Google and Twitter?      Suppose Twitter were to ban President Trump for violating their terms of use (which has has done).   would this be an acceptable impact on society in the US?

I can be wrong, but I think what failed is previous societies was not that the rich where rich, but that the poor were hungry. The Romans knew what they were doing.  The people were poor, kinda hungry so they distracted them with entertainment, but eventually the people were hungry and the empire fell.  Same for the French revolution.  It occurred because the people were starving.  The thing about America is that no one is starving, people have shelter, people have medical care.  People even have some luxuries in their life as well as distraction from creating upheaval via the media, Twitter, Facebook and such.  I just don't see the pitchforks coming in this scenario.

The rich controlling our politics is completely true.  The other side of the coin can occur though. If the government has enough dependents on it, eventually those dependent overshadow the non dependent population and are able to vote in laws that keep helping themselves.  It is no different that the politician who votes themselves a wage increase. So there must be some balance between the two.  A line which is attributed to Benjamin Franklin but may belong to someone else, "When people find that they can vote themselves money, that will herald the end of the republic."  This goes to both sides, the filthy rich and the dependent.

scottish

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Re: Inequality: the long view
« Reply #217 on: July 01, 2017, 05:56:56 PM »
But I meant to write about inequality.

Extreme inequality is bad because it's bad for society.    The very wealthy have great control over other people.   They can influence elections to their benefit.   They can undertake large scale monopolistic strategies.   And so on.

Is there some other way to reduce extreme inequality other than extreme taxation?    and is taxation sufficient on it's own?

And what about huge corporations like Google and Twitter?      Suppose Twitter were to ban President Trump for violating their terms of use (which has has done).   would this be an acceptable impact on society in the US?

I can be wrong, but I think what failed is previous societies was not that the rich where rich, but that the poor were hungry. The Romans knew what they were doing.  The people were poor, kinda hungry so they distracted them with entertainment, but eventually the people were hungry and the empire fell.  Same for the French revolution.  It occurred because the people were starving.  The thing about America is that no one is starving, people have shelter, people have medical care.  People even have some luxuries in their life as well as distraction from creating upheaval via the media, Twitter, Facebook and such.  I just don't see the pitchforks coming in this scenario.

The rich controlling our politics is completely true.  The other side of the coin can occur though. If the government has enough dependents on it, eventually those dependent overshadow the non dependent population and are able to vote in laws that keep helping themselves.  It is no different that the politician who votes themselves a wage increase. So there must be some balance between the two.  A line which is attributed to Benjamin Franklin but may belong to someone else, "When people find that they can vote themselves money, that will herald the end of the republic."  This goes to both sides, the filthy rich and the dependent.

I was going to challenge you to find an example of this, when I remembered that in Ontario we have a bit of a problem with the affordability of our public sector unions.   Our premier (equivalent to a governor) recently agreed to a substantial wage increase over 4 years.   "Now that the budget is balanced" she said, "we can afford to spend some money."    First, we can afford to spend money when the debt has reached nominal zero levels, not the deficit.   Second, there's an election coming up next year and the public service unions are big supporters.

FrugalToque

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Re: Inequality: the long view
« Reply #218 on: July 02, 2017, 07:11:39 AM »
This has gone on long enough and is generating way too much non-constructive commentary and way too many moderation requests.

Locking