I remember when a $64,000 question was a seriously hard question that you had to go in a sound-proof booth to answer. — unenlightened

Right. $64,000 questions are now handled at walk-up kiosks on busy streets.

Do you think some kind of scheme should be put into place to help minimum wage workers in later life? I do. Maybe open up a pension/saving scheme to set up like I said? Good idea or bad idea? — I like sushi

That’s fine. Most people can’t afford to invest in stocks or save “5%” a month. Most are in debt up to their eyes. So how does it get done? How about we pay them more?

Again, real wages have stagnated. Which is why you have more debt— which is why you have people living paycheck to paycheck. To remark that “hey if you can’t beat them, join them” and that it’s “easy,” is just ignorant. Especially given the context of this thread.



This applies to some people. But look at the general trend. You know well enough that real wages have flatlined since the late 70s. That’s a robust explanatory data point. Telling people to thrift or wherever— yeah, it’s just not realistic in the context of 37% of Americans not being able to afford a $400 emergency:

Households survey released Monday, some 37% of Americans lack enough money to cover a $400 emergency expense, up from 32% in 2021.

https://fortune.com/2023/05/23/inflation-economy-consumer-finances-americans-cant-cover-emergency-expense-federal-reserve/amp/

That being said — I’m in favor of consuming less and financial education.

Well if he's got billions in income, he's theoretically paying income tax. — LuckyR

Yes:

Bezos paid zero federal income taxes in both 2007 and 2011. From 2006 to 2018, when Bezos' wealth increased by $127 billion, he reported a total of $6.5 billion in income. He paid $1.4 billion in personal federal taxes, a true tax rate of 1.1%.

https://americansfortaxfairness.org/wp-content/uploads/ProPublica-Billionaires-Fact-Sheet-Updated.pdf

When it says his wealth increased, that means his Amazon stock increased in value. That's not income or even real money until he sells the stocks.

where do the loan repayments come from? — LuckyR

I could explain some of it, but won't.

Do you think some kind of scheme should be put into place to help minimum wage workers in later life? I do. Maybe open up a pension/saving scheme to set up like I said? Good idea or bad idea? — I like sushi

Good idea on paper. I would like an automatic benefit plan for minimum wage. The good argument is, the retail and food sectors really need people to work at low wage. They need people to stay at that level. The bad argument is, any employment benefits, including health coverage, is part of the compensation package. That is, you need to include that in the calculation of their overall compensation. So, the cost to the employers is much higher than the actual per hour rate. Labor is one of the most expensive costs in running a business. (Don't worry, come staff reduction, the highly compensated employees are always the ones being scrutinized. But this is for another topic).

The problem is, pension doesn't always mean people can make ends meet. One, if they're married, they need to stay married so that money can go along way -- one household only. The ones who can afford to be alone in retirement are those that were highly paid during their active working years (not minimum wage).

Second, shit can happen to anyone. Irresponsible money handling can still lead to broke-ass life despite the high income production.

This can be a good topic on a separate thread.

... real wages have flatlined since the late 70s. That’s a robust explanatory data point. — Mikie

Absolutely true.

And for families that have stable but insufficient income and expenses they can not defer or live without, like feeding, housing, and clothing themselves and their children; day care and pre-school (which enables both partners to work); medical expenses; car payments and house payments, savings isn't an option. Add on to that student loan payments and credit card payments. At this point for many families, frugality is not optional, it is mandatory. Savings accounts are just wishful thinking.

However, not everyone who is working class is equally distressed. Single workers and working couples without children have a better chance of getting ahead financially. The trap many fall into is that as their income increases, so does their spending. They are spending more, presumably living better, but still not saving anything, maybe running out of cash before the next payday. This trap captures professional class members also. Frequent flights, trips to Europe, better food and alcohol, fashionable clothing and larger dwellings -- it's easy to outspend the family's combined salaries.

I am well aware that the people in the bottom two deciles of the income distribution are pretty much screwed economically, no matter what they do. They either can not get work, can not get work with an adequate wage, or have too little income and overwhelming expenses (like from chronic disease or natural disaster),

The solution for everyone in the bottom 9 deciles is a greater share of the GDP pie. Who gets the biggest pieces of pie is a matter of POLICY, not talent, luck, prudent investing, or any such thing. Since the 1970s, policy makers have been steering the pie slices to the top decile of income and the very top layer of wealth, the richest .0001%. 90% of us are dividing up a couple of small pieces and arguing over the crumbs.

shit can happen to anyone — L'éléphant

No comment to add, just felt that this truism needed to be repeated for the benefit of those to whom shit hasn't happened yet.

I was suggesting that the government should award automatic investments for low income. Given the inbuilt aversion to social care in the US I imagine things won’t change anytime soon. The battle for social care in the UK is pretty scary too … but at least there is a semblance of it there still.

Yes, I am ignorant about US. If the majority of people in the US are literally living to pay check to pay check I imagine the US economy will collapse soon enough. I do know that the richest nations have the largest degree of poverty compared to its counterparts. That is the nature of economic growth.

I do question the ‘survey’ that states that over 50% are living pay check to pay check btw. Sounds a little obscure how they acquired this data.

Yes, I am ignorant about US. — I like sushi

That’s fine — so then why come to this thread, which is mostly about how the wealthy avoid paying taxes — and go on about how people should simply save more money, as if it’s easy to become “one of them”?

How is that anything but a Marie Antionette-like dismissal of the plight of the 90% of Americans who are getting screwed?

I do question the ‘survey’ that states that over 50% are living pay check to pay check btw. — I like sushi

Maybe apply equal skepticism to feelings, without a basis in fact whatsoever. I have a number of other sources, if interested.

Frequent flights, trips to Europe, better food and alcohol, fashionable clothing and larger dwellings -- it's easy to outspend the family's combined salaries. — BC

Sure. I heard it called “lifestyle creep.” I like that. As your salary increases, so does your spending— so you remain even, or even get into debt. But you don’t save and don’t invest.

Who gets the biggest pieces of pie is a matter of POLICY, not talent, luck, prudent investing, or any such thing. Since the 1970s, policy makers have been steering the pie slices to the top decile of income and the very top layer of wealth, the richest .0001%. 90% of us are dividing up a couple of small pieces and arguing over the crumbs. — BC

:100:

The Earned Income Tax Credit is a nice way of redistributing wealth.

Uummm... there's no such thing as a "true" tax rate, including paper gains on investments.

I can tell by your attitude you are not at all interested in discussion so bye bye

How is that anything but a Marie Antionette-like dismissal of the plight of the 90% of Americans who are getting screwed? — Mikie

can tell by your attitude you are not at all interested in discussion so bye bye — I like sushi

It’s true I’m not interested in discussing ignorant comments. Bye.

Uummm... there's no such thing as a "true" tax rate, including paper gains on investments. — LuckyR

They explain their calculations. The term “true tax rate” is not a technical term.

The story’s main finding was that these 25 people saw their worth rise a collective $401 billion from 2014 to 2018 while paying a total of $13.6 billion in federal income taxes. That amounts to what we called a “true tax rate” of 3.4%.

Below, we’ve laid out how we performed this analysis. Our story also included calculations of more typical American households in order to provide context for the ultrawealthy’s numbers, and we explain those here as well.

https://www.propublica.org/article/how-we-calculated-the-true-tax-rates-of-the-wealthiest

Anyway: the wealthy don’t pay as much in taxes, and in fact sometimes avoid paying anything at all. Especially on capital gains, which are already lower than what an average person pays in taxes as a percentage of income. It’s currently capped at 20% — but as the OP discusses, that’s often avoided completely.

And it’s exactly where they house most of their wealth. They borrow off of it, and then pass it off to kids or spouse tax-free. Hence “buy, borrow, die.”

The Earned Income Tax Credit is a nice way of redistributing wealth. — RogueAI

Economic disasters have a proven track record.

Hmm... As an aside, I've come across a few that have mentioned they "game the system" for own gain (including on the forum), though on a much smaller scale (I assume). They good, those others bad...?


(my emphasis)

None of those are things we can do. That's the point. they're all things government can do.

Things we can do; — Isaac

4. vote differently (known as democracy :wink:)

But some folks work hard to vilify and stigmatize the word "socialism" and anything they can associate with that. One place to start, to put up a fight? :fire: (This wouldn't amount to vilifying and stigmatizing the word "capitalism" and anything that might be associated with that.)

4. vote differently (known as democracy :wink:) — jorndoe

I shouldn't think voting differently would be a good idea since I expect the people included in the 'we' already vote for the more progressive candidate.

It's not our votes that are the problem. It's the others'

Voting is just a snapshot of the way the electorate feel at the time about the candidates and their policies. It's like taking a photograph. More participation just gives a more accurate snapshot to the returning officer, but it doesn't actually change anything about the way things are with the populace. They still think what they think, make the choices they make... You've just let the returning officer know in a bit more detail what that is.

Real change requires changing that reality, changing the way people actually think and behave, so that next time there's an election, the photo looks better.

True, but he is able to borrow against the value and spend what he has borrowed. So, it's like he has sold the stock, functionally anyhow, but he doesn't have to pay taxes on it.

The problem here goes beyond just tax avoidance though. Human ability tends to follow a roughly normal distribution. Wealth follows a power law distribution. This gets down to the issue of returns on capital generating a system where inequality expands if positive action isn't taken.

I would generally never want to invoke anything that the CCP does as an example to follow, but they do indeed seem to get around this somewhat by making themselves owners, often majority owners, of large firms, allowing them to essentially put these capital gains to public use. That and they get to place folks on the boards and direct company policy based on public needs.

Of course, the net effect isn't good because the Chinese system is incredibly opaque, unaccountable, and open to abuse. Nor is it even really needed for the CCP to have leverage. Jack Ma, the Chinese Bezos, began giving some pretty mild critiques of the CCP re: liberalizing the finance sector... and then he disappeared for months. Obviously, this is not the way to do things, but there is something interesting about the idea of firms that are "large enough," being partly owned by the public (or by the workers at said firms, having unions on the boards, something done in Germany, etc.)

In any event, the labor share of all income in developed countries has been trending down for half a century now. We will probably see over 50% of all income go to capital in the medium term. This is bad news for places with high wealth inequality. E.g., American income inequality is not nearly as bad as wealth inequality, where the top 1% owns 15+ times the share of the bottom 50%, and 90+% of all stocks and bonds are owned by the top 10%. AI will probably also have the effect of making returns on capital outpace wage growth.

True, but he is able to borrow against the value and spend what he has borrowed. So, it's like he has sold the stock, functionally anyhow, but he doesn't have to pay taxes on it. — Count Timothy von Icarus

My point was that if we want to tax Bezo's wealth, we'll have to have a progressive federal property tax. Income tax wouldn't do it.

The problem here goes beyond just tax avoidance though. Human ability tends to follow a roughly normal distribution. Wealth follows a power law distribution. This gets down to the issue of returns on capital generating a system where inequality expands if positive action isn't taken. — Count Timothy von Icarus

So far, the main force resulting in redistribution is the occasional economic collapse, like the Great Depression. Those events reset everything. I've lately started thinking that leftism has always been a kind of cultural phantom. It appears to be there, but it's not real. All of the victories assigned to the left were actually the result of various catastrophic events. Or maybe I just have the apolitical blues.

Obviously, this is not the way to do things, but there is something interesting about the idea of firms that are "large enough," being partly owned by the public (or by the workers at said firms, having unions on the boards, something done in Germany, etc.) — Count Timothy von Icarus

We have the postal service. :razz: And we have a heavily regulated financial industry.

In any event, the labor share of all income in developed countries has been trending down for half a century now. — Count Timothy von Icarus

That may be true, but most of us aren't doing that badly. We aren't starving, for the most part. We don't live in shanty towns unless we particularly want to. I guess my question would be: what really is the problem we're hoping to fix?

We will probably see over 50% of all income go to capital in the medium term. This is bad news for places with high wealth inequality. E.g., American income inequality is not nearly as bad as wealth inequality, where the top 1% owns 15+ times the share of the bottom 50%, and 90+% of all stocks and bonds are owned by the top 10%. AI will probably also have the effect of making returns on capital outpace wage growth. — Count Timothy von Icarus

So we have incredibly rich people in the world. Is that an evil unto itself? Or is it that we need those funds to help people who are actually starving? How are you looking at it?

That may be true, but most of us aren't doing that badly. We aren't starving, for the most part. We don't live in shanty towns unless we particularly want to. I guess my question would be: what really is the problem we're hoping to fix?

I would aspire to something greater than simply not having people starving in the street. IMHO, the main purpose of the state is to promote the freedom of its citizens. No state is secure when its people are unhappy, and a free people will not willingly choose what makes them unhappy. America in particular suffers from an artificial division between the public and private spheres, which is itself born of a conception of freedom that focuses too much on negative freedom, and not enough on reflexive freedom and social freedom.

To quickly define these terms:

Negative Freedom is defined by a subject’s freedom relative to the external world. It is freedom from external barriers that restrict one’s ability to act.


Reflexive Freedom is defined by subject’s freedom relative to themselves. To quote Hegel, “individuals are free if their actions are solely guided by their own intentions.” Thus, “man is a free being [when he] is in a position not to let himself be determined by natural drives.” i.e., when his actions are not subject to contingency. Later philosophers have also noted that authenticity, and thus the free space and guidance needed for us to discover our authentic selves, is another component of reflexive freedom.


Social Freedom is required because reflexive freedom only looks inward; it does not tie individual choices to any objective moral code. This being the case, an individual possessing such freedom may still choose to deprive others of their freedom. (This the contradiction inherent in globalizing Nietzsche’s “revaluation of all values”). Since individuals will invariably have conflicting goals, there is no guarantee than anyone will be able to achieve such a self-directed way of life. Negative freedom is also contradictory because “the rational [reflexive] can come on the scene only as a restriction on [negative] freedom.” E.g., being free to become a doctor means being free to choose restrictions on one’s actions because that role entails certain duties.

Social Freedom then is the collective resolution of these contradictions through the creation of social institutions. Institutions, the state chief among them, objectify morality in such a way that individuals’ goals align, allowing people to freely choose actions that promote each other’s freedom and wellbeing. Institutions achieve this by shaping the identities of their members, such that they derive their “feeling of selfhood” from, and recognize “[their] own essence” in, membership.”


In the language of contemporary economics, we would say that institutions change members’ tastes, shifting their social welfare function such that they increasingly weigh the welfare of others when ranking “social states.” In doing so, institutions help resolve collective action problems.

We are free when we do what it is that we want to do, and we can only be collectively free when we are guided into supporting one another's freedom.

“My particular end should become identified with the universal end... otherwise the state is left in the air. The state is actual only when its members have a feeling of their own self-hood and it is stable only when public and private ends are identical. It has often been said that the end of the state is the happiness of the citizens. That is perfectly true. If all is not well with them, if their subjective aims are not satisfied, if they do not find that the state as such is the means to their satisfaction, then the footing of the state itself is insecure.”

This and all quotes above from Hegel's Philosophy of Right.

So we have incredibly rich people in the world. Is that an evil unto itself?

Yes. For two reasons.

1. There is ample evidence that high levels of economic inequality lead to a greater risk of state capture by those with wealth. In our system, wealth can buy you political power and political influence, which in turn allows the wealthy to countermand the interests and expressed policy preferences of the vast bulk of the population.

I don't buy into narratives that "the rich decide everything," in modern democracies. Far from it, the rich are often divided between each other on most salient political issues; they have differing opinions on social issues, abortion, religion, etc. However, when they do agree on issues, against the preferences of the lower and middle class, they get their way more often than not.

Further, great concentrations of economic power have a corrosive effect on the rule of law (e.g., a wealthy heir in upstate New York getting probation in a plea deal involving the rape of four different minors versus people being made felons and losing their voting rights over driving without a license), make tax collection more difficult (when money is more concentrated, it is harder to tax and tax evasion efforts better funded), and generally tends to degrade regulation. Higher inequality also seems to track with lower levels of "trust busting," and an increase in oligopolies achieving monopoly profits. Greater inequality also tends to lower social mobility; the rich are more likely to stay rich, the poor less likely to rise.

2. Inequality itself is bad because human being naturally judge themselves based on those around them; we are naturally hierarchical. Hierarchy isn't necessarily bad; divisions that are too deep are.. To put it in psychological terms, I agree with Hegel that private property plays an important role in objectifying our will to ourselves and others. Think about how you learn things about someone from the books they display in their book case, or why teens blanket their rooms in posters. But when a great deal of people's total wealth adds up to essentially nothing compared with a small cadre of elites, their property becomes irrelevant to objectifying their will.



https://www.cambridge.org/core/journals/perspectives-on-politics/article/testing-theories-of-american-politics-elites-interest-groups-and-average-citizens/62327F513959D0A304D4893B382B992B

https://www.vox.com/2014/4/18/5624310/martin-gilens-testing-theories-of-american-politics-explained

[quoteOr is it that we need those funds to help people who are actually starving? How are you looking at it?[/quote]

This too. In the American context, we see that seniors are the demographic group least likely to live in poverty. Children are the group most likely to live in poverty. Extending a stipend similar to Social Security for children, something we tried briefly during the pandemic, could go a long way. Moreover, we have $31+ trillion in debt that needs to be paid off, and ballooning deficits to pay for existing programs for seniors. At the same time, there aren't many good places to cut. Liberals like to go after defense spending, but as someone who watches defense policy closely I think the last thing we want to do is see less investment in the Pacific fleet. China is commissioning twice the tonnage in warships as the US and commissions over 100 times more commercial tonnage, almost more than the rest of the world combined (commercial shipping is a good indication of naval "surge production" potential during a war). Programs like the NGAD fighter, B-21, and Ford Class supercarriers are crucial for deterrence and avoiding a war, especially as China's rather professional leadership elite is eroded by Xi's play to be emperor in all but name.

I would aspire to something greater than simply not having people starving in the street. IMHO, the main purpose of the state is to promote the freedom of its citizens. No state is secure when its people are unhappy, and a free people will not willingly choose what makes them unhappy. America in particular suffers from an artificial division between the public and private spheres, which is itself born of a conception of freedom that focuses too much on negative freedom, and not enough on reflexive freedom and social freedom. — Count Timothy von Icarus

Lincoln's vision of freedom was about social mobility. Masters may be happy, but they aren't free because they're cemented into a particular role by law. In a free society, people can choose the role they wish to invest their spirits in. But roles are like robots: they're pre-programmed to some extent. You have to surrender to a role in order to engage the world and secure your own well-being.

A prime example of people who lost sight of their spirits is the German soldiers at the Nuremburg trials, who defended their actions by saying they were soldiers. Soldiers do what they're told. Soldier is a role, and it's correct that they do what they're told, but a human being can withdraw from the role of soldier and invest in some other. So identifying entirely with a role can result in a failure to take responsibility for one's actions.

For Lincoln, slavery wasn't evil because it made people suffer. He believed suffering is just part of any life. What made slavery evil was that it blinded people to their potential and to their responsibility.

I'm not sure if this definition of freedom fits with your analysis. It's true that free people, in Lincoln's sense of the word, choose the paths that they believe are right. If that's what you mean by "free people will not willingly choose what makes them unhappy", then we're in agreement.

ocial Freedom then is the collective resolution of these contradictions through the creation of social institutions. Institutions, the state chief among them, objectify morality in such a way that individuals’ goals align, allowing people to freely choose actions that promote each other’s freedom and wellbeing. Institutions achieve this by shaping the identities of their members, such that they derive their “feeling of selfhood” from, and recognize “[their] own essence” in, membership.”


In the language of contemporary economics, we would say that institutions change members’ tastes, shifting their social welfare function such that they increasingly weigh the welfare of others when ranking “social states.” In doing so, institutions help resolve collective action problems.

We are free when we do what it is that we want to do, and we can only be collectively free when we are guided into supporting one another's freedom. — Count Timothy von Icarus

Maybe if you gave some real-life examples, I might understand this better. As it stands, I really have no idea what it means.

So we have incredibly rich people in the world. Is that an evil unto itself?

Yes. For two reasons.

1. There is ample evidence that high levels of economic inequality lead to a greater risk of state capture by those with wealth. In our system, wealth can buy you political power and political influence, which in turn allows the wealthy to countermand the interests and expressed policy preferences of the vast bulk of the population.

2. Inequality itself is bad because human being naturally judge themselves based on those around them; we are naturally hierarchical. Hierarchy isn't necessarily bad; divisions that are too deep are.. To put it in psychological terms, I agree with Hegel that private property plays an important role in objectifying our will to ourselves and others. Think about how you learn things about someone from the books they display in their book case, or why teens blanket their rooms in posters. But when a great deal of people's total wealth adds up to essentially nothing compared with a small cadre of elites, their property becomes irrelevant to objectifying their will. — Count Timothy von Icarus

I see what you're saying, this is what I'm seeing, though.

1) The wealthy don't need to control the US government to control the US population. They control us because they can take their jobs somewhere else if we want to play hardball. This is globalization. You can't make Americans happier by attacking the wealthy because that will increase poverty. In other words, I think the solution you're reaching for would have to be global. It would require a global government. There isn't one.

Thanks so much for your post. It was a really interesting read.

, nah, we = voters

nah, we = voters — jorndoe

If @Mikie had the ear of {all voters} then there wouldn't even be a problem in the first place. He's talking to those who agree there's a problem - what can 'we' do about it. Those who don't agree obviously aren't going to do any of those things are they, because...you know...they don't agree.

Telling people who don't agree there's a problem what steps they can take to solve the problem seems more than a little daft.

So no. The only question to consider is what those of us who agree there's a problem can do about it, and if we're outnumbered by those who don't agree there's a problem, then voting is pointless, we already know we're going to lose, there's nothing to be gained by giving the returning officer a more accurate picture of the scale of that loss.