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U.S. billionaires worry about the survival of the system that made them rich

53 pointsby westonabout 6 years ago

13 comments

lisperabout 6 years ago
There is a super-simple solution to this problem: a progressive tax on income, wealth, and most importantly, inheritance (with an exemption for private businesses below a certain size that are both owned and administered by a single family).<p>Another possibility: eliminate private ownership of land. This is actually not as radical as it sounds. It&#x27;s a big shift in mindset, but not that big a change in how things actually work. The mindset shift is to go back to the native american idea that all land is collectively owned by the people. The government is the &quot;management company&quot; that administers it, and one of the things it can do is offer long-term leases. This would essentially be the same as the status quo except that instead of owning the land and paying property tax, you&#x27;d own a lease and pay rent. The reason I think this would have a beneficial effect is that the change in mindset would change the dynamics of political debates. For example, NIMBYism would be less tenable because it&#x27;s not your back yard any more. You&#x27;re just a tenant.
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gpsxabout 6 years ago
I&#x27;d agree income inequality is a problem, but I think what is specifically bothering people is that they feel they don&#x27;t have the opportunity to make more. Once someone has money they can use it to help themselves and &quot;hold down&quot; others. (I put that in quotes because it might be a little exageration, but I think people feel that way.)<p>There are many examples but a the most basic one in the US is that the outcome of a trial is highly correlated with the amount of money you spend on lawyers.<p>A problem with Khanna and the article is that he is just continuing to give outsize influence to the rich. I hope he can learn something from Sanders and not worry too much about &quot;alienate(ing) some of his wealthiest backers&quot;.
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zcw100about 6 years ago
There’s too much to work with so I’ll just pick out this little gem, “Khanna said, but too many of them felt locked out of the country’s economic future and were looking for someone to blame.”<p>Too many? How many is too many? So only 20% if the population feeling locked out would be a okay?<p>Feel locked out? So it’s just in their heads? The unwashed masses are so emotional. Like animals they go on feelings not facts.<p>Looking for someone to blame? Their baseless feelings need some outlet and if they’re blaming me it must be just because I happened to walk down the street that day, not because of anything I actually did.<p>The truth is they don’t feel locked out, they are locked out and after giving people like this guy a pass for three decades are finally looking for the reason they’ve been getting screwed over and this guy is scared shitless they’re going to find it.<p>The sad part is it’s not going to happen. More likely thing is they’ll have to part with 0.000001 of their wealth to make 5% of the population winners and just get them to oppress the other 95% thus ensuring a healthy return on that 0.00001 making them even richer. They’ll just have to get over the humiliation of having to share their success with a few extra people.
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_bxg1about 6 years ago
My worry with UBI as a replacement for work is that it relies on the continued altruism of the elite, with no balancing force keeping the status-quo. Despite its problems, properly-functioning capitalism keeps the few accountable to the many. Billionaires can only throw their weight around up to a point, because at the end of the day they rely on regular people to keep their economic engine going. They need us for our economic value, which gives us power. If that became no longer the case, democracy itself could be abolished, with no consequence to those at the top. Capitalism has many problems, and doesn&#x27;t work on its own, and certainly needs fixing in 2019, but I think it&#x27;s also the lynchpin maintaining any status quo at all between elites and everyone else.<p>Now, this also assumes that people become literally useless in the automated future, compared to systems. It&#x27;s possible - if unlikely - that humans always move on to a higher frontier of uniquely human work once the previous one becomes automated. In that scenario, UBI could be a great way to ride that transition. Also, <i>partial</i> UBI, meant only to give people a platform for growth in a world that still has jobs for them, could be a good way to combat economic inequality.
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didibusabout 6 years ago
I&#x27;m going to say something most likely naive, but I always thought that democracy needed a ladder reset. If online games need to in order to keep the competition healthy and the game fair, why not real life?<p>Now, how you&#x27;d go about doing it, I have no idea.
jammygitabout 6 years ago
Honest question: we have unlimited examples of corporations run amok. What examples of law abiding billionaires run amok have we lately? I&#x27;m sure they exist but all I can think of is funding ventures that harm the public good (eg, taking all the nice beach front property, lobbying for oil and gas subsidies, legal bribery, or in an extreme case funding extremist organizations).<p>Most of the excesses seem to be a matter of not outlawing bad things. Is the wealth itself actually harming anybody?<p>Edit: I guess there is the snowball effect where previous winners have competitive advantages in new competitions, or else outright rent seeking behaviours. I&#x27;m also curious about those aspects.
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hliyanabout 6 years ago
I&#x27;ve been thinking about the following scheme, primarily in the context of a science fiction novella plot:<p>1. Income is not taxed. <i>Wealth</i> is.<p>2. Wealth tax brackets are determined based on a multiplier: no one person may own more than 1000 times the median per capita wealth.<p>3. Wealth is not actively monitored. But undeclared wealth is not protected by law.<p>What would the implications of this scheme be?
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jayalphaabout 6 years ago
Related<p>Human and nature dynamics (HANDY): Modeling inequality and use of resources in the collapse or sustainability of societies &#x2F;Safa Motesharrei a,⁎, Jorge Rivas b, Eugenia Kalnay c<p>Summary Collapses of even advanced civilizations have occurred many times in the past five thousand years, and they were frequently followed by centuries of population and cultural decline and economic regression. Although many different causes have been offered to explain individual collapses, it is still necessary to develop a more general explanation. In this paper we attempt to build a simplemathematicalmodel to explore the essential dynamics of interaction between population and natural resources. It allows for the two features that seemto appear across societies that have collapsed: the stretching of resources due to strain placed on the ecological carrying capacity, and the division of society into Elites (rich) and Commoners (poor). The Human And Nature DYnamical model (HANDY)was inspired by the predator and prey model, with the human population acting as the predator and nature being the prey. When small, Nature grows exponentially with a regeneration coefficient γ, but it saturates at a maximum value λ. As a result, the maximum regeneration of nature takes place at λ &#x2F; 2, not at the saturation level λ. The Commoners produce wealth at a per capita depletion rate δ, and the depletion is also proportional to the amount of nature available. This production is saved as accumulated wealth, which is used by the Elites to pay the Commoners a subsistence salary, s, and pay themselves κs, where κ is the inequality coefficient. The populations of Elites and Commoners grow with a birth rate β and die with a death rate α which remains at a healthy low level when there is enough accumulated food (wealth). However, when the population increases and the wealth declines, the death rate increases up to a famine level, leading to population decline. We show how the carrying capacity – the population that can be indefinitely supported by a given environment (Catton, 1980) – can be defined within HANDY, as the population whose total consumption is at a level that equals what nature can regenerate. Since the regrowth of Nature is maximum when y = λ &#x2F; 2, we can find the optimal level of depletion (production) per capita, δ* in an egalitarian society where xE ≡ 0, δ∗∗(≥δ∗) in an equitable society where κ ≡ 1, and δ<i></i>* in an unequal society where xE ≥ 0 and κ N 1. In sum, the results of our experiments, discussed in Section 6, indicate that either one of the two features apparent in historical societal collapses – over-exploitation of natural resources and strong economic stratification – can independently result in a complete collapse. Given economic stratification, collapse is very difficult to avoid and requires major policy changes, includingmajor reductions in inequality and population growth rates. Even in the absence of economic stratification, collapse can still occur if depletion per capita is too high.However, collapse can be avoided and population can reach equilibrium if the per capita rate of depletion of nature is reduced to a sustainable level, and if resources are distributed in a reasonably equitable fashion.
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angel_jabout 6 years ago
Here&#x27;s an idea for billionaires: &quot;invest&quot; in things that only break even at best and don&#x27;t beset the economy with future rent-keeping. Get yr money back, or further tax breaks. For instance, affordable housing.
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moominabout 6 years ago
Perhaps they should stop trying to kill it, then.<p>People often confuse the needs for working markets (capitalism) with preserving the elite’s position (rent-seeking).
RickJWagnerabout 6 years ago
At present, the US has near record low unemployment, rising wages, and a very high stock market.<p>Yet we also have many thousands homeless.<p>Truly, capitalism is the worst form of government. Except for everything else, which share the downsides and lack the upside. It&#x27;s why there are tens of thousands pouring over the border monthly-- to get to America and to capitalism. They want to work for their chance.
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cletusabout 6 years ago
Up until probably WW2, war and revolution were the ultimate redistributor of wealth and arguably mitigated or even prevented too much concentration of wealth. Arguably in some cases that concentration is what precipitated wars and revolutions.<p>I worry about this now, particularly in what&#x27;s increasingly a post-nationalism era with almost frictionless global capital mobility. The ultra-rich do their damnedest to pay almost no taxes on their massive wealth and buy themselves even greater tax breaks. The Trump tax &quot;cuts&quot; (I say this because for many professionals living in blue states it was a tax increase) were such a nakedly self-serving (even corrupt) wealth grab at the expense of the country. It&#x27;s depressing how easily manipulated the GOP base was and is in supporting this (or at least not holding their representatives to account).<p>What difference does it make if you have $50B in assets vs $60B? I mean really?<p>You gained that wealth because you lived in a country that was politically stable, had infrastructure like roads and bridges and wasn&#x27;t being invaded or fighting wars (mostly). Someone needs to pay for that.<p>This almost feels like an algal bloom of wealth. In an algal bloom, individual organisms are finding local optima. The net result however is that everything dies.<p>So how about this:<p>1. We need stronger estate taxes. Inherited wealth is a recipe for a permanent ruling class and a pox on our house.<p>2. Owning land in the US subjects your worldwide income to US taxes.<p>3. We need to start property taxing income rather than taxing spending. This further lowers effective tax rates.<p>The last one requires a little explanation. Let&#x27;s say you earn $100m in a year. As ordinary income this may cost you $40m in taxes. Of course, no one pays that. It&#x27;s typically structured so you only earn income for tax purposes when a gain is realized.<p>So if you need &quot;only&quot; $20m to live this year instead you just realize a $20m gain and pay taxes on that, leaving the other $80m untaxed. It&#x27;s worse than that because not all of that $20m will be a gain. This allows you to offset tax liabilities essentially indefinitely.<p>But it gets even worse than that. At the height of the QE era, you could borrow money for essentially nothing. So instead you borrow $25m, putting $5m aside to service the debt for some number of years and don&#x27;t realize any income and pay no taxes whatsoever. Companies were issuing corporate bonds like crazy in this era to avoid US corporate taxes.
tarr11about 6 years ago
When robots are sentient enough to do most human work, won’t they require the same rights and benefits that humans do?