This criticism of Saez and Zucman is extremely important. The media has latched onto their studies because it fits certain talking points. But their conclusions are far from universally accepted among economists.<p>More importantly, regardless of what side of the aisle you are on, you have to appreciate that these measurements are not simple, and are based on choices that are not obvious. Saez and Zucman, for example, exclude transfer income like the earned income tax credit from income. Under their methodology, even a very redistributionist economy, such as one with a high guaranteed minimum income, would look unequal because those transfer payments aren’t included in income.<p>How you measure things changes the results. Measuring pre-tax income shows inequality growing. Measuring income after taxes and transfers shows it growing slower. Measuring consumption shows it more or less stable since the 1960s: <a href="https://voxeu.org/article/consumption-and-income-inequality-us-1960s" rel="nofollow">https://voxeu.org/article/consumption-and-income-inequality-...</a>. There are good reasons to consider each of these measures. (Though I’d argue that measuring consumption is the most relevant to every day well being.)
This completely misses the political angle. Someone with 1 billion in liquid assets can affect the political landscape more than 1,000 people with 1,000,000$ in assets. Similarly to how someone making 50 million per year has more than 1000x the disposable income of someone making 50k/year.<p>That’s what’s corrosive about wealth inequality. It’s why the marginal tax rate declines at very high incomes. It’s not about doctors vs landscapers because doctors don’t have political power relating to wealth.
There are definitely problems with most wealth tax proposals, but I think the author understates the generational differences in opportunity that emerge from massive wealth inequality. As I stated in another thread, perhaps the best solution would be to combine the two for a wealth-based income tax. If you're already worth 20M, should you be paying a higher rate on your 500k in interest than if you just sold your first company for 500k and previously had nothing? I think that's a reasonable way to address income inequality in the long run without forcing people to liquidate assets, especially those like Elon Musk who have most of their wealth tied into companies they actively manage or people whose entire net worth is tied up in historical family properties.<p>The current system is broken, but mostly because the income/capital gains tax/AMT need to be graduated on a far different system than today. Right now, making 510k places a single person in the top federal tax bracket, while there are people making 10,000 times that some years. If there isn't a high bracket that is rarely achieved in practice (10B+/year for example), then the brackets are probably broken. Right now we have a sharp cliff where it is very difficult to become a millionaire, but once you get a few million it becomes far easier to multiply wealth.
John Cochrane makes some very good points on measurement errors by Saez and Zucman and how much of what they're measuring is actually reduced interest rates.<p>I wish that progressives used a similar framework that they did 100 years ago--to tax unearned income (land rents, monopolies, windfalls) while encouraging earned income. If you care about unearned vs earned income, then it does make sense to try to tax the asset holders whose assets ballooned in value due to reduced interest rates over the past decade.
Question for the group.<p>Working backwards, what percent of GDP do you think should be taxed by the local+state+federal government? Relatedly, what % of GDP should be spent by the government each year?<p>Right now the US spends 36% and taxes 32%. That.. seems pretty reasonable to me? Maybe a little high tbh. I definitely don't think the government should be spending more than 50%.<p>I'm curious what other folks think. Working backwards, what should total spending/taxes look like? Then how do you get there?
Tax income over a longer time window, and you get closer to a wealth tax without all the problems.<p>The longer the time window, the more it is a wealth tax.
Is there a tl;dr or any context whatsoever?<p>There's absolutely no introduction or conclusion to this article that tells me what the author is trying to explain, or what angle he's taking or why.<p>Also this is "part II" of a 3-part article... I'm curious if there's a reason I'm missing as to why this is being submitted instead of parts I or III?<p>I'm just 100% lost here... :S If anyone could help explain the context for this submission, it would be much appreciated.
Option one. $400,000 retirement.
Purchase BTC, claim a loss after it moves down even 0.03% in most places of the world, move to bermuda, convert BTC to Bermudian dollar, pay 0% income and 0% federal tax.
Purchase property, enjoy golf courses and beaches all day.<p>Option two. $350,000 retirement.
Go to Thailand, get a beach house, and live off the currency conversion rate, enjoy the beach.<p>Option three. Personal favorite. $900,000
Leverage XAU/USD based on fundumentals alone at 70x leverage in week long swing trades, averages per trend about $10k a week per $100k on 70x leverage. (PrimeXBT is a great low fee place)<p>Other fantastic investments are buying vending machines and putting them in laundromats, cost $3,200 for one and to stock it and they average $600 a month.
Buy a functional AirBNB with a loan.<p>Sources to look at, Robert Kiyosaki's 4 business quadrants.<p>Remember, wealth does not have to be a number, its not all about money, its about freedom. Best of luck from a BTC millionaire, ~wolf