The richest 1% took home nearly twice as much wealth as the rest of the world put together over the past two years.
If that doesn’t convince you wealth inequality is out of control, I don’t know what will.
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@rbreich You have your priorities mixed up... people making more than everyone else, no matter the extent is **not** the issue. It only detracts from the real issue, which is the quality of living of the poorest people below the poverty line.
Wealth is not a pie, a fixed thing with only so much to go around. One person having more does **not** mean someone else has to have less. Wealth is something constantly being created and destroyed, the real question is why arent the poor able to create wealth.
@freemo @rbreich I'll push back on this one, if only because I don't want to look at my dynamic programming assignment 😂
I agree wealth inequality itself isn't the problem; however, I don't think the market is good at assigning value judgements to things, which leads to a whole bunch of really screwed up stuff, and the subsequent conflation of benefiting from capitalism with worshiping mammon.
For example: the CCP has been torturing religious and ethnic minorities for decades, mass surveilling their people, murdering political dissidents, and *MOST IMPORTANTLY TO INVESTORS* preventing individuals or corporations from withdrawing assets from the country "illegally". Yet, our investors, companies, etc. speculate that China is "the next big thing" and lose their asses while enriching a hostile country. People continue investing in Nestle and Tesla despite the provable child labor in their supply chains, (and of course the rest of the atrocities Nestle got away with). Why? Because making an extra 2% ROI is all that matters.
Meanwhile, private equity firms in the US buy up failing companies for pennies on the dollar, try to squeeze *every* *last* *drop* of capital out of them, and cause lasting damage in the process (see the environmental damage caused by rail issues across the US, alongside the mess of our hospitals, many of which are owned by private equity). Their M.O. is to run things so lean, and to cut so many corners, that the business fails anyway, but at least they didn't let any of that money go to the worke- I mean-down the drain.
The impacts of our modern values in relation to money go on and on, because nearly everyone has a price but not a spine: they'll sell out their employees and the business they built up to get rich, and leave the people they employ in the hands of a board who never sees them, and frankly doesn't care about them at all. For most, it's not about loyalty, purpose, effecting change in the world, and eking out a living (even a good one!) in the process; it's solely about the number of 0s on the check. It's so bad to the point that peoples lives and finances are ruined for "shareholder value", while disregarding the people who actually generated value for the company and the economy.
Finally, the reasons that the poor "cannot create wealth" is that often it is taken from them while the wealthy are given kickbacks in an almost perverse way: banks charge more fees for lower account balances, accessing credit with lower APY is more difficult, etc. Of course much of this boils down to financial literacy, but when a single car accident can bankrupt a family due to exorbitant healthcare coverage, adversarial insurance companies can screw anyone who can't sue them (by not paying out), etc, it's easy to see that there are not enough legal protections for the impoverished when the penalties for victimizing them are a pittance or even nonexistent.
So while I can agree that money *itself* isn't the problem, the modern "idolatry" of it is such a perverting influence that people conflate the two, because frankly it's difficult not to.
>"Finally, the reasons that the poor "cannot create wealth" is that often it is taken from them while the wealthy are given kickbacks in an almost perverse way... "
The most deleterious way in which money flows from the poor to the wealthy is through the unfair tax system with all of its exemptions and deductions. To determine a "fair" tax rate, i.e. one in which everyone pays the same rate on all economic activity, you need to divide tax revenue (about $4T / year) by all economic activity, i.e. every dollar that changes hands (estimated about $1600T / year). That works out to a tax rate of .25%. That's right, if we fairly taxed every dime of economic activity -- every time a dollar changes hands -- instead of carving out loopholes for the rich, everyone would pay a tax rate of .25%. But under the current corrupt system the poor and working class pay 30-50%, while the wealth often pay nothing.
>"There is an issue, and part of that is how we treat money, sure.. the point is wealth inequality simply isnt an issue and hurts no one itself."
Wealth inequality is an issue and it does hurt people when it is so great that some people can't afford the basics, like shelter, food, transportation, healthcare. And it's a huge issue when it is the result of government intervention on behalf of the wealthy -- distorting markets while leaving more people in desperation.
Turning over more control to the government as a response to this situation will only make it worse because government policies (which are ultimately determined by the wealthy) are what have gotten us into this mess in the first place.
I think some form of robust Basic Income, like a Universal Basic Income for those who need it, along with a fair tax system that politicians can't touch, is a sustainable way to alleviate the suffering.
I actually disagree there, the tax system is rather fair and pretty heavily taxes the rich. Most of the perceived issues here come about from meme that just arent accurate and a lack of accounting knowledge... but I digress, we can agree to disagree here.
What I do want to say is that the real problem is more about how lax we are about anti-trust laws (monopoly busting laws), thats where the real issues lie, the tax itself is fine.
The top tax rate is about 50% counting national and state taxes (give or take a few percentage points.. I would consider that a fairly aggressive tax rate, and there are few places in the world with a higher one.
Usually where people debate is the tax cuts people can get under certain circumstances. Those cuts, however, are availible to everyone and usually (with a few exceptions) rather fair.
As for a source on that, i mean a quick google search will give you tax rates by bracket so not sure what you want sourced.
I am refering to the USA
Yes you can pay no taxes as well if you do what these large companies do (I pay no taxes quite often despite making well over a million most years and the same was true when i was making much less)... As I said its largely due to a misunderstanding of taxes on your part that 1) you dont know how to structure it so you can get those deals and 2) You dont understand why it is fair since you dont understand the mechanisms at play.
A simple example of how you can do this is to work as a 1099 worker (as opposed to w-2) and ensure your expenses exceed your profit. You can even manage this if your expenses are things you spend on growing your career (for example expenses on training, and other resources).
When companies pay near 0 its usually because of just that, they spent all their profit on growth, the money taken out by the owners (usually at dividends) is still taxed normally however so the owners arent getting a free ride. This has the consequence however of the company growing and thus int he future making even more profit (hopefully) and in turn paying even larger taxes differed into the future.
@freemo @Pat @johnabs @rbreich The "how to structure" you are referring to is not available to everyone.
Put simply: even if this kind of deal is available in all other contries, it is not sustainable.
Even if you suppose everybody did it successfully, the infrastructure would collapse (faster than it is now), since there is no tax money to pay upkeep from.
But that everyone did it is not realistic, even if you ignore infrastructure: some people are not able to finess this, and i would severely doubt that every job would be open to such workers.
To companies investing in growth: i doubt that too. It would not be sustainable from an ecological perspective, so even what they do spend on growth is harmful, but a lot goes into other channels, i'm pretty sure.
How do you explain the upshoot of billionaires if they spend all their profit on growth? Magic?
The “how to structure” you are referring to is not available to everyone.
The structuring absolutely is ava8ilible to everyone. The problem is taking such a structure has inherently more risks.. more risks mean potential for more rewards, the same risks companies take in the first place… but yes, everyone can choose to operate under a 1099 as long as they are willing to take the risk that they might not find clients and dont have a garunteed income stream (just like any company risks).
Put simply: even if this kind of deal is available in all other contries, it is not sustainable.
Even if you suppose everybody did it successfully, the infrastructure would collapse (faster than it is now), since there is no tax money to pay upkeep from.
Again no, this is because you dont understand how it works. You are under hte impression that big companies pay 0 taxes forever, they dont.. They have years where they pay very low taxes and then years they pay extremely high taxes, in the end it blaances out and over long periods we see fair tax rates.
Take Amazon as an example, in 2018 everyone was livid and screaming about how they pay 0 taxes (in fact slightly negative, they got taxes back)… But then they ignore the years they pay extremly high taxes, for example just a few years earlier in 2014 Amazon paid an effetive tax rate of a whopping 91.7%! If you average their tax rate from 2014 to 2018 to create a more fair picture their tax rate would be about 22%, which is a pretty reasonable amount when you consider corperations undergo double-taxation (that 22% is ON TOP of the huge tax rate the owners see when they take money out for themselves).
So yes, the world is quite sustainable at those rates.
But that everyone did it is not realistic, even if you ignore infrastructure: some people are not able to finess this, and i would severely doubt that every job would be open to such workers.
Of course not every job allows it, most people dont WANT it because those benefits come with risks. In a w-2 job you have a garunteed income, garunteed work, fixed hours, etc.. as a consequence you dont get to expense things and cant get the sort of cuts a 1099 can get on taxes. Likewise someone on 1099 saves on taxes but risks having access to fewer clients and no garuntees on income (just as amazon has no garuntee on income)… Companies take risks and get certain advantages in taxes, you have the option to take the same risk, some cant, thats fair.
To companies investing in growth: i doubt that too. It would not be sustainable from an ecological perspective, so even what they do spend on growth is harmful, but a lot goes into other channels, i’m pretty sure.
Thats a seperate issue, obviously growth can be good (generates wealth makes everyone and economies healthier) or bad (they can destroy ecosystems, etc)… We need to ensure the proper laws are in place that companies cant grow in ways that are harmful… but that is outside of the scope of taxes for the most part.
How do you explain the upshoot of billionaires if they spend all their profit on growth? Magic?
I never said they spend all their money all the time on growth.. The years they pay 0 taxes are either spent on growth or they had legitimate losses. But as i explained many other years they pay huge tax rates well above baseline. In the end it averages out. The years they spent little or nothing on taxes is not every year, some years they profit and pull money out, on those years rich people become richer, and they also spend a lot on taxes (remember the double taxation above).
@freemo @Pat @johnabs @rbreich
“The problem is taking such a structure has inherently more risks”
Exactly. Not everyone has the same ability to take risks. Some have more support than others, if someone with no backing from family for example tried this, they are much more likely to end up poor and in debt. Your assertion that “everyone” could do it is a romantization, not a fact.
“in the end it blaances out and over long periods we see fair tax rates.”
Can you source this in a way that actually goes over more than a specific example? First time i have heard of that and the results we see are not consistent with it. Even if Amazon payed high taxes one time, your assertation that winnings are always invested in growth is not consistent with bezos being a billionaire.
“just as amazon has no garuntee on income”
That is not how it works. With the power they have, they can do things to guarantee income not available to everyone. A nice example is their practice of ripping off successfull items and placing them higher. You did say that monopoly regulation is lacking and this is dependant on having a quasi-monopoly, but the “no guarantee” is just not consistent over company size.
Exactly. Not everyone has the same ability to take risks. Some have more support than others, if someone with no backing from family for example tried this, they are much more likely to end up poor and in debt. Your assertion that “everyone” could do it is a romantization, not a fact.
Yup and that is absolutely fair.. take the risks and have flexibility in when you pay taxes and some breaks on how much… or dont take the risk and pay a fixed rate… absolutely fair and the risks companies take are open to everyone.
Moreover its structered, in fact, that middle-class people have a huge advantage over big companies. People can start a class of corperations limited to only smaller companies (companies with caps on who and how many investors they can have). Basically smaller companies can avoid the double-taxzation i mentioned above while large companies cant.
So yes having the choice of stability vs risk, and each having their own set of advantages is absolutely fair.
Can you source this in a way that actually goes over more than a specific example? First time i have heard of that and the results we see are not consistent with it. Even if Amazon payed high taxes one time, your assertions that winnings are always invested in growth is not consistent with bezos being a billionaire.
I do not have a source off hand other than the one example I already gave you. I just looked up the amazon tax record to get you that info, you are welcome to look up other big companies tax data and see the pattern for yourself.
I also never said the winnings are always invested, I made it clear that is not the case… also im skeptical of the whole “results we see is not consistent with it”… the results we see absolutely are consistent with it, chances are you just arent looking at the actual data and are instead relying mostly on memes, and gossip which paints a very biased and inaccurate picture… Do what I just did, go out and pull up some raw tax data and look for yourself.
That is not how it works. With the power they have, they can do things to guarantee income not available to everyone. A nice example is their practice of ripping off successful items and placing them higher. You did say that monopoly regulation is lacking and this is dependent on having a quasi-monopoly, but the “no guarantee” is just not consistent over company size.
Large companies fall all the time, the idea that they are so powerful they cant fail is not born out by the history… think of how many mega-corperation house hold names that no longer exist or barely exist today.
That said you arent entirely wrong, we do have a problem with monopolies and as I’ve said before I do feel we need strong anti-trust laws (monopoly busting laws).. but as I have also said before thats not an issue with the taxes, its an issue with monopolies.
And people who start with nothing have a pretty sweet deal on taxes too… they get negative taxes… That is not only do they not pay taxes, they get free money, free healthcare…. Sounds pretty fair to me, from a tax perspective.
You are of course right there is an unfairness in the world that is unrelated to taxes that make it so some people cant get a good start in life.. This is an open problem that needs fixing, but you have given no indication that this problem is at the fault of the tax system in the USA or any other country for that matter.
@freemo @admitsWrongIfProven @Pat @johnabs @rbreich I once again have a yt video for y'all!
https://youtu.be/kXCGbAv8YPw
Vox has a bunch more on the topic:
https://youtu.be/t6V9i8fFADI
https://youtu.be/k1vE_LVBx4s
@freemo
>”Those cuts, however, are availible to everyone and usually (with a few exceptions) rather fair.”
Yes, workers choose not to take those tax breaks. Just the other day I was in Walmart and I asked the cashier if she was going to take the Stranded Well Development Credit on her assets located on federally leased land. She said she was choosing not to because all of her energy assets are structured under a holding company that just took some huge write-offs due to some recent acquisitions, so she was pushing the well credits to future quarters.
You see? Workers choose not to take those tax breaks.
@admitsWrongIfProven @johnabs @rbreich @thomas_oe