The Off Topic Topic

[Sheilbh]

Yeah, I don't see how this fits.  He and I were discussing successful entrepreneurship as a function of good governance.  Inherited wealth doesn't enter into the function.

So what's a good metric of being able to take a good idea (or ability) and turn it into money? Because the obvious ones I could think of that aren't based on social mobility could also just indicate that the US is a good environment to make lots of money once your good idea is up and running? I feel like those metrics would probably also show Ireland, the Netherlands and Luxembourg were the most entrepreneur friendly locations in Europe which I'm not sure is right.

Do you need a good idea to become a salaried professional such as a doctor or lawyer?  I say no.

Agree. That's why I added ability. So maybe wealth mobility?

[Admiral Yi]

Its attacking common objections to high tax rates.

So presumably you agree with my objection that labeling the cartoon "progressive taxes" is misleading.  It's not about progressive taxes.

A big one of these you see is people who don't get that there is no way you'll be worse off than someone on $79k if you earn $81k and a higher tax rate kicks in at 80. A lot of people just don't get this. I suspect a lot of people pretend not to get it too.
The second is the temporarily embarrassed millionaire fallacy. A lot of people who will never earn anything near 80k are worried about the money they'll earn over that amount. They think of themselves as rich even if they are not and will never be.
The third is the fallacy that this is something new and never seen. Usually closely linked in with the "Everyone will just move to another country!" fallacy.

I don't think the 2nd and 3rd are common objections to raising the top tax rate at all.  I have never heard or read about a single person saying "we have never had rates this high historically."  I purposely left the 1st one out of my criticism because the concept of higher taxes on marginal income could potentially be confusing, although again, I have never seen this objection to high rates on rich people raised before.

In other words, they're straw men.  They're objections the cartoonist wishes people had raised.

[Threviel]

Reasonably confident, but it's untestable, because this is one of those things that can have a billion confounding variables.

I only see two variables: level of welfare spending and % of self made rich people.  What other variables do you think apply?

I think it would be hard to find a Wiki article that gives us a definitive answer, but I offer as evidence the fact that the US has far more billionaires than Europe, and that the US has generated far more world dominating new companies than Europe.

www.businessinsider.com/countries-ranked-by-billionaires-in-proportion-to-population-2015-7%3famp

Sweden and Norway have more billionaires per capita than the US.

[Admiral Yi]

So what's a good metric of being able to take a good idea (or ability) and turn it into money? Because the obvious ones I could think of that aren't based on social mobility could also just indicate that the US is a good environment to make lots of money once your good idea is up and running? I feel like those metrics would probably also show Ireland, the Netherlands and Luxembourg were the most entrepreneur friendly locations in Europe which I'm not sure is right.

There are good metrics and there are easily available metrics, as I mentioned in my response to DGulller above.

[Threviel]

https://www.shorex.com/tel-aviv-and-israel-become-worlds-best-startup-ecosystems-per-capita-but-a-word-of-caution-on-startup-rankings/

Also the US is good on startups per capita, but not best.

I'd argue that US companies world domination is due to language and legacy from when US economy was extremely far ahead of everyone else. The gap is closing.

[Sheilbh]

So what's a good metric of being able to take a good idea (or ability) and turn it into money? Because the obvious ones I could think of that aren't based on social mobility could also just indicate that the US is a good environment to make lots of money once your good idea is up and running? I feel like those metrics would probably also show Ireland, the Netherlands and Luxembourg were the most entrepreneur friendly locations in Europe which I'm not sure is right.

There are good metrics and there are easily available metrics, as I mentioned in my response to DGulller above.

How about this one? Happy to have a rummage if you can think of any good metrics


Though I would query billionaires per capita - noting Liechtenstein = number 1

[Syt]

Apparently this was shared by right wingers as anti-left meme:



Online overall reaction was, "That looks absolutely lovely. "

[Malthus]

The second set of panels would make more sense if it was split into two ideas.

One: you won't reach the highest tax bracket unless you make a lot of money (this varies a lot by country of course). So it will hardly make a beggar of you.

Two: progressive taxation has had little impact on social mobility. Despite progressive taxation, most people (not all, but most) who earn a high income, have parents who also had a high income. Again, this will vary by nation.

I agree with point 1.  But the issue with point 2, in the US at least, is that there really isn't a progressive tax anymore (Warren Buffet famously complained his secretary pays more tax) and that is one of the causes of low social mobility in the US.

This will vary by nation, but throughout the West social mobility is a concern. From what I understand of the literature, there existed various theories about how the 'progressivity' of income taxation would affect social mobility: one was that more progressive income taxation would *reduce* social mobility, as there would be less incentive to attaining higher income levels. I don't think that is true at all, and the evidence seems to support that it is not true. Allegedly, income tax policy doesn't have much impact one way or the other on social mobility.

However, tax policies concerning various types of taxes on wealth do have an effect. As of course do decisions on how the tax money is spent (particularly, social support for women having kids, education, etc.). Society playing a part in the costs of child-raising in various ways seems the most important factor, otherwise the wealthy will always have the intergenerational advantage. 

https://www.urban.org/sites/default/files/publication/31201/1001165-tax-and-spending-policy-and-economic-mobility.pdf

Hence, a progressive tax system is reasonably neutral on social mobility.

[crazy canuck]

This will vary by nation, but throughout the West social mobility is a concern. From what I understand of the literature, there existed various theories about how the 'progressivity' of income taxation would affect social mobility: one was that more progressive income taxation would *reduce* social mobility, as there would be less incentive to attaining higher income levels. I don't think that is true at all, and the evidence seems to support that it is not true. Allegedly, income tax policy doesn't have much impact one way or the other on social mobility.

Yeah, when I was poor and going through university in hopes of making a better life, the possibility that a high paying job would mean I would pay more tax did not concern me or cause me to hesitate.

However, tax policies concerning various types of taxes on wealth do have an effect. As of course do decisions on how the tax money is spent (particularly, social support for women having kids, education, etc.). Society playing a part in the costs of child-raising in various ways seems the most important factor, otherwise the wealthy will always have the intergenerational advantage. 

https://www.urban.org/sites/default/files/publication/31201/1001165-tax-and-spending-policy-and-economic-mobility.pdf

Hence, a progressive tax system is reasonably neutral on social mobility.

I agree that much turns on how the state spends the tax money it receives.  For example you could have the misfortune of living in a country without universal free health care.  That would certainly reduce social mobility even if a progressive tax system existed.

[garbon]

My point is its pretty taken as fact that boomers lived in a time when opportunities were plenty and the poor could get rich with hard work and a bit of good luck. These days... you need major luck.

What does that have to do with objections of having hard earned money taken away? It also seems to assume that would be a complaint only from wealthier individuals. People, in general, don't deserve the money that they make?

[Admiral Yi]

How about this one? Happy to have a rummage if you can think of any good metrics

Though I would query billionaires per capita - noting Liechtenstein = number 1

I was wrong about relative number of billionaires and I stand corrected.

However, at the risk of being perceived as a total backsliding weasel, what we are really talking about is ratio of self made/entrepreneurial rich, not rich per se.

[Sheilbh]

However, at the risk of being perceived as a total backsliding weasel, what we are really talking about is ratio of self made/entrepreneurial rich, not rich per se.

That was why I was interested in the social mobility data.

And it is very changeable about 5 years ago the UK had the highest number of billionaires per capita but a number of those were Russian oligarchs or Indian billionaires who are predominately resident in the UK. So I don't think it necessarily indicates much.

Edit: And it fell dramatically once Putin made clear he didn't want Russian oligarchs spending all their time in London (and relations soured post-Salisbury). Off the top of my head Usmanov and Abramovich both left London as their main residence.

[Oexmelin]

Why is the amoral existence of billionaires a data point on the topic of social mobility?

[Admiral Yi]

That was why I was interested in the social mobility data.

I agree that there is some connection between movement from average to high income and entrepreneurship.  Whereas movement from low to high is going to be more about education and training (and using family connections to snag a government sinecure :p).

[Josquius]

I don't think the 2nd and 3rd are common objections to raising the top tax rate at all.  I have never heard or read about a single person saying "we have never had rates this high historically."  I purposely left the 1st one out of my criticism because the concept of higher taxes on marginal income could potentially be confusing, although again, I have never seen this objection to high rates on rich people raised before.

In other words, they're straw men.  They're objections the cartoonist wishes people had raised.

I see them all the time. Poor people who vote conservative tend not to be the smartest.

My point is its pretty taken as fact that boomers lived in a time when opportunities were plenty and the poor could get rich with hard work and a bit of good luck. These days... you need major luck.

What does that have to do with objections of having hard earned money taken away? It also seems to assume that would be a complaint only from wealthier individuals. People, in general, don't deserve the money that they make?

You'd think that.... but no. You hear that complaint a lot from people who aren't, and never will, be rich.