The Incredible Shrinking Incomes of Young Americans

[Richard Hakluyt]

One thing I think is a problem is when you have unproductive grazing land going for 10k per acre. That's just stupid. We'll all be eating Chinese cloned warehouse meat at that rate.

Maybe we should dump fifty million acres of public land on the market at rock-bottom rates.

We have to get away from these ultra-low interest rates, the distortions are getting worse every year.

[katmai]

Just had a quick tot-up and I think I've spent a net USD 2,000 on cars. 

I spent $0 fin the acquisition of my cars until two months ago :blushing:

[Eddie Teach]

Just had a quick tot-up and I think I've spent a net USD 2,000 on cars. 

I spent $0 fin the acquisition of my cars until two months ago :blushing:

GTA: Anchorage?

[Tamas]

But most countries have had a progressive tax system and they still have rich people left so that doesn't seem to solve piketty's problem

[Rex Francorum]

It's good for them to be averse to auto loans.  Save up and buy cars in cash.

Or buy no car

[garbon]

It's good for them to be averse to auto loans.  Save up and buy cars in cash.

Or buy no car

Pretty piss poor Americans then.

[Valmy]

But most countries have had a progressive tax system and they still have rich people left so that doesn't seem to solve piketty's problem

I thought the problem Piketty was exposing was that owning shit is so much more of an effective wealth accumulating tactic than working. Just the existence of rich people was not the issue.

[Valmy]

It's good for them to be averse to auto loans.  Save up and buy cars in cash.

Or buy no car

Coureur des bois like Rex prefer canoeing through the back country.

[Tamas]

But most countries have had a progressive tax system and they still have rich people left so that doesn't seem to solve piketty's problem

I thought the problem Piketty was exposing was that owning shit is so much more of an effective wealth accumulating tactic than working. Just the existence of rich people was not the issue.

I was being sarcastic, and hinting at the fact that wealth accumulation, even wealth accumulation resulting in extreme differences between top and bottom is not evil incarnate: somebody needs to build those factories and offices to make meaningful work in, you know.

But of course I realise its more complicated than that, and we have plenty of distorted policies around helping the rich get richer.

[crazy canuck]

But most countries have had a progressive tax system and they still have rich people left so that doesn't seem to solve piketty's problem

I thought the problem Piketty was exposing was that owning shit is so much more of an effective wealth accumulating tactic than working. Just the existence of rich people was not the issue.

I was being sarcastic, and hinting at the fact that wealth accumulation, even wealth accumulation resulting in extreme differences between top and bottom is not evil incarnate: somebody needs to build those factories and offices to make meaningful work in, you know.

But of course I realise its more complicated than that, and we have plenty of distorted policies around helping the rich get richer.

Probably because you missed the point which in turn is probably because Marti has mangled Picketty's argument so badly.  Again, Piketty's problem isn't that there are wealthy people. He expressly says so in his book.  His concern is income disparity which in turn reduces social mobility which in turn reduces the legitimacy of the whole system.

I agree, that capital is required to build the economy.  Nobody but Marti is claiming that capital itself is evil.  The problem is that the ability to accumulate capital is becoming restricted to a diminishing group of people at the high end of the income earners.  If income is taxed progressively there is a lot more incentive to build wealth through capital investment (so those factories get built) rather than spending the resources of companies on high executive compensation.

[Tamas]

Good point and I would agree. I am just worried that in effect it would be just an incentive against chasing a higher salary/income, and/or for tinkering with tax avoidance.

[crazy canuck]

Good point and I would agree. I am just worried that in effect it would be just an incentive against chasing a higher salary/income, and/or for tinkering with tax avoidance.

I am not sure why one should be concerned about a person seeking to earn 108 million a year instead of just 100 million a year - or for that matter 10 million a year.  I think we should be a lot more concerned about people making a median income not being able to save.  High income earners are not going to stop working because their taxes go up.  They just wont enjoy as much capital accumulation as they once did if a real progressive tax is introduced.  As for tax avoidance - that is why the tax code needs to deal equitably with all forms of income.

[Tamas]

Ok but is it REALLY going to make a huge difference in a country's economy if we do a bit of extra tax for the super rich? there can't be that many of them.

[crazy canuck]

Ok but is it REALLY going to make a huge difference in a country's economy if we do a bit of extra tax for the super rich? there can't be that many of them.

Picketty would say the answer is yes with the proviso that the tax code and enforcement deal effectively with tax evasion.

But even if there is evasion Picketty's other answer is that at least there would be some increased tax revenue which can be spent on providing better opportunities for social mobility by providing better education (something he emphasizes) and something he didn't address directly but I think is important - universal single payor health care.   Although I hasten to add that at least in the US they don't need more tax revenue to implement universal health care.  Their government already spends more per capita then we do on their system.  Changing it would likely save their government money which can in turn be invested in education.

Also you would remove the perverse incentive for large managerial pay packages and redirect those resources into growing companies instead.

[Tamas]

I could be wrong but my impression has been that one of the reasons for obscene managerial bonuses and such is that basically -to a degree- the people deciding ont hem are the ones receiving them. If not directly, then their immediate collegaues/circle.

And while I support the intention, one thing you learn by living in an overcomplicated Byzantine law environment, is that if people want to do something, they will find a way.
The best we can do is avoid incentivising it. You cannot stop it and probably can't really slow it down beyond that.