Wealth acquisition and distribution?

[MikeF]

Yes. And no, as it is much easier to cap (or better, tax) the excess money than to try to prevent the money from doing what it shouldn't. It's better to tackle the problem by the root.
But if there was a method to reclaim democracy without a cap or excess wealth tax, that is easier to implement the taxes, then I'd go for that.

Certainly a fair and appropriate tax system should be in place, whatever that may entail. The idea of caps seems much more problematic to me. What arbitrary number marks the line of having "too much". How does the cap address differences in the cost of living across regions in the same country or even the same state or region within a country. If the same amount of money gets you a McMansion, swimming pool, and golf club membership outside of a major metropolitan area, yet only affords you a small apartment or a WWII era bungalow within a major metropolitan area, how is it fair if the national cap prevents anyone from owning either?

Perhaps you will respond by saying the cap would naturally be higher, that it would be high enough to allow ownership of at least one residence in the most expensive areas, but that means there are still people with a lot more money than other people, and if money equates to influence in the political process, then that unfair advantage will still exist yet you've thrown a wrench in the existing system, affecting the flow of capital and market pricing.

I still think it would be better to focus on reducing or eliminating the relationship between money and political influence or power, as well as eliminating policies that unfairly shelter or enhance the advantages inherent in wealth building for those with assets beyond a certain level. No cap on wealth, but no shelter of wealth from appropriate taxation over a certain level. I would also favor tax free savings with no limits or strings attached for folks under some level of net worth as a means of encouraging saving and wealth building within the middle and lower economic classes.

 

[MikeF]

Where do you think all these homeless people were HIDING before? And of if they were all just hiding somewhere out of sight and out of mind before, HOW DOES THIS IN ANY WAY MITIGATE THE FACT THAT THEY EXIST?? Who or what is forcing them out of hiding??

Hmmm. I don't think you actually read what I write. I do believe I have more than acknowledged that there are homeless and that being homeless sucks. ETA: Nor have I said that nothing should be done to solve the homeless problem. You have claimed this problem that has existed since the formation of civilizations is currently growing and accelerating in the US and that the US is now equivalent to a third world country, and it is these claims, and these claims only that I do not find credible.

As to "forcing [the homeless] out of hiding", I would say it is more likely a matter of no longer forcing the homeless *into* hiding and permitting them to congregate in larger groups. In other words, the police are no longer running them off.

 

[Heyo]

Certainly a fair and appropriate tax system should be in place, whatever that may entail. The idea of caps seems much more problematic to me. What arbitrary number marks the line of having "too much". How does the cap address differences in the cost of living across regions in the same country or even the same state or region within a country. If the same amount of money gets you a McMansion, swimming pool, and golf club membership outside of a major metropolitan area, yet only affords you a small apartment or a WWII era bungalow within a major metropolitan area, how is it fair if the national cap prevents anyone from owning either?

Perhaps you will respond by saying the cap would naturally be higher, that it would be high enough to allow ownership of at least one residence in the most expensive areas, but that means there are still people with a lot more money than other people, and if money equates to influence in the political process, then that unfair advantage will still exist yet you've thrown a wrench in the existing system, affecting the flow of capital and market pricing.

I still think it would be better to focus on reducing or eliminating the relationship between money and political influence or power, as well as eliminating policies that unfairly shelter or enhance the advantages inherent in wealth building for those with assets beyond a certain level. No cap on wealth, but no shelter of wealth from appropriate taxation over a certain level. I would also favor tax free savings with no limits or strings attached for folks under some level of net worth as a means of encouraging saving and wealth building within the middle and lower economic classes.

I don't favour a cap either, as I have stated in my first post on this topic. A progressive tax is the best way to cap income. Important is that all income gets taxed the same, no lower taxes on capital gain. (Maybe a higher tax, but that is too utopian.) And no loopholes.
I could live with a wealth distribution as it were in the '70s. Not ideal, but acceptable. The problem is that the gap has ever increased since then. The rich got richer, and everyone else hasn't gained anything since then. No "trickle down" or "high tides raise all boats". The system is broken.
And lack of taxation is part of the reason.

 

[Koldo]

Where you see little competition, I find
much. Prices & quality of services overall
have gotten better, eg, ride sharing vs taxis.

This is mostly the government's fault here in Brazil. The government limits the number of taxi drivers and makes it costly to be a taxi driver, then sets a high value for a ride.

Has government service gotten cheaper &
better?

Here in Brazil, most services provided directly by the goverment are free at the point of use. The big exceptions being the mail service provides by a public company called Correios and a public bank called Caixa. It is tricky to evaluate both services for a few reasons.

Correios delivers in the entirety of Brazil, even at places where it wouldn't be economically profitable by charging a bit extra at capitals and reducing the price for other places. This means that depending on where you live Correios may provide a good balance of quality and price. As for Caixa, it is a rather bad bank as far as owning a regular account goes (bad technology and bad customer service), however it offers the lowest rates for house loans. Plus, the goverment pushes Caixa into handling multiple different governamental programs, overloading it with work.

My property taxes rise inexorably.
Services funded by them remain the same,
which is actually an unexpected wonder.
They're still bad though, eg, policing, courts,
roads.

Here in Brazil, policing and roads are not technically funded by taxes. Just to provide an example of how it works: If you own a car here you ought to pay an yearly tax called IPVA. Most drivers think that this tax is related to road maintenance, but legally it is not. Property taxes here are completely unrelated to the government providing any service in particular.

Remember just a few years ago when leftish
RF posters predicted collapse of the internet
if government didn't impose "neutrality"?
They didn't.
It didn't.
The internet value for me has only become
more cost effective.

Here in Brazil, internet neutrality is legally mandatory and the internet value for me has also become much more effective. I wonder how much your perceived benefit related to the downfall of the neutrality.

 

[Koldo]

Certainly a fair and appropriate tax system should be in place, whatever that may entail. The idea of caps seems much more problematic to me. What arbitrary number marks the line of having "too much". How does the cap address differences in the cost of living across regions in the same country or even the same state or region within a country. If the same amount of money gets you a McMansion, swimming pool, and golf club membership outside of a major metropolitan area, yet only affords you a small apartment or a WWII era bungalow within a major metropolitan area, how is it fair if the national cap prevents anyone from owning either?

Perhaps you will respond by saying the cap would naturally be higher, that it would be high enough to allow ownership of at least one residence in the most expensive areas, but that means there are still people with a lot more money than other people, and if money equates to influence in the political process, then that unfair advantage will still exist

The purpose of creating a cap is not to eliminate the gap, but rather to reduce it. Let not the perfect be the enemy of the good.

yet you've thrown a wrench in the existing system, affecting the flow of capital and market pricing.

Do you see any negative consequence?

I still think it would be better to focus on reducing or eliminating the relationship between money and political influence or power, as well as eliminating policies that unfairly shelter or enhance the advantages inherent in wealth building for those with assets beyond a certain level. No cap on wealth, but no shelter of wealth from appropriate taxation over a certain level. I would also favor tax free savings with no limits or strings attached for folks under some level of net worth as a means of encouraging saving and wealth building within the middle and lower economic classes.

But how would you go about reducing or eliminating the relationship between money and political influence or power? What do you propose?

 

[Revoltingest]

This is mostly the government's fault here in Brazil. The government limits the number of taxi drivers and makes it costly to be a taxi driver, then sets a high value for a ride.



Here in Brazil, most services provided directly by the goverment are free at the point of use. The big exceptions being the mail service provides by a public company called Correios and a public bank called Caixa. It is tricky to evaluate both services for a few reasons.

Correios delivers in the entirety of Brazil, even at places where it wouldn't be economically profitable by charging a bit extra at capitals and reducing the price for other places. This means that depending on where you live Correios may provide a good balance of quality and price. As for Caixa, it is a rather bad bank as far as owning a regular account goes (bad technology and bad customer service), however it offers the lowest rates for house loans. Plus, the goverment pushes Caixa into handling multiple different governamental programs, overloading it with work.



Here in Brazil, policing and roads are not technically funded by taxes. Just to provide an example of how it works: If you own a car here you ought to pay an yearly tax called IPVA. Most drivers think that this tax is related to road maintenance, but legally it is not. Property taxes here are completely unrelated to the government providing any service in particular.



Here in Brazil, internet neutrality is legally mandatory and the internet value for me has also become much more effective. I wonder how much your perceived benefit related to the downfall of the neutrality.

Hmmm....I won't be moving to Brazil.

 

[Kfox]

You might now say that we cap the amount private people can invest so that it harms the economy indirectly,

If you cap the amount a private person can invest in a company, it won’t harm that company indirectly, it will be direct harm to that company that depends on investors in order to survive. This will harm the company, and when you have company after company hurt this way, it will hurt the economy.

but 1. it's not that we burn the money, it's still there,

Still where? If the private citizen is not allowed to invest the rest of his money in the company, where does it go? Stuffing his mattress? This has the same effect as burning it because the money will become devalued by inflation. Also let's say the cap is $10 million, so a person invests $10 million, and due strictly to share price increase, the wealth grows to $20; do you take half of his shares away from him and spend it so he's back to $10 million? What happens if the next year the price drops and he goes down to $5 million; or less? Do he get his original shares back so he's back to $10 million? How is this done if the money is already spent?

and 2. we cap the amount single people have on the economy.

No you are capping the amount a single company can have on the economy by making that company weaker due to lack of outside investment. When you make company after company weaker this way, it has an effect on the economy

Wealth that can be used to select who gets a chance at research and development is inherently undemocratic.

Companies are not supposed to be run according to the rules of democracy. The only people who should have a say in how the company is run are those invested in it; only their vote should count.

 

[MikeF]

The purpose of creating a cap is not to eliminate the gap, but rather to reduce it. Let not the perfect be the enemy of the good.

I'm saying that the cap is not even good. Capping wealth at some specified point is anathema to how the system functions. Let's say we cap wealth at 10 million dollars. Then imagine I'm a 28 year old who invents a product that takes off and I reach the wealth cap of 10 million in 3 years. Now, everything I earn after that point above living expenses would be confiscated so as to not exceed the cap. Everything. Now let's imagine all the wasteful ways in which those at the cap will spend their annual surplus cash simply to have had the benefit of it before it is confiscated.

I also do not see a cap realistically being applied in all countries at the same time around the globe. Safe havens will spring up in which the wealthy and their corporations leave their cap country with as much of their operations to safe haven countries, probably to the point of changing citizenship to avoid the cap.

ETA: Also, what if a single asset exceeds the cap and one is forced to sell the asset when they do not wish too. Who will be able to buy it? Even if a single asset doesn't exceed, assets in the portfolio may increase in a good year such that one is forced to sell some. Then, if the market drops in a year or two, you where forced to give up assets that in only a year you would have been able to hold on to.

I just think the whole cap idea is impossible.

Do you see any negative consequence?

Obviously since I specifically mentioned them in what you quoted when I said, "yet you've thrown a wrench [the cap] in the existing system, affecting the flow of capital and market pricing."

I also highlight the problem of the cap not being applied globally, in my comments above.

But how would you go about reducing or eliminating the relationship between money and political influence or power? What do you propose?

I would start with campaign finance reform. However, in the US, we have to overcome the SCOTUS decision that essentially equates spending money with protected speech. I don't know if that means convincing the court to overturn that ruling or amending the Constitution itself. All of which are nearly impossible it seems, just as passing a wealth cap would be. Perhaps things have to become much more intolerable before such changes can take place.

I would also consider ways of making more parties viable and hence increasing competition in the political arena. Ranked choice voting might be a great start at giving real life to alternative parties. With multiple parties filling both sides of the house, there would be much more need to compromise and form coalitions (assuming one party doesn't always maintain over 50% of the members), extreme voices would be marginalized within a single party among multiple parties giving a greater opportunity for moderate voices to gain traction and support elections. Or at least that is my speculation.

 

[Koldo]

I'm saying that the cap is not even good. Capping wealth at some specified point is anathema to how the system functions. Let's say we cap wealth at 10 million dollars. Then imagine I'm a 28 year old who invents a product that takes off and I reach the wealth cap of 10 million in 3 years. Now, everything I earn after that point above living expenses would be confiscated so as to not exceed the cap. Everything. Now let's imagine all the wasteful ways in which those at the cap will spend their annual surplus cash simply to have had the benefit of it before it is confiscated.

Thus why the tax should apply to the income.

I also do not see a cap realistically being applied in all countries at the same time around the globe. Safe havens will spring up in which the wealthy and their corporations leave their cap country with as much of their operations to safe haven countries, probably to the point of changing citizenship to avoid the cap.

It doesn't have to be applied in all countries at the same time. But it would need to start with the wealthiest/most powerful countries. This way they would force the weaker countries to follow suit.

ETA: Also, what if a single asset exceeds the cap and one is forced to sell the asset when they do not wish too. Who will be able to buy it?

There are a lot of different ways to handle that, but it seems pointless to worry about that for now.

Even if a single asset doesn't exceed, assets in the portfolio may increase in a good year such that one is forced to sell some. Then, if the market drops in a year or two, you where forced to give up assets that in only a year you would have been able to hold on to.

What's the problem exactly?

I just think the whole cap idea is impossible.

Far from that. The hard part is making it happen.

Obviously since I specifically mentioned them in what you quoted when I said, "yet you've thrown a wrench [the cap] in the existing system, affecting the flow of capital and market pricing."

I also highlight the problem of the cap not being applied globally, in my comments above.

I would start with campaign finance reform. However, in the US, we have to overcome the SCOTUS decision that essentially equates spending money with protected speech. I don't know if that means convincing the court to overturn that ruling or amending the Constitution itself. All of which are nearly impossible it seems, just as passing a wealth cap would be. Perhaps things have to become much more intolerable before such changes can take place.

I would also consider ways of making more parties viable and hence increasing competition in the political arena. Ranked choice voting might be a great start at giving real life to alternative parties. With multiple parties filling both sides of the house, there would be much more need to compromise and form coalitions (assuming one party doesn't always maintain over 50% of the members), extreme voices would be marginalized within a single party among multiple parties giving a greater opportunity for moderate voices to gain traction and support elections. Or at least that is my speculation.

That doesn't come even close to a solution. I live in a country where companies can't donate to finance campaigns anymore and where there is a multitude of parties. Guess what? Money is still a huge source of power and inluences political decisions very much.

 

[MikeF]

Thus why the tax should apply to the income.

It doesn't have to be applied in all countries at the same time. But it would need to start with the wealthiest/most powerful countries. This way they would force the weaker countries to follow suit.

There are a lot of different ways to handle that, but it seems pointless to worry about that for now.

What's the problem exactly?

Far from that. The hard part is making it happen.

Well, I've shared my concerns regarding the implementation of a cap on wealth. Seems I've failed to sway you.

That doesn't come even close to a solution. I live in a country where companies can't donate to finance campaigns anymore and where there is a multitude of parties. Guess what? Money is still a huge source of power and inluences political decisions very much.

Certainly my proposed solution would require strong political and legal institutions. Given recent history, perhaps I should have less confidence in the US system.

 

[Koldo]

Well, I've shared my concerns regarding the implementation of a cap on wealth. Seems I've failed to sway you.



Certainly my proposed solution would require strong political and legal institutions. Given recent history, perhaps I should have less confidence in the US system.

We have strong political and legal institutions here in Brazil. Why hasn't your proposed solution, which has already been enacted here, solved the problem?

 

[Heyo]

If you cap the amount a private person can invest in a company, it won’t harm that company indirectly, it will be direct harm to that company that depends on investors in order to survive. This will harm the company, and when you have company after company hurt this way, it will hurt the economy.

Still where? If the private citizen is not allowed to invest the rest of his money in the company, where does it go? Stuffing his mattress? This has the same effect as burning it because the money will become devalued by inflation.

You are aware that we are talking about the 1%? Only they would be influenced by a cap (or, the preferred method, an excess income tax). The 99% can still invest as much as they like, and they'd have some excess money because taxes for the 99% would be lower, now that the 1% pay their fair share.

Companies are not supposed to be run according to the rules of democracy. The only people who should have a say in how the company is run are those invested in it; only their vote should count.

Countries are supposed to be run according to the rules of democracy, where every person has the same amount of votes. Companies are not people (or should not be treated like people) and they shouldn't have votes, especially not more votes than the populace.

 

[PureX]

So far I see no justification whatever from anyone why we shouldn't maintain a progressive tax on individual assets that eventually increases to 100% on let's say $50 million.

And likewise up to a 100% tax on businesses profits beyond a reasonable percentage of their total value.

 

[Kfox]

You are aware that we are talking about the 1%? Only they would be influenced by a cap (or, the preferred method, an excess income tax). The 99% can still invest as much as they like, and they'd have some excess money because taxes for the 99% would be lower, now that the 1% pay their fair share.

The majority of economic growth is created due to the 1%. To stifle the group that provides the majority of your economic growth will have a negative effect on the economy.
Consider the scenario; let's say the cap is $10 million, so a person invests $10 million, and due strictly to share price increase, the wealth grows to $20; do you take half of his shares away from him and spend it so he's back to $10 million? What happens if the next year the price drops and he goes down to $5 million; or less? Do he get his original shares back so he's back to $10 million? How is this done if the money is already spent?

Countries are supposed to be run according to the rules of democracy, where every person has the same amount of votes. Companies are not people (or should not be treated like people) and they shouldn't have votes, especially not more votes than the populace.

Companies don't vote; but even if they did, your idea would not prevent them.

 

[Kfox]

So far I see no justification whatever from anyone why we shouldn't maintain a progressive tax on individual assets that eventually increases to 100% on let's say $50 million.

And likewise up to a 100% tax on businesses profits beyond a reasonable percentage of their total value.

Don't cha think that will stifle growth?

 

[MikeF]

And likewise up to a 100% tax on businesses profits beyond a reasonable percentage of their total value.

Correct me it I am wrong, but wouldn't you be taking money away from union pension funds if you take business profit over a certain value? Aren't those profits paid out as dividends to shareholders, many of whom participate through personal IRA's, self employed IRA's, and 401k's in addition to union pension funds?

 

[Heyo]

The majority of economic growth is created due to the 1%. To stifle the group that provides the majority of your economic growth will have a negative effect on the economy.
Consider the scenario; let's say the cap is $10 million, so a person invests $10 million, and due strictly to share price increase, the wealth grows to $20; do you take half of his shares away from him and spend it so he's back to $10 million?

You still seem not to understand. $10 millions are peanuts to the 1%. The cap would more likely be around $10 billion.
Also, I'm not promoting the cap nor do I promote a tax on existing wealth. I'm for a progressive tax that will take from the income, not the base wealth.

 

[siti]

Consider the scenario; let's say the cap is $10 million, so a person invests $10 million, and due strictly to share price increase, the wealth grows to $20; do you take half of his shares away from him and spend it so he's back to $10 million?

Right! And that's exactly what happens regardless of where you place the cap...if any gains are going to take you beyond the cap and those gains are going to be taxed at 100%, what is the use of further investment?

Right now, if a $10million cap was implemented in the US, that would affect about 1.5 million people...there surely cannot be any serious question that removing the incentive of 1.5 million multimillionaires to invest would have a negative impact on the economy...

If you move the cap higher, then its fewer people...probably less than 1000 people if you move up to a billion dollar cap, but still a significant impact on potential investment I reckon...

And if you move it higher still, well are you really making much of an impact on the wealth gap if you still have a handful of multi-billionaires and some people with zero wealth at all?

 

[siti]

You still seem not to understand. $10 millions are peanuts to the 1%. The cap would more likely be around $10 billion.

So you could earn $10 billion and keep it...how exactly does that address the wealth gap?

 

[Heyo]

So you could earn $10 billion and keep it...how exactly does that address the wealth gap?

By redistributing the wealth from the top to the bottom, e.g. by lowering taxes of the less fortunate.