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Video on Wealth Distribution in America - Blew My Mind

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IMO shifting to a land-based taxation system would be preferable to taxing income (for both individuals and businesses). It has several benefits - the first is that it's morally more appropriate I think, as "land" isn't something that anyone can reasonably claim to own. The contents of the land, sure, since the world didn't come into being with a factory or a field of vinyards on it. But the land itself? Whilst it has been bought and sold countless times, no one can really say that the original person did anything to earn that land. It's a common good, and effectively "licensing" its use is an effective way of ensuring that the majority benefit from what the majority should own. (That's not to say I think it should all be rationed out - simply that it should be the basis for what tax we pay). Our labour, however, is entirely our own. Secondly, taxation tends to discourage things. It's why some people want higher taxation on petrol, cigarettes, alcohol etc. As such, when we tax labour there's no reason to think that this does not similarly discourage its use. Move the tax base primarily to land, and you're more likely to ensure an efficient use of that land.

Like many things, a policy like this would live and die on its details - who would be exempt (such as farmers) and how would the prices vary by location? Most studies into such systems recommend having taxation levied on the basis of potential earnings on that land - so 100sq feet in central London would be taxed higher than 100sq ft in Blackpool, because its potential earnings are so much greater.

Incidentally, in the UK the income of the bottom 10% of earners in the country has gone up and that of the top 10% has gone down, both in real terms.
 
speaking of the french, how is the 75% income tax on earnings after 1 million euros working out? was the experiment a success?
 
CyclopsRock said:
IMO shifting to a land-based taxation system would be preferable to taxing income (for both individuals and businesses). It has several benefits - the first is that it's morally more appropriate I think, as "land" isn't something that anyone can reasonably claim to own. The contents of the land, sure, since the world didn't come into being with a factory or a field of vinyards on it. But the land itself? Whilst it has been bought and sold countless times, no one can really say that the original person did anything to earn that land. It's a common good, and effectively "licensing" its use is an effective way of ensuring that the majority benefit from what the majority should own. (That's not to say I think it should all be rationed out - simply that it should be the basis for what tax we pay). Our labour, however, is entirely our own. Secondly, taxation tends to discourage things. It's why some people want higher taxation on petrol, cigarettes, alcohol etc. As such, when we tax labour there's no reason to think that this does not similarly discourage its use. Move the tax base primarily to land, and you're more likely to ensure an efficient use of that land.

Like many things, a policy like this would live and die on its details - who would be exempt (such as farmers) and how would the prices vary by location? Most studies into such systems recommend having taxation levied on the basis of potential earnings on that land - so 100sq feet in central London would be taxed higher than 100sq ft in Blackpool, because its potential earnings are so much greater.

Incidentally, in the UK the income of the bottom 10% of earners in the country has gone up and that of the top 10% has gone down, both in real terms.
Click to expand...

Land based taxation is basically how Texas works. No income tax, just property taxes. Seems to do a decent job of providing a progressive tax. However, it's not without its opponents. Though you do have some of the very rich getting around it by putting some cows on their land and getting a exemption.
 
-COOLIO- said:
speaking of the french, how is the 75% income tax on earnings after 1 million euros working out? was the experiment a success?
Click to expand...

It hasn't actually come into effect yet, IIRC. It's going to be soon, but it's likely we won't know it's effect for some time. Aside from anything, I think they've already said that it's only going to be there for two years which is silly - rich people can easily shift stuff around and defer and delay payments to make sure they get a windfall after the higher tax rate is gone. The one thing I can guarantee is that at the end of the first year of the 75% rate being implemented, the number of people declaring incomes of over 1m euros will go down dramatically. In the UK, when they bumped the top rate from 40% --> 50%, it went down by about 2/3rds. That doesn't mean they're moving abroad or earning less, just that they've got the financial flexibility to put the money into investments, defer payments etc.
 
Lathentar said:
Land based taxation is basically how Texas works. No income tax, just property taxes. Seems to do a decent job of providing a progressive tax. However, it's not without its opponents. Though you do have some of the very rich getting around it by putting some cows on their land and getting a exemption.
Click to expand...

That's probably not much of a problem though, surely? After all, the source of their wealth won't be from those fields with the cows on it. It'll be from, maybe, oil fields or whatever over pies they have their fingers in. I should think that the taxation on that land could be significantly higher, though of course it depends. A company like Google don't rely on a physical presence for their money earning capacity - they could set up in a field in the middle of no where for all the difference it makes. Of course, they don't because they need to hire talent, but in an increasing digital age, this is a big problem for land taxes imo.

Edit: Sorry, I'm DPing all over the place!
 
CyclopsRock said:
IMO shifting to a land-based taxation system would be preferable to taxing income (for both individuals and businesses). It has several benefits - the first is that it's morally more appropriate I think, as "land" isn't something that anyone can reasonably claim to own. The contents of the land, sure, since the world didn't come into being with a factory or a field of vinyards on it. But the land itself? Whilst it has been bought and sold countless times, no one can really say that the original person did anything to earn that land. It's a common good, and effectively "licensing" its use is an effective way of ensuring that the majority benefit from what the majority should own. (That's not to say I think it should all be rationed out - simply that it should be the basis for what tax we pay). Our labour, however, is entirely our own. Secondly, taxation tends to discourage things. It's why some people want higher taxation on petrol, cigarettes, alcohol etc. As such, when we tax labour there's no reason to think that this does not similarly discourage its use. Move the tax base primarily to land, and you're more likely to ensure an efficient use of that land.

Like many things, a policy like this would live and die on its details - who would be exempt (such as farmers) and how would the prices vary by location? Most studies into such systems recommend having taxation levied on the basis of potential earnings on that land - so 100sq feet in central London would be taxed higher than 100sq ft in Blackpool, because its potential earnings are so much greater.

Incidentally, in the UK the income of the bottom 10% of earners in the country has gone up and that of the top 10% has gone down, both in real terms.
Click to expand...

I'm....not sure if I disagree or not, but how would that help the wealth distribution issue? The Waltons are worth something like $100 million times more then me, but they don't own 100 million times in valuation the land I do. Unless we count the development on that land in its valuation, but then doesn't that get away from your whole point about divorcing land from the things on the land?

I feel like your second paragraph is a bit at odds with your first, since the first seems concerned with drawing the distinction that "land can be taxed because you can't own it, just things on it", but then the second seems to think that the valuation of land does have to account for the things on it and the context in which it exists.
 
Since the representative part of our representative republic only represents lobbies with lots of cash anymore... we should replace them with a branch of experts, scientific, business, medical, ect. Voting can be done only on the basis of a resume and a 10 page essay viewed online, no commercials.
 
CyclopsRock said:
That's probably not much of a problem though, surely? After all, the source of their wealth won't be from those fields with the cows on it. It'll be from, maybe, oil fields or whatever over pies they have their fingers in. I should think that the taxation on that land could be significantly higher, though of course it depends. A company like Google don't rely on a physical presence for their money earning capacity - they could set up in a field in the middle of no where for all the difference it makes. Of course, they don't because they need to hire talent, but in an increasing digital age, this is a big problem for land taxes imo.

Edit: Sorry, I'm DPing all over the place!
Click to expand...
Well they don't own the land. The corporations would own (or lease) that land. The cows are at make it so the property tax (on their 100 acres and mansion) is a lower rate because their land is now a "farm". It's not all that common and it's not like it's something that could be done in the middle of a city. This conversation is also about individuals not corporations.
 
Bulbo Urethral Baggins said:
This would be more disturbing if there was some finite amount of wealth that is distributed among the population. But there's not.
Click to expand...
So you're saying that our planet consists of infinite real estate, infinite oil supplies and infinite gold. I did not know this.

Basically, those starving folks in Africa are just being too lazy to dig wells, since we have an infinite supply of drinkable water as well? I knew it! Those lazy poors!
 
Wealth disparity is so bad, and the richest people keep getting richer...

and yet they still complain about how bad everything is and how they need more tax breaks, etc etc.

fucking kidding me?
 
Bulbo Urethral Baggins said:
This would be more disturbing if there was some finite amount of wealth that is distributed among the population. But there's not.
Click to expand...

Its disturbing because wealth represents power. Purchasing power, and there are a lot of things that can be purchased these days. Politicians, for one. Media that strongly influences the opinions of millions.

The problem is not the specific number that represents a fraction of "the total wealth" leaving less for the rest of us, the problem is that they have so much more then the rest of us. The relative difference, not the specific number.
 
The Technomancer said:
I'm....not sure if I disagree or not, but how would that help the wealth distribution issue? The Waltons are worth something like $100 million times more then me, but they don't own 100 million times the land I do.
Click to expand...

They're the guys that own a big chunk of Walmart, right? Well, for starters, the stores would necessarily be paying tax on their land. Whatever investment vehicles the Waltons utilise would, too (ie Goldman Sach's headquarters in New York). But ultimately yeah, it's not a policy that's going to ensure rich people lose all their money, but it's not supposed to be either. It's meant to mean that, going forwards, money is taken to pay for common benefit from those that most use a commonly owned resource. As much as you may not like the fact the Walton's have hundreds of millions of dollars, they are their dollars, not yours or mine. I don't think a tax system should be based around taking money from people simply because they can afford to lose it.

(And that's not to say that this would be the only tax, just like income tax isn't the only tax. When the Walton's put $100m in the bank to accrue interest, that deposit goes towards funding loans for businesses and for people to buy homes, etc. Taxation on this sort of profit could be - and is - done, and as long as they still get a better return than the ravages of inflation, it'll be a popular thing to do - the problem is if there's another country where they don't take a chunk of the pie where they'd also do well. I';m not sure. )
 
CyclopsRock said:
IMO shifting to a land-based taxation system would be preferable to taxing income (for both individuals and businesses). It has several benefits - the first is that it's morally more appropriate I think, as "land" isn't something that anyone can reasonably claim to own. The contents of the land, sure, since the world didn't come into being with a factory or a field of vinyards on it. But the land itself? Whilst it has been bought and sold countless times, no one can really say that the original person did anything to earn that land. It's a common good, and effectively "licensing" its use is an effective way of ensuring that the majority benefit from what the majority should own. (That's not to say I think it should all be rationed out - simply that it should be the basis for what tax we pay). Our labour, however, is entirely our own. Secondly, taxation tends to discourage things. It's why some people want higher taxation on petrol, cigarettes, alcohol etc. As such, when we tax labour there's no reason to think that this does not similarly discourage its use. Move the tax base primarily to land, and you're more likely to ensure an efficient use of that land.

Like many things, a policy like this would live and die on its details - who would be exempt (such as farmers) and how would the prices vary by location? Most studies into such systems recommend having taxation levied on the basis of potential earnings on that land - so 100sq feet in central London would be taxed higher than 100sq ft in Blackpool, because its potential earnings are so much greater.

Incidentally, in the UK the income of the bottom 10% of earners in the country has gone up and that of the top 10% has gone down, both in real terms.
Click to expand...

I already pay a hell of alot in property tax in Illinois, 3.5k a year for a standard city lot (not any where near Chicago, in central Illinois). Property taxes are high enough for most of us.
 
The Technomancer said:
Its disturbing because wealth represents power. Purchasing power, and there are a lot of things that can be purchased these days. Politicians, for one. Media that strongly influences the opinions of millions.

The problem is not the specific number that represents a fraction of "the total wealth" leaving less for the rest of us, the problem is that they have so much more then the rest of us. The relative difference, not the specific number.
Click to expand...
I can agree with that.
 
The Technomancer said:
I feel like your second paragraph is a bit at odds with your first, since the first seems concerned with drawing the distinction that "land can be taxed because you can't own it, just things on it", but then the second seems to think that the valuation of land does have to account for the things on it and the context in which it exists.
Click to expand...

Oh, the buildings and context isn't an irrelevance at all. I know what you're saying, but the buildings and operations on top of the land is absolutely privately owned, and completely affect the value of that land, be it to a business to exploit for profit or an individual to build a home on. The plain fact, though, is that when one person or business occupies the land, no one else can, and it's from this basis that the tax is justified. The context surrounding it is simply how we decide how much to tax it.
 
aku:jiki said:
So you're saying that our planet consists of infinite real estate, infinite oil supplies and infinite gold. I did not know this.

Basically, those starving folks in Africa are just being too lazy to dig wells, since we have an infinite supply of drinkable water as well? I knew it! Those lazy poors!
Click to expand...

I don't think that's what he's saying, and you know that. The fact is that nothing has fallen to earth in the last 2000 years. No extra resources or external knowledge has been given. Everything we have now has been on this earth for the last several billion years. Yet, over the last 2,000 years, the world has steadily become wealthier as we've become more intelligent, more able to exploit our surroundings, more able to fight disease and live longer, more able to work together and achieve technology advances etc. His point is that wealth is not a zero sum game - One person getting richer does not mean another has to get poorer. And, whether you agree that it's a particularly relevant point to this discussion, it's undoubtedly true. Wealth is not a zero-sum game. I suspect when he said "finite", he meant "static". Wealth is almost certainly finite, but the idea we have reached that end point is laughable.
 
I knew it was bad, but damn...that is pretty terrible. I wonder if the levy would ever break over this where we would have some major revolt and riots. Kinda put things in perspective. I wonder what would happen if the states does not have programs such as foodstamps and general help and majority of people are really destitute.
 
Pagusas said:
I already pay a hell of alot in property tax in Illinois, 3.5k a year for a standard city lot (not any where near Chicago, in central Illinois). Property taxes are high enough for most of us.
Click to expand...

I'm talking about a complete shift, though. You say $3.5k is "a hell of a lot" - well, how much income tax do you pay? I don't expect you to actually say it out loud, but consider you were able to keep that. You going to work doesn't stop anyone else working. You having a house on your plot does stop everyone but yourself having a house there. It's a much fairer way of taxation I think, assuming the details can be hammered out. I don't claim to have all the answers, incidentally.
 
This really makes me wonder why I try so hard to go from a 30k/year job (currently), to a 50k/year job. In the scheme of things, the amount of money is so low that it is almost negligible in the eyes of that chart.

Fucking depresses me.
 
mackattk said:
This really makes me wonder why I try so hard to go from a 30k/year job (currently), to a 50k/year job. In the scheme of things, the amount of money is so low that it is almost negligible in the eyes of that chart.

Fucking depresses me.
Click to expand...
But it isn't. 20k a year is actually pretty significant. Think about it. I'm sure you know your finances pretty well, you know what real impact on your life that money would have

The numbers we're dealing with here are ludicrous.
 
mackattk said:
This really makes me wonder why I try so hard to go from a 30k/year job (currently), to a 50k/year job. In the scheme of things, the amount of money is so low that it is almost negligible in the eyes of that chart.

Fucking depresses me.
Click to expand...

But that amount of money is a massive change to you.
 
CyclopsRock said:
His point is that wealth is not a zero sum game - One person getting richer does not mean another has to get poorer. And, whether you agree that it's a particularly relevant point to this discussion, it's undoubtedly true. Wealth is not a zero-sum game. I suspect when he said "finite", he meant "static". Wealth is almost certainly finite, but the idea we have reached that end point is laughable.
Click to expand...

It's not a zero sum game, but we're at a point where about 95% of economic growth is going to the rich. Actually in the past 5 years a lot of people have gotten significantly poorer while the rich are doing better than ever.

Quite frankly it is starting to look like a zero sum game.
 
The more I read and understand history, the more I understand that there is a hidden tax imposed on a population to bolster the power of the wealthy: INFLATION.

Printing money and encouraging debt devalues our purchasing power (aka our annual salaries don't buy us any more goods than they did back in the late 1970's, so we borrow to buy things that we need). Those that control production and financial assets, ride out the inflation tax by hedging against it. The rich get richer... the middle class is destroyed.

Someone needs to press the RESET button.
 
And again we see the fallacy of "trickle down" economics.
It just doesn't make any sense at all at that scale. When the wealthy have SO much there's just not much need for them to consume.

It's like giving Huey Dewey and Louie a five dollar bill. They'll go out and get ice cream within the hour. Give Scrooge fifty bucks he'll have someone put it in his money bin.
 
The issue isn't that wealth is or isn't zero-sum, it's how our country's system is supposed to work. As one of the wealthy, I'm supposed to be able to make a bunch of money for myself, but I'm also supposed to pay a reasonable tax on that money. The government then takes that money, and provides services that bolster the middle class, either through things like roads and education, or through grants and entitlements and such. Yes, everyone puts into the government kitty, but the people who benefit the most from it will be the middle and lower classes, and the people who will put in the most will be the upper class (because they're also profiting the most).

That's how it's supposed to work.

Instead, the wealthy have managed to implement quite a few rules and methods by which they really don't pay much at all. Yes, I can point to my taxes and state that I paid four times as much as one of my employees, so I'm obviously paying my share. However, my income last year was ten times his. Heck, I made $75,000 just today that I won't pay a single cent of tax on.

The current rules are broken, and so heavily favor the wealthy, so why would anyone with financial power even seek to fix them?
 
KingGondo said:
The game is rigged.
Click to expand...
Couldn't agree more.

Changing tax structure and wages are fine adjustments to a system. I think we need coarse adjustments. We need to identify the mechanisms that separate the rich from the poor and change the rules of the game so that the same tools are reasonably accessible to all citizens. The video briefly mentioned stocks & investments, and I think this is probably a big part of it. The difference between renting and owning property is huge too. College tuition too... so many things.

I think the video gives some great information, but I'm very curious as to how the wealth distribution looks at different age brackets, gender, ethnicity, and geographic location. I'm not convinced making decisions based on high-level information like this can be very reliable. I'm no economist, but I think that abstraction is also a major reason why many others don't easily understand the options we face for addressing the problems.
 
ronito said:
And again we see the fallacy of "trickle down" economics.
It just doesn't make any sense at all at that scale. When the wealthy have SO much there's just not much need for them to consume.

It's like giving Huey Dewey and Louie a five dollar bill. They'll go out and get ice cream within the hour. Give Scrooge fifty bucks he'll have someone put it in his money bin.
Click to expand...
This is how I know I'm not really part of the bourgeoisie. Give me fifty bucks and I'll go buy all the ice cream. (Or cookies in this case. I can't each much ice cream. It's too cold.)
 
AMUSIX said:
The issue isn't that wealth is or isn't zero-sum, it's how our country's system is supposed to work. As one of the wealthy, I'm supposed to be able to make a bunch of money for myself, but I'm also supposed to pay a reasonable tax on that money. The government then takes that money, and provides services that bolster the middle class, either through things like roads and education, or through grants and entitlements and such. Yes, everyone puts into the government kitty, but the people who benefit the most from it will be the middle and lower classes, and the people who will put in the most will be the upper class (because they're also profiting the most).

That's how it's supposed to work.

Instead, the wealthy have managed to implement quite a few rules and methods by which they really don't pay much at all. Yes, I can point to my taxes and state that I paid four times as much as one of my employees, so I'm obviously paying my share. However, my income last year was ten times his. Heck, I made $75,000 just today that I won't pay a single cent of tax on.

The current rules are broken, and so heavily favor the wealthy, so why would anyone with financial power even seek to fix them?
Click to expand...

Because the end game involves guillotines.
 
Seeing this in graphical form is mind blowing even if you know the numbers.

Clearly welfare and other entitlements are just preventing the poors from class mobility ...

Also we need more freedom in the markets.
 
Fury Sense said:
Couldn't agree more.

Changing tax structure and wages are fine adjustments to a system. I think we need coarse adjustments. We need to identify the mechanisms that separate the rich from the poor and change the rules of the game so that the same tools are reasonably accessible to all citizens. The video briefly mentioned stocks & investments, and I think this is probably a big part of it. The difference between renting and owning property is huge too. College tuition too... so many things.

I think the video gives some great information, but I'm very curious as to how the wealth distribution looks at different age brackets, gender, ethnicity, and geographic location. I'm not convinced making decisions based on high-level information like this can be very reliable. I'm no economist, but I think that abstraction is also a major reason why many others don't easily understand the options we face for addressing the problems.
Click to expand...

I've heard that argument that we should just put more of the poor/middle class in the stock market. But even that's rigged too.

I mean they just paid $300 million to put in a transatlantic cable so that big trader can shave off a few milliseconds on their transactions.

http://www.telegraph.co.uk/technolo...able-that-will-save-traders-milliseconds.html

There are huge cathedrals of code that buy and sell stock automatically on their own. The average person isn't going to have an army of coders or a farm of servers or even the internet connection to be able to compete against the big companies.

The ancient jews had it right with the idea of Jubilee and resetting every few years to keep things from getting too skewed.

I don't really know what can be done to right things. Change the tax code? Well they have a team of accountants to make sure they pay as little as possible. Consumption tax? Possibly. But only helps with taxes. I think you have to get rid of lobbyists, publicly fund elections. Revoke Corporate personhood. And that's just the first step.
 
Lathentar said:
Land based taxation is basically how Texas works. No income tax, just property taxes. Seems to do a decent job of providing a progressive tax. However, it's not without its opponents. Though you do have some of the very rich getting around it by putting some cows on their land and getting a exemption.
Click to expand...

How is the taxing of land based on it's earning potential different from what we do now, which is to tax the actual income earned? That takes the difficulty of judging the tax and works under the reasonable assumption people will maximise income.
 
Many people can turn a blind eye to the situation since they are more focused on the needs of thier specific family and social circle but most of this countries infrastructure (roads, sewers, water pipes, electrical grids) is close to a hundred years old. People will definelty start to care when they have no water or the sewers start backing up into the streets. Things that actually impact they way they live in thier daily lives.
 
waterydave said:
Many people can turn a blind eye to the situation since they are more focused on the needs of thier specific family and social circle but most of this countries infrastructure (roads, sewers, water pipes, electrical grids) is close to a hundred years old. People will definelty start to care when they have no water or the sewers start backing up into the streets. Things that actually impact they way they live in thier daily lives.
Click to expand...

America. Where water has to become undrinkable and shit must come forth from the sewers before we give a fuck.
 
AMUSIX said:
The issue isn't that wealth is or isn't zero-sum, it's how our country's system is supposed to work. As one of the wealthy, I'm supposed to be able to make a bunch of money for myself, but I'm also supposed to pay a reasonable tax on that money. The government then takes that money, and provides services that bolster the middle class, either through things like roads and education, or through grants and entitlements and such. Yes, everyone puts into the government kitty, but the people who benefit the most from it will be the middle and lower classes, and the people who will put in the most will be the upper class (because they're also profiting the most).

That's how it's supposed to work.

Instead, the wealthy have managed to implement quite a few rules and methods by which they really don't pay much at all. Yes, I can point to my taxes and state that I paid four times as much as one of my employees, so I'm obviously paying my share. However, my income last year was ten times his. Heck, I made $75,000 just today that I won't pay a single cent of tax on.

The current rules are broken, and so heavily favor the wealthy, so why would anyone with financial power even seek to fix them?
Click to expand...

Yup. The status quo favours the rich and powerful, and business is GREAT. The majority who fall within that bracket are going to do what's best for them.
 
satori said:
I knew it was bad, but damn...that is pretty terrible. I wonder if the levy would ever break over this where we would have some major revolt and riots. Kinda put things in perspective. I wonder what would happen if the states does not have programs such as foodstamps and general help and majority of people are really destitute.
Click to expand...

I believe that every generation reaches a breaking point and tries to do something about the status quo.

We had our chance when the bubble burst in 2008 and tons of people lost their jobs and were living in parking lots and shit.

The Occupy Movement came from that and has so far proven to be a pointless blip.

We need a bigger catalyst. Not sure what though.
 
Pau said:
This is how I know I'm not really part of the bourgeoisie. Give me fifty bucks and I'll go buy all the ice cream. (Or cookies in this case. I can't each much ice cream. It's too cold.)
Click to expand...

Yeah you're both dancing around Marginal Propensity to Consume there, which is a function of both wealth before and wealth after. Scrooge's MPC is 0 for $50--it doesn't move his needle--but maybe it's 100% for $10 million--he founds the prestige video game developer he's always dreamed of running.

Maybe.

The point is good fucking luck trying to derive those curves in a policy-relevant way. If you're going to introduce some wealth-shock that's going to kick an underemployed economy back up to full employment, you need to implement it in such a way that all the money doesn't go immediately into "savings" activity such as investments in financial instruments and paying down debt.

Of course, that's a discussion about the implementation of counter-acting a recession, not of counter-acting a skewed income distribution.
 
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