Wealth! How much is enough?

[Birdjaguar]

There are two kinds of wealth: assets and income. Income inequality is a huge problem in the US and the world.

This NPR artilce is all about the new centibillionaires and Bob Dylan just sold his song rights for something over $300 million.

So setting annual income aside and focusing on assets, how much is enough? Should asset wealth be capped? Should it just be heavily taxed? Is there a level where once a household/person/family has that much that is all they can have?

I choose various levels, please post your own thoughts.

Once a household crosses a limit, what happens?
Should wealth be donated?
Should it be passed to children?
Should the government get all excess wealth?
Should grandfathering be allowed?

Remember asset wealth is not income wealth even if it generates income. Income is a different question.

 

[AdamCrock]

I'll have a philosophical answer : Since there is no way to take one's wealth beyond the chilling gates of death it is quite futile to amass more than is enough to live comfortably and happily - so final answer : as much as makes You happy. No such an option yet .

 

[Synobun]

With proper taxation, I don't see a need to cap assets. I don't see a need for the state to interfere with inheritance either.

 

[Birdjaguar]

I'll have a philosophical answer : Since there is no way to take one's wealth beyond the chilling gates of death it is quite futile to amass more than is enough to live comfortably and happily - so final answer : as much as makes You happy. No such an option yet .

So you don't see wealth inequality is not a problem? and I guess, "no limit" would fit your thinking.

 

[Birdjaguar]

How would you tax asset wealth?

With proper taxation, I don't see a need to cap assets. I don't see a need for the state to interfere with inheritance either.

 

[AdamCrock]

With proper taxation, I don't see a need to cap assets. I don't see a need for the state to interfere with inheritance either.

IMHO taxation is the key . There a lot of ways to cheat people out of their money : For example - Government gives a donations/social support/subsidiaries to farmers for fuel for their farming machines/vehicles. In order to do so government rises taxes. If a farmer is to calculate how much money he paid in those raised taxes vs. the money he received from government's donations/subsidiaries he would nearly always be in his "loss", but the farmer in his shortsightedness does not see this, he only sees that he is given supposedly "free" money. I only posted this example so that the people could see that so called "social" is not always as good as they think.

 

[Synobun]

How would you tax asset wealth?

A graded purchase tax, as well as a luxury tax (on yachts, for example). The more you buy, the more you pay. This doesn't impact low-, middle-, or even lower rich-class individuals and families. It only impacts the super-rich and asset hoarders.

If you're the sort to have ten supercars, by all means, but you're going to pay an increasingly dire premium for every car you add to your fleet.

 

[El_Machinae]

Theoretically, no upper limit should really be necessary, but given that land is scarce an upper limit might be necessary. I do think that taxing inheritances is necessary, because of wealth snowballing

What's mostly a concern is not so much ownership as hoarding. If I own a bridge or the community owns a bridge, it doesn't really matter. The bridge isn't going anywhere, so the ownership is 'on paper'. But if one entity's ownership causes restrictions on the bridge's use or causes it to be degraded into being non-useful, that's a problem. And unless the bridge creates income, partial ownership is somewhat nonsensical

Also, it's okay to use dollars to represent wealth, but it's actually impossible to actualize wealth into dollars without triggering 'income'.

There's a meme going around saying that we shouldn't have billionaires. I've seen a lot of hatred against that meme, but I also don't see anything wrong with it. The practicalities of preventing someone from being a billionaire are interesting, because they're then left with some type of dilemma about what to do with their billionth unit of wealth creation. If the wealth comes from some type of system that has a network effect or benefits from economies of scale, we'd be losing out on productivity. It might be worth it, but it might not be. See my bridge analogy up above. A bridge that is worth $2 billion is a 'more useful' bridge than one worth $1 million. But unless that bridge is being used to generate income, saying "oh, you only own 1/2 the bridge now, because it's worth so much" is ... well .. weird.

You'll note that it's possible to build a bridge worth $2 billion. But very little of that value comes from that actual work (or capital) you actually invested. It's worth so much because of where it is, in the society that allows it.

 

[Birdjaguar]

I think $100 million per household is sufficient and any excess could be donated or be siphoned off into some sort of National infrastructure fund to be used to build out projects of widespread value: roads, trains, solar, connectivity, health, etc.

 

[AdamCrock]

A graded purchase tax, as well as a luxury tax (on yachts, for example). The more you buy, the more you pay. This doesn't impact low-, middle-, or even lower rich-class individuals and families. It only impacts the super-rich and asset hoarders.

If you're the sort to have ten supercars, by all means, but you're going to pay an increasingly dire premium for every car you add to your fleet.

IMHO the graded tax is good as long as it does not impede the development of "crucial" or "home" industries. I'm in favor of lower taxes on self employed vs. the corporations so there's a "but" in it

 

[Birdjaguar]

Theoretically, no upper limit should really be necessary, but given that land is scarce an upper limit might be necessary. I do think that taxing inheritances is necessary, because of wealth snowballing

What's mostly a concern is not so much ownership as hoarding. If I own a bridge or the community owns a bridge, it doesn't really matter. The bridge isn't going anywhere, so the ownership is 'on paper'. But if one entity's ownership causes restrictions on the bridge's use or causes it to be degraded into being non-useful, that's a problem. And unless the bridge creates income, partial ownership is somewhat nonsensical

Also, it's okay to use dollars to represent wealth, but it's actually impossible to actualize wealth into dollars without triggering 'income'.

There's a meme going around saying that we shouldn't have billionaires. I've seen a lot of hatred against that meme, but I also don't see anything wrong with it. The practicalities of preventing someone from being a billionaire are interesting, because they're then left with some type of dilemma about what to do with their billionth unit of wealth creation. If the wealth comes from some type of system that has a network effect or benefits from economies of scale, we'd be losing out on productivity. It might be worth it, but it might not be. See my bridge analogy up above. A bridge that is worth $2 billion is a 'more useful' bridge than one worth $1 million. But unless that bridge is being used to generate income, saying "oh, you only own 1/2 the bridge now, because it's worth so much" is ... well .. weird.

You'll note that it's possible to build a bridge worth $2 billion. But very little of that value comes from that actual work (or capital) you actually invested. It's worth so much because of where it is, in the society that allows it.

Wealth does generate income, but I think you have to separate them if one is going to solve the inequality problem. Assets are usually the source of great wealth and even if you just take away that income, that does not solve the problem of very few people owning way too much of the income generating machines.

Beyond a certain point (see the poll) all that wealth is mostly meaningless except that a person has the "financial power" of a small nation without any of the responsibility for taking care of people.

 

[AdamCrock]

There are 2 proverbs that comes to my mind seeing this great conversation
"Wealth unused might as well do not exist" and "Everything is worth what the purchaser is willing to pay for it"

 

[El_Machinae]

Wealth does generate income, but I think you have to separate them if one is going to solve the inequality problem. Assets are usually the source of great wealth and even if you just take away that income, that does not solve the problem of very few people owning way too much of the income generating machines.

I think we're crossing definitions here.

Wealth generates income, sure, but you were taking income out of the equation. And so we're being asked to consider how much wealth was too much. AFAICT, the majority of the damage from accumulated wealth can be expressed in terms of income (which is zero sum) as well. My $2 billion bridge is creating value, but if I am not pulling any income from it, it means that all of that value is being passed straight to the users of the bridge. If I am using a toll in order to keep the bridge in repair, all of the value is still being passed to the users who are then funding the maintenance out of that bridge out of their profits from using it.

As the economy grows, the latent value of the bridge rises. My 'wealth is growing'. BUT, if I am not pulling an income from the bridge, I cannot use that wealth to snowball and cause inequity.

It might be impossible to extract the two concepts from each other. Oh, and for clarity, I am saying that when an asset is used to 'trade for new assets' or 'get dollars', it's now counting as an income. If I have an apple tree, and it grows, my total wealth has grown (I have a bigger apple tree!). But I cannot sell or trade my apples, or even sell my tree, without triggering 'income' (which was taken out of the discussion).

Now, due to my years of finance, I think of income and wealth as interchangeable, different views of the elephant. But, in economics terms, I don't think they need to be.

 

[cardgame]

Wealth is assets and income is income, this is all very straightforward, except for the part where interest and returns exist and you can use wealth to exponentialize your income.

I'd be happy with a 90%+ tax rate on any income over 10mil. Billionaires should be legally prohibited from existing, "but their shares! their stocks! it isn't liquid money, you can't just redistribute it!"

You can redistribute it to the workers who actually provide value to those stocks.

100mil seems like a reasonable cap too, imagine spending $100,000,000. You can't.

 

[AdamCrock]

You can redistribute it to the workers who actually provide value to those stocks.

No can do sir, human nature I'm afraid, sad but true. Wealth does not generate wealth on itself. Sure there are stocks but they represent of "what we are doing with our wealth" rather than our actual wealth. Stocks are "trust" we are putting in actions of others so it is a dynamic, chaotic thing

 

[Patine]

There are two kinds of wealth: assets and income. Income inequality is a huge problem in the US and the world.

This NPR artilce is all about the new centibillionaires and Bob Dylan just sold his song rights for something over $300 million.

So setting annual income aside and focusing on assets, how much is enough? Should asset wealth be capped? Should it just be heavily taxed? Is there a level where once a household/person/family has that much that is all they can have?

I choose various levels, please post your own thoughts.

Once a household crosses a limit, what happens?
Should wealth be donated?
Should it be passed to children?
Should the government get all excess wealth?
Should grandfathering be allowed?

Remember asset wealth is not income wealth even if it generates income. Income is a different question.

Everyone, and every profit-generating organized endeavour, should pay taxes in a roughly equal proportionate scheme comparable to what they make. Without exception. A charity, religious group, philanthropic NGO's, and other normally tax-exempt groups should have to be able to prove, without loopholes, cooking the books, or an automatic assumption by using such a label, that they're not actually making meaningful profits to keep tax-exempt status. Loopholes as a whole in this regard should all be closed.

 

[AdamCrock]

Loopholes as a whole in this regard should all be closed.

Totally agree !

Everyone, and every profit-generating organized endeavour, should pay taxes in a roughly equal proportionate scheme comparable to what they make.

That is a gradient tax , and as I've said there's a "but" in it because I think that self employed should pay less than corporations.

 

[Birdjaguar]

@El_Machinae Then add it back if you like.

 

[AdamCrock]

CDPR actions for example - worth it or not ? Will they'll be a success or a total failure , "the jury" is still unsure , are You ?

There are many, many more notable examples from history ! - for example : "Will Napoleon win or loose the war?" - that one was rigged by Rotshields , but that's another story ....

 

[cardgame]

No can do sir, human nature I'm afraid, sad but true. Wealth does not generate wealth on itself. Sure there are stocks but they represent of "what we are doing with our wealth" rather than our actual wealth. Stocks are "trust" we are putting in actions of others so it is a dynamic, chaotic thing

You absolutely can do, not sad but it is true