[danhak]

> Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them.

You are inventing a complete straw man. That is not what I want nor is it what most other people who are concerned about wealth inequality want.

What we want are policies that do not make it so absurdly easy for those who already have access to capital to continue to accumulate wealth and influence at an exponential rate while those who are not born under such fortunate circumstances live with an ever-increasing disadvantage.

Of course this is inevitable to some degree due to the nature of compound interest. But there are ways to mitigate it. See: progressive taxation. Now it's time to take a look at other things such as the estate tax and taxes on capital gains and dividends. The latter are the most egregious in my estimation. The U.S. currently taxes income earned through labor, time and talent at a higher rate than income earned through investment, thus continuing to privilege those who already have access to capital

[Pyxl101]

> What we want are policies that do not make it so absurdly easy for those who already have access to capital to continue to accumulate wealth and influence at an exponential rate

What specific policies are those? Most people who advocate for such policies recommend taxation, which is what the GP is referring to: the government forcibly seizes the money. The GP is not really addressing a straw man when the most common solution is tax.

It's worth remembering that taxing is taking, so a "policy" that prevents people from becoming wealthy is just a societal license for seizing their assets.

Personally I've seen the government squander or tax revenue on pointless wars and ineffective programs like F-35, and would be happy for those who are fortunate to keep their wealth and invest it smartly; they will drive more positive change in society than the government will.

[adamlett]

When you say the government "squanders" money on projects like the F-35, it sounds like you think that the money spent just disappears and is gone, and all we're left with are some fighter jets of questionable value. But the money that the government spends goes back into the pockets of private citizens. Who then spend the money again, and spread it around. Silicon Valley, the symbol of entrepreneurship and self-made billionaires, owes it existence in part to huge, government sponsored, military and aerospace programs, ultimately funded by tax payers. A lot of private companies got very rich on the back of that. And now it's somehow unreasonable that the government wants to take some of that wealth and distribute it somewhere else?

[pas]

Redistribution coupled with corruption (cronyism) results in new oligarchs.

This is a classic trade-off, just like surveillance and security. If you estimate that the chance of abuse is sufficiently low, then yes, those are great things to have.

If not. Holy shit, you know the drill.

So, the problem is not income inequality (lack of redistribution, or the network effects (the compounding) of capital), but the rationality of decision making. The stability of the utility function of those who make the decisions. Which is the aggregate of the whole power structure.

Do we see a stable trend in good governance?

I'd say that the US could use some internal redistribution. Less spending on war on things and more on education and social safety stuff. (It'd be probably much better for the US to stop funding the useless manpower-hungry parts of agencies - like the TSA and all the terror chasers - and send those guys that would get unemployed over to work as social workers, or even just pay them to get a degree and do something useful.)

[vasilipupkin]

The issue is not the desire to redistribute per se. The point is it matters what you actually do with the money. Some uses are productive and some are wasteful. Soviet Union was born out of the desire to redistribute - and failed. So this discussion can not be had in the abstract

[grahamburger]

The same thing happens if someone gets rich and sticks their money anywhere but under their mattress.

[adamlett]

But that's what they do! The ultrarich of the world can live handsomely off the interest of their fortunes and don't ever have to touch the principal, which just grows and grows.

[zo1]

That money still goes somewhere. You don't get interest by keeping money under your mattress. You get interest by loaning it out, or the value of something you own increasing. And even if you've "bought" something that appreciates in value, you've anyways lost the physical money which is now being spent by someone else.

Which is almost the same scenario as the one you suggested. So ultimately, it seems your complaint is not of the money being used/spread/churning throughout the economy, rather than being hoarded under the mattress. But rather, it seems you're complaint is with the fact that the rich have it and it's not being taxed for purposes you deem useful.

[adamlett]

If I keep a million dollars in the bank, the bank can loan out a million dollars, and I earn interest.

If I spent half of that million dollars, then whoever got paid likely puts the money back in the bank and the bank can still loan out a million dollars.

This is in a nutshell why trickle-down economics don't work.

[manigandham]

Families this rich are not just static forever, they usually have lots of ventures and businesses that are contributing to their wealth. They are well invested, but that's not the only thing.

They also do spend and consume a very high amount and there is the inevitable dilution through the generations as families grow and each person uses their fortune in a different way.

There are plenty of ultrarich who are no longer.

[danhak]

Adjustments to the tax code can be revenue-neutral. Lower rates for earned income and higher rates on inheritance and investment income.

[bluecalm]

It depends how you define "we". It seems it's a very popular idea in Europe is a very high progressive income tax which punishes people who for example start their own businesses with close to 0 net worth, no capital and have a good year or two even if they haven't accumulated much wealth yet.

I am from one of the post communist countries and a party advocating 75% income tax for people who make more than 150k/year is gaining traction among my friends in tech. It is in fact a very common sentiment that "just tax the people who make a lot of money" is going to solve a lot of problems.

That's what the parent is addressing and it's in fact a very common view.

[kamaal]

>>What we want

Who is we?

>>policies that do not make it so absurdly easy for those who already have access to capital to continue to accumulate wealth and influence at an exponential rate

This will happen no matter what policy you implement very simply because if you want a society based on freedom and merit there are various motivations for people to do or not do things, like: choosing careers paths, making decisions to save and invest, how much time they spend on improving personal skills, how hard and how many hours some one is willing to work to achieve what they want etc.

Based on what your value system and what you want in your life, with all the priorities there will always be some one who is frugal, hard working, is making sound financial decisions, working on personal skills and doing all that who will grow exponentially in comparison to others.

>>while those who are not born under such fortunate circumstances live with an ever-increasing disadvantage.

Here is a hint, unless you are born in war torn Syria or are trapped in some African civil war or born with disease you are already in a 'fortunate circumstance'. You may not realize, which is a very different problem altogether. Either there systems like social security designed to handle the exceptions.

>>Of course this is inevitable to some degree due to the nature of compound interest.

A tip, compound interests doesn't work just with money. It works with skills, knowledge, productivity, experience. You literally have to enforce laziness as a law if you want to stop this.

[vasilipupkin]

The focus on raising taxes is misguided in the following way: we should first figure out which policies are good how much they would cost and then find the cheapest way to raise the money with the least number of distortions and disincentives - not start by raising taxes by arbitrary amounts