[balance_factor]

It's interesting what words are not in the article. Words like heir, inheritance, profit, interest, rentier. The word rent is there, but assumed as a tenant, not landlord.

I assume the Forbes 400 richest are in the 1%. How did the Koch brothers get their $100 billion? Where did the Waltons get their $140 billion? Where did the Mars family get their $75 billion? The article makes it sound like these people became rich when they decided whether or not to go to law school.

It's important to note how in the US how FIRE (Finance, Insurance, Real Estate) and health care affect the economy. But a lot of what puts people at the top is at which hospital they took their first breath.

[blunte]

The 1% is still a large number of people, and the people you refer to are the .1% or fewer. That's not to say that their methods of wealth accumulation aren't worth discussing, but apparently that wasn't the group that this article was focused on.

[ameister14]

There are millions of people in the 1%. The 400 people at the very top aren't going to come into it much.

[hn_throwaway_99]

But even within the 1%, the income distribution is highly skewed, i.e. those 400 people are responsible for a very sizable total of the overall wealth within the 1%.

[uiri]

Income distribution and wealth distribution are not the same. It is perfectly possible to earn $500k/year (which would put you in the top 1% of income distribution that this article is talking about) and spend every penny of it, leaving you at the end of the year with the same amount of wealth that you had at the start of the year.

Similarly, it is possible to earn $200k/year (not in the top 1% for income) and save very aggressively.

[MuffinFlavored]

i'd be curious to know around what portion the 400 people are responsible for

[llamataboot]

"With a combined worth of $2.34 trillion, the Forbes 400 own more wealth than the bottom 61 percent of the country combined, a staggering 194 million people. The median American family has a net worth of $81,000. The Forbes 400 own more wealth than 36 million of these typical American families."

http://www.ips-dc.org/billionaire-bonanza/

[diggernet]

According to that article, the 1% are worth around $26 trillion. So to answer the Muffin's question, looks like the 400 have just over 10% of the 1%er wealth.

[jjeaff]

That is the favorite to parrot around. It's not that impressive considering the large percentage of the world's population has a negative net worth.

http://blogs.reuters.com/felix-salmon/2014/04/04/stop-adding...

[hn_throwaway_99]

That quote also included the comparison to the median family net worth.

[5555624]

The quote says, "... the bottom 61 percent of the country combined, a staggering 194 million people." It's not comparing the number to the world's population.

[jjeaff]

Looks like about 1.9%

Estimates put the total net worth of the world's richest 1% at 140 trillion.

The Forbes 400 has about 2.7t net worth.

[aaronbrethorst]

The Kochs inherited a $680mm fortune. I was just listening to a great podcast about them, as a matter of fact: https://crooked.com/podcast/dangerous-dark-money/

[civilian]

Just for a balanced outlook, you might listen to Freakonomics' interview of Charles Koch: http://freakonomics.com/podcast/why-hate-koch-brothers-part-...

[aaronbrethorst]

Here's a response to Dubner's interview: https://medium.com/@maxwellllindquist/freakochnomics-how-ste...

[jjeaff]

Not much of a response. The interview treated Koch influence on politics as a forgone conclusion. (Because it is and Charles didn't seem to argue otherwise).

The point of the interview was to learn about his personal philosophy. Something of which wouldn't be of much interest were it not for his huge amount of influence (that, again, no one is arguing).

As for the final thrust of this response, on how Koch helped stopped a supreme Court nominee, it's likely nothing nefarious. It would be the same as any citizen. Contact your congress people. Difference is, they are going to really listen to the billionaire donating money to their campaign a bit more than your average Joe.

[aaronbrethorst]

> it's likely nothing nefarious

It's legal because of the Citizens United Supreme Court decision, but I hope that, before the Koch brothers pass away, we'll see a constitutional amendment overturning this egregious decision.

The idea that money = speech is toxic to democracy.

[0xcde4c3db]

I don't see how to tackle the fundamental difficulty of regulating "soft money". We can surely do better than McCain-Feingold, which leaves the "call Senator X and tell him it makes you sad when he kicks puppies" loophole. However, it's going to be difficult at best to have meaningful legislation against "awareness" ads or even more abstract culture war stuff like what the NRA has produced lately. I think we have less of a legislative problem than a culture problem.

[civilian]

So, what makes newspaper exempt from this? They can publish opinion pieces on who to support, and they are spending a lot of money in producing newspaper. Surely that _should_ violate McCain-Feingold? Except it didn't, because there was a special exemption for media. What makes that fair?

Let's say I'm an individual, and I support Santa Claus for president. But I'm also a famous personality, and I spend a million dollars to put on a free speaking tour where I support Santa Claus for president. Aren't I using money to support my speech? I'm not just using my mouth, I'm using my money to pursue my first amendment rights.

[slavik81]

The Forbes 400 has a self-made score rating the people on its list from 1 to 10, where higher means more self-made.

https://www.forbes.com/sites/afontevecchia/2014/10/02/the-ne... https://www.forbes.com/forbes-400/list/

[ryandrake]

Only numbers 8 through 10 are what any reasonable person might consider even remotely "self made" and lumping "middle-class background" and "upper-class background" into 8 (so that Mark Zuckerberg could be considered 8 instead of 7) is a stretch.

Any credible list of "self-made this" or "successful entrepreneur that" should include a disclosure of parental wealth.

[Solid_State]

Also, Mark Zuckerberg went to high school at Phillips Exeter. Their current tuition is $39,000 per year for day students, and $50,000 for boarders, of which he was one (although he went during 1999 equivalent tuitions). On the 1-10 self-made scale they have, with 1 being inheritance and 10 being self-made, he ranks an 8.

So that is the bearing for this scale they made to keep in mind - the 8 of 10 toward "self-made" are the type of people who were going to $50,000 a year high schools.

[haberman]

Financial aid exists. Phillips Exeter's web page says that families with income under $75,000 pay $0 of tuition: https://www.exeter.edu/admissions-and-financial-aid

I went to boarding school and came from a family of two church musicians. Some of my classmates came from wealthy families, others came from very modest backgrounds.

[ryandrake]

Raise your hand if you think Mark Zuckerberg got need-based financial aid. Hint: Both parents were doctors. Him being ranked at the same "self-made level" as a middle class kid that went to a state school is ludicrous.

[haberman]

I can agree with that wrt. Zuckerberg, I just take exception to the idea that every boarding school kid was born with a silver spoon in their mouth.

[slavik81]

That's true, though I like that it presents "self-made" as a scale rather than something binary. It allows acknowledging differences that would have been glossed over on a binary scale.

There are big differences between how Laurene Jobs (1), Charles Koch (5), Bill Gates (8) and Oprah Winfrey (10) became as wealthy as they are, and it reflects that.

[sidlls]

The fact that Bill Gates and Mark Zuckerberg aren't 5 or lower means this scale is not credible. Both of these individuals had access to substantial capital and social connections, well above any meaningful definition of "middle-class", to jumpstart their businesses.

[ameister14]

I don't think that's entirely fair - let's say your parents made $500,000 a year; if you made 90 billion, wouldn't that still be self-made? Sure, it's not as self-made as Carnegie or Rockefeller who would have been 10/10 as child-laborers turned wealthiest men in the world, but it's not exactly Trump or JP Morgan Jr., either.

[sidlls]

They're closer to Koch or Trump than anybody who labored from nothing.

Your hypothetical is why I agree a scale is better than a binary classification. I guess we might just disagree on the grade.

[ryandrake]

When your parents are among the top 1% in the country (and, presumably, act as a risk-cushion in case you were to fail), it is difficult for me to buy that you are self-made.

[batbomb]

The Laurene Jobs (1) is a bit dumb since she was raising the family, but whatever.

[dcre]

Everything you say is absolutely right about the very richest 0.01% -- unearned rents and inheritances are a big problem. But there are very few such people, and what really drives the top-line inequality numbers is the redistribution of income upward to the 5% or the 1%.

[humanrebar]

> ...unearned rents and inheritances are a big problem

The Walton fortune was earned... by Sam Walton. If he wasn't allowed to leave it to his family, what does property even mean?

[einarvollset]

Presuming you’re not trolling: take the implication of what you’re saying to it’s natural conclusion (no inheritance tax, no property tax, etc) and explain to me how we don’t end up with a feudal society in a generation or four?

In my view, there should be some correlation between hard work, smarts and financial outcome that isn’t entirely determined at birth.

[humanrebar]

> Presuming you’re not trolling

A rhetorical question isn't a troll. If someone is a troll, just flag them.

> explain to me how we don’t end up with a feudal society in a generation or four

As wealthy people die, they give their money to foundations and split it among their progeny and spouses. Some of them, it turns out, aren't great with money. The richest of the rich are no longer Carnegie, Rockefeller, or Weyerhäuser. A few generations out and the fortune is already spreading out naturally. Sure, some grandchildren are regional socialites and minor celebrities, but we're not exactly worried about which politicians Paris Hilton is palling around with.

[einarvollset]

I guess I don’t understand why smart people, like you seem to be, would want to design a system that inherently rewards nepotism instead of one that rewards innovation in the present.

Your system of “natural” fortune spreading was the default for all time until the modern welfare state came along. That’s what you want to return to? Hope that stupidity somehow spreads wealth the best?

[charlesdm]

Some of these people would've called it quits a long time ago though, if not for the ability of their offspring to have it (much) better than they do. Nothing wrong with that.

Some people are born with above average intelligence, or above average physical skills. Nothing wrong with that either.

Why shouldn't people be allowed to inherit significant fortunes?

[AstralStorm]

Because fortune on it's own does nothing. (As opposed to investment in manufacturing or research.) The result is stagflation and stagnation in long term.

Generally the tax is not supposed to be on inheritance but on unreasonably frozen money. Inheritance tax is a work around.

Skills when applied are supposed to be net positive for society.

Additionally with money comes influence, media and politics. Stagnation in those areas is risky too.

[humanrebar]

> Because fortune on it's own does nothing.

Where are the Scrooge McDuck money bins? The money is invested. Or it's spent and someone else has it.

Inheritance tax is a double tax. The money was already subject to income tax, capital gains, property tax, sales tax, etc. If the problem is that capital earnings accumulate faster than labor earnings, then we should just address that problem.

Property isn't about what it does for the rest of society. Property is a human right. Taxes generally are on voluntary actions for a reason. You choose to purchase something, own taxable property, emit carbon, etc. People don't choose to die, so it's an involuntary tax, something we should think about.

Lots of people don't care about the ethical implications for personal reasons, I guess, and that's their prerogative. But there's no moral high ground on not caring about the ethics of property rights.

[charlesdm]

There are plenty of heirs that continue to participate in business. Taking their money away isn't going change much, aside from taking their money away.

You act as if all inherited wealth is just sitting in bank accounts. Some is, some isn't, some heirs are active in and good at business, others aren't.

[clarkmoody]

You may glance at this to update your mental model of feudalism: https://en.wikipedia.org/wiki/Feudalism

The democratic urge to use the state for preventing the transfer of wealth between generation is sickening. It shows neither a respect for property nor liberty.

[dcre]

The Walton fortune was generated by Sam Walton's employees but captured by Sam Walton. What does property mean, indeed.

[humanrebar]

Those are two different subjects, then. There is inherited money and generated money. If we think it's easy to generate money the wrong way, then there's not much point in lambasting inheritances. That's actually a legitimate way to get money, at least compared to using (unfair) power and information imbalances to always give yourself an (unfair) sweet deal.

[AstralStorm]

One leads to the other. You can hire more specialists in making money and capturing labour.

[mamon]

Sam Walton's employees would not be able to generate that fortune on their own. You seem to underestimate the role of leadership, vision and other business skills in creating a company. Not to mention that many of those employees probably also made their own small fortunes along the way.

Also, you make it sound like Sam Walton somehow has a debt of gratitude to a society for it allowing him to get rich. I think that no such debt ever exists: in exchange for those billions of dollars Walton made society has already gotten something equally valuable in return, i.e. Wal-Mart mall in every city, providing cheap and easy access to all kinds of consumer goods. That's how business works: making money by providing services that society finds valuable.

[dcre]

The fact that leadership is necessary (which I do not deny) does not imply that some particular share of the resulting surplus value should go to said leadership. The share of surplus value captured by capital is something we get to decide as a society, and the idea that "as much as capital can manage to capture" is a natural and just share is a pervasive and pernicious lie.

[mamon]

But of course it implies exactly that. People should be rewarded for their skills and their contribution to the success of the company, which means that lion's share of profits goes to those on top. And no, we as a society don't get to decide that, because companies are privately owned by individuals, not by society as whole. Why should society decide how should I spend my money?

[mixmastamyk]

Can’t take it with ya.