[kpmcc]

There is a method for dealing with widespread inequality coinciding with generational wealth transfer, it’s called taxation. Tax transfers of wealth. It’s not complicated and doesn’t rely on the goodwill of ‘values-driven, digitally native, and community oriented’ young people.

We have a system designed to incentivize greed. Gross inequality is the result. Taxation is one viable method to deal with such a failure mode.

[imtringued]

The economy has the equivalent of a permanent memory leak. The Austrians decided to restrict the amount of memory (money). The economy crashed like a program running out of memory.

Keynes said, let the memory leak and just get more memory. This works until it doesn't, which is still a bigger win than losing multiple times.

Meanwhile Gesell said, if you want finite memory, then you must penalize memory consumption.

The amount of memory that an economy needs depends on the total number of transactions (total throughput) and how fast each processor is (sequential throughout).

Many slow processes means you need more processes in parallel, which means you need more memory.

Curiously, transactions are taxed by the government. This means that taxation minimisation implies delaying and minimizing transactions. There is an inherent bias towards being slow. It seems like tax policy is completely backwards in most countries.

[throwaway48476]

Wage suppression has had a far bigger impact. Governments have lots of policies to prevent the 'wage price spiral' because they don't want the real dollar term asset distribution to change.

[mmooss]

It's almost like crowd-sourcing, while being more consistent, democratic and fair.

As long as we're discussing it on this level, why tax transfers of wealth instead of wealth itself?

[mvdwoord]

It's a method, for sure, but not a fail-safe one nor the only one. There seems to be an active experiment going on in the UK right now.

[bargainbin]

Care to elaborate a bit on the UK comment, because it’s not clear what you mean or if you even live here?

The UK doesn’t tax the wealthy or their corporations either. Meanwhile high earners like myself are kept from even middle class aspirations by aggressive income tax.

All signs point to that income tax, specifically at my bracket, increasing in the next budget, leaving me ostensibly poorer than people earning less than me.

The whole system is broken because they refuse to tax the wealthy at an equivalent rate to the working class.

[mvdwoord]

I do not live in the UK, but across the channel.. Had to look it up a bit as I do not follow this in great detail but there is some significant debate there on inheritance taxes I believe?

I appreciate that this is a complex topic, but the point I tried to make in response was that these things are rarely as simple as people make them out to be. Increasing taxes on wealth transfers could have all sorts of side effects which are not easy to link as nothing in the economy happens in isolation. I thought the UK was perhaps a relevant example, as France and Sweden have been recently as well.

The economy is not a zero sum game, and the rich can get richer while the poor get richer as well. Maybe this is not a fair representation of what is going on, and I am certainly no expert on the US economy, but the whole "just tax the rich" mantra does not seem obviously true or effective to me.

I agree though that the system as a whole feels broken.. but also, because it is "small club, and we ain't in it". Wealth has a significant influence on policy...

[rsynnott]

That was blown out of all proportion, tbh; the UK used to have a tax carveout for the upper-middle-class which allows unused pension funds to be inherited tax-free, and this was in practice used as a tax avoidance mechanism, and that's going away, but it really isn't a particularly big deal in the scheme of things.

(Or there was another change to the privileged treatment of farms and family businesses, but again, you're not talking about a huge change.)

[aydyn]

How can you be poorer than people earning less than you? Thats not how progressive tax works. Am I misunderstanding something or is UK that messed up or something?

[mvdwoord]

Not how progressive tax works, but it is the reality, e.g. in The Netherlands. Once you go over certain thresholds, you lose certain benefits leading to a poverty trap in some sense where the incentives of the system do not align with the implied goals of a healthy economy.

[StackRanker3000]

Yes, it’s similar in the UK.

If you make over £100k, you lose your personal tax-free allowance. That means that your effective tax rate from £100k-£125,140 is 60%

That doesn’t in itself make you worse off than people making less than you, but when one parent makes over £100k, that’s the cut-off for receiving 30 hours of free childcare, as well as additional tax-free childcare up to £2000

So if you have small children with childcare needs, you can suddenly be worse off as soon as you or your partner hit £100k

One way to avoid both of these is to pay the additional money into your pension instead

[aborsy]

This method has problems too. There are more beggars in EU than in other countries in my experience, overall is not doing well.

[lenkite]

> There are more beggars in EU than in other countries in my experience,

Are there really more beggars and homeless in the EU compared to the US ? Admittedly, my anecdotal viewpoint is only that of a visitor, but having been to both, it seemed US cities had a far more severe problem.

The first time it was a bit of a shock to me - the US had this patina of glory that crumbled for me after my first visit.

[rsynnott]

There's a question of what 'homelessness' means, there. So to take an example, Dublin counts 11,000 people as homeless, with ~120 sleeping rough. SF, a somewhat bigger city, but in the same size range, counts 8,000 people homeless... but with over 4000 sleeping rough. This is both a difference in temporary/emergency accommodation available, and a difference in definition (for instance I don't think SF counts couch surfing as homeless).

[neuronic]

Uh yea, thats because we tax everyone to hell EXCEPT the rich. Wealth inequality is a serious problem and we are moving to catastrophe sooner rather than later on the current path.

It's obvious why the ultra-rich are building bunkers and hide-outs. Those are of course scams by the building companies, as they give a false sense of security, but the idea of what is REALLY going on is obviously out there.

[quickthrowman]

> It's obvious why the ultra-rich are building bunkers and hide-outs. Those are of course scams by the building companies, as they give a false sense of security, but the idea of what is REALLY going on is obviously out there.

The main problem being, you can’t operate the bunker yourself. How do you ensure the non-billionaires on your staff don’t murder you and use your bunker themselves? This is assuming a catastrophe that forces a move to a bunker and changes the rules of society.

It’s an intractable problem, billionaires are reliant on the rest of us to do their bidding. That does not change in a crisis/catastrophe.

[aborsy]

* Wealth inequality in US is clearly a big problem. But it’s typically not a big problem in the rest of the world, certainly in EU.

* If you think taxes and donations will solve the problem with people who struggle with basics, you are wrong. Again look at the world, places like France.