[jivardo_nucci]

The simulation studies of Bouchard & Mezard show that, regardless of initial conditions, wealth distribution ends up a Pareto distribution with a small percentage taking almost all of the goods. The take-away of Bouchard & Mezard's studies: the very rich aren't rich because they earned it (i.e., because they are skillful or knowledgeable), they are rich mostly because they are lucky.

All my life I've assumed that, when people had a going concern or were rich, that they _earned_ their wealth. But Bouchard & Mezard says they're, for the most part, simply very lucky.

If luck, rather than skill, is the source of one's wealth, then has one "earned" that wealth? How can one lay exclusive claim to something given by chance? I would contend that no such claim can be made.

In particular, I would contend that income gained through luck is fair game for government acquisition through taxation, and if it is possible to distinguish that portion of wealth due to skill from that due to luck (and such appears possible), then the "lucky" portion is open game for acquisition to be spent or redistributed as decided by the powers-that-be.

Wealth Condensation: Why the Rich Get Richer (and the poor poorer): http://iwillknow.jesaurai.net/?p=387

The Mathematics of Inequality: https://www.austms.org.au/Jobs/Library4.html

FWIW Bouchard & Mezard are not the only researchers whose models say this:

Chance helps the rich get richer, simulation study finds: http://www.world-science.net/othernews/110722_chance.htm

[greggyb]

The high turnover of the top 1%[0][1] would suggest that there is a higher standard to be met to justify government intervention to redistribute the fruits of luck.

Since the income and wealth are transient, it would seem necessary to show that the government's redistribution leads to a better outcome than time's.

I'd be curious to hear your thoughts on this. I'd assume that the argument would be that the government achieves equity more quickly, but at a cost. It would be interesting to see the discount rate to justify redistribution now rather than redistribution with time.

The alternative argument that comes to mind is that while the people move over time, there is a constant influx of new luck-wealth to replace the old luck-wealth such that, though it is different money, there is a permanent "luck fund" of sorts that should be drained on a regular basis, else we will have a permanent inefficient "luck fund".

Again, I'd be interested to hear your thoughts.

[0]http://marginalrevolution.com/marginalrevolution/2014/04/mob...

[1]I don't have the time to find more sources, but there is indeed quite a bit of churn in the top income brackets, and we see similar in wealth brackets - these are not static categories of people.

[hackuser]

I'd go even further:

First, consider the distribution of wealth based on consequences of birth, which is pure luck: Race, gender, socioeconomic class of parents, parental 'skill' (care, skill development, investment in your upbringing, etc.), and location (e.g. Silicon Valley, rural North Dakota, or North Korea?). Where and to whom you were born is highly determinative of economic success, but clearly it is 100% luck and not skill.

Also consider how much of success is due to others. Consider Walmart, for a simple example. How much of the following did Sam Walton build himself?:

* Infrastructure: Roads, train tracks, airports, etc. for transporting the goods he sells

* The technology of that infrastructure: Who invented and developed automobiles, trains, airplanes, refrigeration, electric lighting (so logistics can operate at night), conveyor belts, electrical generation and distribution, IT, etc.

* The development of the human resources: The education that makes his workers literate and skilled to do their jobs: The schools, the teachers, the concepts, the textbooks, pencils, chalkboards ... we could even say language, mathematics, etc.

* The system of laws and government that protect his business and allow it to operate efficiently (e.g., via contracts, dispute resolution, etc.).

That's just a small sample of what Walmart depends on, that Sam Walton did nothing to provide. Sam Walton, and many others, built something very impressive and far more than probably anyone reading this, but it amounts to a sliver on top of a massive infrastructure built up by generations before him. He, like the rest of us, needs to contribute his share and build for the next generation, just like all who came before him.

[jivardo_nucci]

1. Concerning your first argument (consequences of birth):

Since the results of the process (birth and rearing) cannot, in a free society, be taken away from an individual and used to benefit others, then what might you propose as a socially acceptable solution? Perhaps a "white man's tax" to be paid by all men/women lucky enough to be born white? Or, to generalize, a "race tax" to be paid by all based on the current social or economic status of each race in the society? Perhaps a tax to be paid by anyone lucky enough to gain entrance to an Ivy League school (or Stanford) and so forth.

2. Concerning your second argument (success due to others):

This argument was presented by Obama in his "...you didn't build that..." speech of July 13, 2012: https://en.wikipedia.org/wiki/You_didn't_build_that

3. However, in summary, both arguments, although well taken and each worthy of discussion in it's own right, are clearly not the same as the findings that Bouchard & Mezard et al present.

Furthermore it is important to distinguish them from Bouchard & Mezard's. Merging these arguments together with Bouchard & Mezard's in public discussion would erroneously conflate all these arguments and weaken the impact of Bouchard & Mezard's findings.

[fsloth]

This result is really important when considering 'fairness' in taxation as well as when considering the ethics of tax evasion.

If financial aggregation is a feature of the system then it seems like tax evasion is not just someone taking 'their share' of the money which they earned somewhere else but it's closer to actually stealing from everybody.

Also, I think there are implications for the ethics of a global economy where communal services are financed from a local tax base and the profits leak to an entity beyond the taxation of the region.