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Thoughts on money, taxes, and income inequality (very long)
7 years ago
General
An argument with some creature of amoeboid intelligence on Twitter got me thinking about this topic, and I'd like to know other people's opinions, especially those of people from other countries that may not be as... relentlessly capitalistic as the USA. Skip down to the bottom for a tl;dr list of my questions without having to read the novel. Context might be missing for a few, but they should all be fairly easy to answer.
The subject is, of course, money and how much is too much. Beyond all reason, a vast majority of the people living in this country are against taxes while simultaneously being viciously defensive of those things that tax money provides for them. Oddly enough, my fellow countrymen *gags* are not only against taxes on their income bracket, which usually falls into the category of lower or middle class, but they're also against taxes on the super rich. Now why would so many people, even those who are, for all intents and purposes, the working poor, be against a higher tax burden being levied against the richest people in the country? The answer is as simple as it is stupid. Many of these people hold the belief, either overtly or lurking somewhere within their psyche, that they will one day be rich, and therefore any obstacles placed before the rich today will be obstacles for them tomorrow. Needless to say, this is no less ludicrous than those who gleefully talk about "when" they win the lottery, but still it is as persistent as it is pervasive.
Next, I want to talk about the rich. Their minds are as inscrutable to me as those of an alien. They hate taxes at least as much as their poorer aspirants, if not more. But why? In my final year working at Comcast, the CEO of the company took home about $18.5 million. Even at a 75% tax rate (well above what it currently is) he would still net $4.6 million. More than most people would hope to earn in a lifetime. Is this gentleman being substantially disadvantaged by a higher tax rate? He still makes more than enough money to not only live, but live more lavishly than most of us could ever hope to comprehend. Yet he, and most others who make money on such a grand scale, not only fight taxation with the same vigor as those who can barely afford to put food on the table, but they also tend to hoard their money. Millionaires become billionaires, accumulating money they could never hope to spend, and still they want more.
Now, the philosophical questions. How much is too much? A lot of people will say that most millionaires and billionaires have earned their money. But have they? Have they really? Is it really possible for one person to "earn" thousands of dollars every day, year after year? Are they actually doing anything with that kind of value? I find that hard to swallow.
The best I can do is try to equate it to something I do with something a billionaire does and see if I can make sense of the work/reward ratio. I'm a writer. So is JK Rowling. Let's use that. JK Rowling, by writing the Harry Potter series, earned roughly $1 billion. Now, let's do some math. I know that each of her books can vary pretty drastically in length. I'm going to average out the total amount of time spent on the whole series as 7 work years, or 7 years of 40 hour work weeks. About 14,000 hours in total. That means that Rowling earned about $71,400 per hour of work. Is there any job or career that could or should be worth that much pay? Bear in mind that the BEST doctors generally make $500 per hour or less, excepting some special cases, and they are literally saving lives. So what justifies this massive disparity? Food for thought.
Next up is why this happens? Why is so much of the money so heavily concentrated in such a small portion of the population? How do some people manage to earn such an obscene amount of money when the overwhelming majority will never even make a tiny fraction of that amount? Is there anything that can be done to help to equalize things a bit? Unfortunately, no. Outside of taxation, there's no other solution. Let's look again at writers. I'm in the process of writing a novel. Does that mean I'm going to be making a billion once I release it? No. Perhaps it's because I'm not quite as good at it as Rowling. I'd like to think I'm at least 1/20 as good as her though. Does that guarantee me $50 million? Nope. Wait, wait, she wrote 7 books. I'm writing 1. That means I'll make about $7.15 million, right? Wrong. The fact is, almost universally, with millionaires and billionaires, they make their money in ways that doesn't break down in the sane ways as most of us do. They usually sell a product of some sort, be it movies, video games, oil, cars, computers, software...whatever have you. Thousands of people write books every year, yet even earning $1 million as an author would be an amazing success, far beyond even my wildest hopes for my book.
The fact is that there is no way to even out the money these people make. Every author makes a different amount per hour. If you fix the prices of books, then the authors who write things that are less popular will suffer far more than those who have popular books. The same goes for cars. If you make it so that all coupes cost $5000, all sedans cost $7500, all SUVs cost $10000, then what would happen? Everybody would own Jaguars and Ferraris while Hyundai and Nissan went out of business.
Okay, so price fixing doesn't work, how do we solve income inequality? We can't change human nature and make people only keep a reasonable amount and not hoard money. We can't fix prices to try to ensure a more even distribution of profits. What else is there? Forcible redistribution of wealth? Nope. We've tried that...well, "we" haven't, but other countries have. Communism. It didn't work out very well. That goes back to human nature. In order to control how much money everybody in a country gets, you have to grant almost absolute power to the government. Absolute power corrupts absolutely. Even if we manage to form an incorruptible government, humans aren't immortal. The incorruptible ones would grow old and die, and eventually it's a guarantee that someone would come into power with the intention to abuse it. Then that would be the end of that. So what do we do? At this point, we need to have strong taxation, especially on the rich. The rich will still be rich and the poor will still be poor, but maybe the gap won't be quite so pronounced. I don't know...I think capitalism is starting to show that it has a lifespan, and it's heading into the geriatric phase for the United States.
Finally, I'll sum up my questions that are scattered around in here. I certainly built a wall of text here.
1. What is your opinion of taxes?
2. Should the burden of taxation be placed more heavily on the rich? If no, why not? If yes and your reasons differ from mine, why?
3. Is there such a thing as earning too much money?
3a. Where is the line drawn between an appropriate amount of earning and an inappropriate amount?
4. Do you think income inequality is a problem?
5. What are your ideas on addressing income inequality?
6. Do you think, as I do, that capitalist systems have limited "lifespans" due to the steady concentration of wealth slowly strangling the masses?
6a. If no, why not? What do you think is currently happening and what do you think the conclusion will be?
The subject is, of course, money and how much is too much. Beyond all reason, a vast majority of the people living in this country are against taxes while simultaneously being viciously defensive of those things that tax money provides for them. Oddly enough, my fellow countrymen *gags* are not only against taxes on their income bracket, which usually falls into the category of lower or middle class, but they're also against taxes on the super rich. Now why would so many people, even those who are, for all intents and purposes, the working poor, be against a higher tax burden being levied against the richest people in the country? The answer is as simple as it is stupid. Many of these people hold the belief, either overtly or lurking somewhere within their psyche, that they will one day be rich, and therefore any obstacles placed before the rich today will be obstacles for them tomorrow. Needless to say, this is no less ludicrous than those who gleefully talk about "when" they win the lottery, but still it is as persistent as it is pervasive.
Next, I want to talk about the rich. Their minds are as inscrutable to me as those of an alien. They hate taxes at least as much as their poorer aspirants, if not more. But why? In my final year working at Comcast, the CEO of the company took home about $18.5 million. Even at a 75% tax rate (well above what it currently is) he would still net $4.6 million. More than most people would hope to earn in a lifetime. Is this gentleman being substantially disadvantaged by a higher tax rate? He still makes more than enough money to not only live, but live more lavishly than most of us could ever hope to comprehend. Yet he, and most others who make money on such a grand scale, not only fight taxation with the same vigor as those who can barely afford to put food on the table, but they also tend to hoard their money. Millionaires become billionaires, accumulating money they could never hope to spend, and still they want more.
Now, the philosophical questions. How much is too much? A lot of people will say that most millionaires and billionaires have earned their money. But have they? Have they really? Is it really possible for one person to "earn" thousands of dollars every day, year after year? Are they actually doing anything with that kind of value? I find that hard to swallow.
The best I can do is try to equate it to something I do with something a billionaire does and see if I can make sense of the work/reward ratio. I'm a writer. So is JK Rowling. Let's use that. JK Rowling, by writing the Harry Potter series, earned roughly $1 billion. Now, let's do some math. I know that each of her books can vary pretty drastically in length. I'm going to average out the total amount of time spent on the whole series as 7 work years, or 7 years of 40 hour work weeks. About 14,000 hours in total. That means that Rowling earned about $71,400 per hour of work. Is there any job or career that could or should be worth that much pay? Bear in mind that the BEST doctors generally make $500 per hour or less, excepting some special cases, and they are literally saving lives. So what justifies this massive disparity? Food for thought.
Next up is why this happens? Why is so much of the money so heavily concentrated in such a small portion of the population? How do some people manage to earn such an obscene amount of money when the overwhelming majority will never even make a tiny fraction of that amount? Is there anything that can be done to help to equalize things a bit? Unfortunately, no. Outside of taxation, there's no other solution. Let's look again at writers. I'm in the process of writing a novel. Does that mean I'm going to be making a billion once I release it? No. Perhaps it's because I'm not quite as good at it as Rowling. I'd like to think I'm at least 1/20 as good as her though. Does that guarantee me $50 million? Nope. Wait, wait, she wrote 7 books. I'm writing 1. That means I'll make about $7.15 million, right? Wrong. The fact is, almost universally, with millionaires and billionaires, they make their money in ways that doesn't break down in the sane ways as most of us do. They usually sell a product of some sort, be it movies, video games, oil, cars, computers, software...whatever have you. Thousands of people write books every year, yet even earning $1 million as an author would be an amazing success, far beyond even my wildest hopes for my book.
The fact is that there is no way to even out the money these people make. Every author makes a different amount per hour. If you fix the prices of books, then the authors who write things that are less popular will suffer far more than those who have popular books. The same goes for cars. If you make it so that all coupes cost $5000, all sedans cost $7500, all SUVs cost $10000, then what would happen? Everybody would own Jaguars and Ferraris while Hyundai and Nissan went out of business.
Okay, so price fixing doesn't work, how do we solve income inequality? We can't change human nature and make people only keep a reasonable amount and not hoard money. We can't fix prices to try to ensure a more even distribution of profits. What else is there? Forcible redistribution of wealth? Nope. We've tried that...well, "we" haven't, but other countries have. Communism. It didn't work out very well. That goes back to human nature. In order to control how much money everybody in a country gets, you have to grant almost absolute power to the government. Absolute power corrupts absolutely. Even if we manage to form an incorruptible government, humans aren't immortal. The incorruptible ones would grow old and die, and eventually it's a guarantee that someone would come into power with the intention to abuse it. Then that would be the end of that. So what do we do? At this point, we need to have strong taxation, especially on the rich. The rich will still be rich and the poor will still be poor, but maybe the gap won't be quite so pronounced. I don't know...I think capitalism is starting to show that it has a lifespan, and it's heading into the geriatric phase for the United States.
Finally, I'll sum up my questions that are scattered around in here. I certainly built a wall of text here.
1. What is your opinion of taxes?
2. Should the burden of taxation be placed more heavily on the rich? If no, why not? If yes and your reasons differ from mine, why?
3. Is there such a thing as earning too much money?
3a. Where is the line drawn between an appropriate amount of earning and an inappropriate amount?
4. Do you think income inequality is a problem?
5. What are your ideas on addressing income inequality?
6. Do you think, as I do, that capitalist systems have limited "lifespans" due to the steady concentration of wealth slowly strangling the masses?
6a. If no, why not? What do you think is currently happening and what do you think the conclusion will be?
