The vast, vast majority of wealth (to the wealthy) are in form of company ownership, stocks.

So let's say you start taxing the ultra-wealthy based on their assets. They then have the option of:

1) Make the company pay out dividends, so that owners can afford to pay their wealth tax. Not ideal, because what happens during bad years where there's no dividends to be paid out? Or if companies want to re-invest in the company?

2) Sell stocks. Again, not ideal. This would mean that you lose some ownership year by year.

3) Take up personal loans to cover taxes.

etc.

Note, I'm NOT saying that we shouldn't do anything. But this is just the consequence of such assets (stocks) being the dominant asset among the wealthy.

There is a certain tautology to "tax the rich" - a country can't exactly tax the poor. The poor have no money. Taxes on poor people are more about the principles of fairness and to some extent transparency than because they have the financial resources to contribute meaningfully.

It'd be interesting to do the same graph by real consumption. I bet it'd be much more equal - most of the wealth is tied up in systems that keep the country ticking over and are only providing paper benefits to the owner. Which is why I say "transparency" - once you track what happens in real terms, "taxing the rich" almost certainly becomes "everyone ends up with less". If you take real resources away from the person who owns the McDonald's ice cream machine in real terms I have a hard time seeing how it won't come out of the lifestyle of the dude buying icecream. The person getting the money wasn't consuming anything real.

Norway has a wealth tax (1.1% nominal, but there are tricks), but we also have almost as bad wealth inequality as the US (by Gini). Wealthy people are furious to the point of fleeing the country because it really is the one tax they can’t (entirely) escape. But it certainly doesn’t “fix” wealth inequality.

Also, it doesn't have to be tiny at all.

Why couldn't there a wealth ceiling? Let's take $1B per person, everything above that is taxed at 100%. Would it destroy the capitalist dream and people would lose motivation to grow their wealth, or would it stimulate cooperation and wealth distribution?

The total income from tax increases is relative to the gross income. The gross income of the 1th percentile of earners in the US is ~$3.3 trillion, whereas the gross income of the top 25% is ~$10.3 Trillion. Levying a tax against only the top 25% sans the top 1% would yield more taxes than the inverse. Small increases on large brackets tend to generate significantly more tax revenue than large increases to small brackets.

What if we didn't just tax them, but made the whole system fairer so money was distributed more evenly even without the government as a middle man?

Increase wages.

Existing taxes are mostly on income, not wealth, and the US has one of the most progressive income tax systems in the world. Confiscating some fraction of Tesla and SpaceX will destroy lots of economic productivity for a one-time bump; it's a worse trade-off than just printing however much money and taking the value through inflation.

This is so very very relevant.

Top salary earners, who do manage to save somewhat for retirement end up getting punished by these wealth taxes as well, especially since, generally, you need money in order to be able to move money around, in order to be able to save money on these sorts of taxes.

From 2014 to 2018 Bezos effectively paid a 1 % tax rate.

Tax on wealth - or in reality tax on unrealised gains is absurd, it's a tax on a cat in a box.

There are two versions of wealth taxes for nonliving people that make a lot of sense:

   1) Endowments, Trusts, and nonprofits
   2) The Estate Tax

Yeah but every time anyone actually does implement a wealth tax they start it at like $500k or some similarly stupidly low amount and then everyone starts (somewhat rightfully) complaining that granny has to sell her house because she can't afford the tax.

It seems to obvious to me, like just start it at something like $5M. Nobody will be affected who can't afford it. It's like they're trying to implement it in a way that makes people hate it.

What is the point against wealth tax? That the rich will flee, leaving us.... better off in every possible way?? This is like that episode of futurama where fry befriends the parasites he found at a gas stop

Gonna make a law preventing them from moving away first? Your idea has been tried before. It reduces total tax receipts.

> I don't think most Americans have a problem with rich people buying nice houses and nice cars, and using their wealth to pay for private staff.

Think again. The demand from rich to park wealth in X, Y, Z makes prices go up. Just imagine that the RAM prices fueled by AI spending is a housing market. More money rich have, less affordable the life for the rest is.

And don't forget that speed of their wealth growth is way faster than anyone who sells their labour.

Ah. And we did not even talk about "hidden" wealth thingy... All these numbers are official ones.

I don't think most Americans are thinking about their 401Ks when it comes to corporate behavior. They're thinking about high prices, lower quality, poor service, externalities(pollution and such), low wages, poor working conditions. I don't think public markets will fix those things, and some argue they'd make them worse.

If I have to read the phrase "paper wealth" one more freaking time...

Paper wealth is a real problem (and the financialization of everything has made more paper wealth appear than imaginable) and your "illiquid" stock can cause all sorts of fun when various thing try to force you to mark-to-market something that basically doesn't have a market (I'm sure you'd sell your shares for $1 billion, and be insulted if I offered you $5 total, so they must have some value but good luck finding what that is AND realizing it).

You also have this with houses in California (and more and more, the entire country) - a family in a house that they pay $x per month on is not likely to really feel different if you tell them the house is worth $250k or $500k or $5m - because the price will likely be "in line" with those around them and so actually getting access to the "wealth" is difficult - the only real way is to move far away.

I feel a big part of the problem is we've made the world great for those who know how to navigate it, but horrible for those who don't (or can't). If you are disciplined from the beginning, always save 10% of what you make into retirement 410(k)s, 10% into rainy-day funds, spend less than 30% on housing, you're going to do quite well - but that's a small portion. Seventy years ago you could be a near literal moron, work at the factory, and live a good life - because the company handled your pension and healthcare without asking you to make decisions that frankly most people aren't capable of making - and it was difficult to leverage yourself to death.

Most people don't give a shit about wealth inequality if they can live a good if humble life without undue stress.

Elon Musk existing doesn't bother me as long as I can provide for my family and feel I'm getting a "decent deal". But if I'm overworked, underpaid, drowning in debt, and prices are rising, his existence is going to be a lot more annoying.

(One of the problems of publicly-traded companies is manager's capitalism - https://ia601506.us.archive.org/26/items/bogle-managerial-ca... - both really come down to nobody actually owning something in the meaning of taking responsibility to the thing, because ownership is so diluted it basically has no meaning.)

I'm with it, but "let them eat musk" just sounds icky.

I think you are looking at wealth vs. income?

Wealth. It's mostly price of the house for median people

yeah I was really surprised to see this post which has 240 points and over 200 comments within 3 hours got pushed to the third page of hn

https://dreamagainusa.org/method

> “What we think” and “Ideal”

> In 2011, Michael Norton and Dan Ariely asked more than 5,000 Americans how they thought wealth was split between the five fifths of households, and how they would ideally split it. The Companion spreads those five shares across all 100 percentiles of the 2026 wealth total in a smooth curve (Appendix 3). Many different curves fit five numbers, so these two shapes are only illustrations. The actual bars come from percentile-level data. These two curves do not.

This is shorthand for “the total wealth of the richest 0.1% of the population is greater than the total for the remaining 99.9%”, rather than the trivial “the individual wealth of each member of the richest 0.1% of the population is greater than that of each member of the remaining 99.9%”.

You don't get it.

It's not "poorer society with fewer inequalities." That's what they always say. It's never that. A society is not "richer" because the amount of financially backed power is one concentrated set of hands.

That's it. That's the tweet.

seems to be a general rule of life, some people are just born with the right combination to be really good at a certain game at a certain point in time. The only issue with wealth is that they can influence other games in which they have no ability just the same and that is dangerous for a democracy. Imagine if roger Federer was messing with the elections just because he was the best at tennis. Tech must be one of the few fields where someone believes that they are good at everything just because they made it.

"Closer" in what sense? Does Elon Musk have a markedly more lavish lifestyle than them? Is his retirement safer? How many politicians are campaigning on investigating, regulating and prosecuting the hundred-millionaires? Do media run scare stories about the drug use and sexual promiscuity of the hundred-millionaires, suggesting that they have children from too many partners?

"Value creator" .. You truly don't get it either. People like this are just aggregators. That's it. Magnet. They attract stupidity and power and money, and once they have it, the gravity takes over. That's all it ever was.

They're not "value creators". They're human beings that were given immense opportunities, disproportionately available avenues of luck, and happened to be able to find people to do their labor for them on the backs of the needs of the world.

What the ever living hell do you think the "90% of people" are doing? They're feeding each other and selling houses to each other and stocking shelves for each other because they have to because their labor and money is being stolen from them by this stupid abstraction that they are are "value creators".

Ugh.

How would you define value creation?

> Most people here probably have around $5-10M in assets given we’re mostly in tech

Nothing against you OP but this the perfect highlight how out of touch HN can be from the reality.

> Most people here probably have around $5-10M in assets

There is no way this is true. FAANG pays well, but that is still an eye popping amount of wealth unless you're an executive or absolute top-echelon engineer.

> Most people here probably have around $5-10M in assets given we’re mostly in tech

Even in a SV world I'm trying to get my head around the logical leap that gets you to this number. Median comp in SV is <500k - that's 20 years in the business to earn $10m ignoring taxes & your actual living expenditure. Obviously we can jump that with equity, but that's still not moving the dial far enough for the "majority" to be up at those heights.

I don't see how we're getting anywhere near these figures without generational wealth (assume this is the answer).

> Most people here probably have around $5-10M in assets given we’re mostly in tech.

Maybe if you are in SV. I know this post is about the US but tech in EU definitely doesn’t put you in the 10m€ bracket

"before i joined FAANG i was poor"

I dont think that's in the books for everyone

> Most people here probably have around $5-10M in assets given we’re mostly in tech

Some European making 3k/month net probably wept reading this.

I think your comment strikes at an issue that everyone feels but is hard to articulate - there's true poverty (Appalachia, say) and then there's "working-class poor" which you can try to define but nearly everyone puts themselves into it. Perhaps a better term is "paycheck to paycheck" - by almost any measure, anyone gainfully employed in the USA is rich beyond the world's wildest dreams - but telling a family making $40k a year that they make more than 90% of the world doesn't help.

I have a box full of cables, that's what I have.

An awful take from someone who clearly hasn’t studied California itself.

Around 17% of CA residents live below the poverty line, which means MILLIONS of adults that are not students. Elderly are a significant chunk of that number.

https://www.ppic.org/publication/poverty-in-california/

https://calbudgetcenter.org/resources/young-californians-fac...

If someone works for 50 years, and earns 100'000$ per year, he will have 5 million dollars at the end.

If he manages to not spend anything, like on housing, or food.

This really only applies to certain class of SV people who've ridden the tech wave by arriving at the correct time.

Not sure about that "most people here". Maybe in SV? Not in Europe.

If I were to liquidate my whole existence, I'd probably end up at maybe 300k€? Maybe? And that is already rather high up here in Germany.

I'm not sure it applies to SV either. Like definitely some, but not even most.

I’m in NYC and I don’t make that kind of money.

> Most people here probably have around $5-10M

I expect most people here to certainly be nowhere near that.

> Most people here probably have around $5-10M in assets given we’re mostly in tech.

You would be surprised. Not only because, as you point out, recent graduates often have a negative net worth, but also because people tend to increase their spending in lockstep with their income.

Saving millions takes the intersection of multiple factors: sufficient disposable income, prioritizing investing over lifestyle, long-term discipline to stick to the plan, and luck to keep it all going smoothly.

>Most people here probably have around $5-10M in assets given we’re mostly in tech.

In yen perhaps.

Jaw dropping that you would think that, even in SV. Many people in tech are losing their jobs to AI, many cannot afford a home.

You're looking at the tower above but maybe you should look at the valley below.

It’s not about “cash at hand”, it’s about who owns “stuff”. In days past people knew that the aristocracy owned them, their families, the land they work, and the output of their work by a God given right flowing from the anointed King. It was easy to see too - those people living in palaces up the hill owned everything, you owned nothing.

It’s more hidden now. We all have rights and freedoms and whatnot. But there are still people who “own stuff”, and people who don’t. With shades of gray in between those two extremes. It’s good to be cognizant of the system you inhabit relative to what has existed throughout history so you can make good decisions and position yourself accordingly.

Don’t do the First Name Last Name thing and then get the ratio wrong.

I used to buy this sort of arguments, but then saw him fork $45B to buy Twitter, on demand, so...

> his companies are paying people and other companies that pay people

Yes, his companies, not him. He's not doing much, except distracting part of his workforce to work on vanity projects such as flying cars or mile-long vaccuum tubes, or spending some of his vast wealth to buy politicians that will further the cause of wealth inequality. Get rid of him, and the system works much better for everyone. Him and others like him.

> this is how much his companies are estimated to have

Not even ‘to have’, just ‘to be worth, if all of their shares could be sold at the price of the recent ones’. It’s a number only loosely (albeit obviously positively) correlated with actual spending power.

Elons ownership of those companies is not what puts food in people's fridges, nor is that amount of power concentration a natural, good or even defensible thing.

The whole point is that he shouldn't be able to exert autocratic control over large swathes of the economy and control that many people's lives.

this is such a tired argument, we'd probably be better off splitting musk into a million millionaires than having it all bottlenecked into one person

[dead]

But how can we tease people and instill them hate if we're being reasonable with arguments?

I don't disagree with you. Obviously a doctor can bring in a lot of money. In the same a stock can be valued as the sum all future cash flows w/ a discounted cash flow analysis, a doctor's future income can have a quite high valuation.

That being said, one accident or illness that strips away that doctor's ability to earn, leaving them in a soul crushing amount of debt that can't be discharged via bankruptcy. Their debt obligations are real.

I have, and will always have, a simple rule when evaluating job offers: can I pay my mortgage with that today? No one is feeding your broke neurologist based on future returns.

Do you also flat out reject the idea that it is raining because there will be sun later?

With this kind of wealth distribution, there's no point doing any job which services regular people. Everyone should become an informant, bodyguard, lobbyist or propagandist for a rich person. That's going to be the only kind of job that pays in the future.

Look at that last bar; consider just the annual yield or interest payment on that wealth; soon, it's going to be more than all other bars combined. If people understood the situation, they would all stop working and start making lists of who these people are and work for them. That's the only logical (legal) thing to do. Every other job or career is a waste of time.

Are you suggesting we rob people?

Opportunity doesn't pay my bills.

“Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” -- H.L. Mencken

Shoot yourself in the head or cut your wrists with a knife?

Those are your choices. Choose freely!

Is the US two party system democracy working as intended?

not democracy, but capitalism

Calling the USA a democracy when you don't even have a right to get a work permit to actually vote is insane.

> Most of that wealth is tied up in assets offering services for americans

Yeah. Like renting a house for a mother of 2 children who will never get her own by selling her labour, while the renter uses her money to buy more units.

> Most of that wealth is tied up in assets offering services for americans (servers / warehouses). It would be much worse if the rich decided to spend all of that on consumption rather than keep reinvesting it in assets.

Why would that be worse? What online services are so important that it's better to have them than to lift some people above the poverty line? Rich people spending is the next best thing after taxing them - it distributes their money and provides jobs. It would strictly improve the society if Bezos spent lots of money and folded his servers and warehouses - in so many different ways...

The same wealth could be tied up in assets that are _owned_ by the americans and offer services to them.

Services that have an incentive to serve said americans, because it is them who own them.

You are completely right that this capital is super useful for society. It would just be infinitely more useful if it was in the hands of society.

Disagree.

A large portion of billionaire wealth isn't reinvested in productive assets. It comes from holding onto assets like corporate shares and land that grows in value based on the asset's ability to extract profit or rent. Or from distorted (speculative) demand for that asset that is completely detached from its productive output.

Someone like Bernard Arnault is worth around $160B (wealth from luxury brands like Louis Vuitton, Dior, and Tiffany). That paper valuation exceeds the total national wealth of many entire countries: https://en.wikipedia.org/wiki/List_of_countries_by_total_pri...

You should care about equality because inequality tends to make places worse for everybody. Yes that includes those rich people. You can't go to the beach because it's all built full with private resorts. Those rich people can't walk the street and have to live in walled villa's for fear of crime. They also can't easily get married to who they want because they have to hold their assets. Vietnam is poorer than South Africa per capita, but significantly safer and more pleasurable to live. Would you rather be top 10% in South Africa or Vietnam?

What is interesting is that this was true centuries ago too. Life as a noble in the middle ages was stressful as hell and you couldn't even decide on your own lovelife. Read Seneca and the first thing he writes is that Augustus (whom he knew personally) was constantly complaining about his busy life and dreaming of a retirement that never arrived.

>The point is a rising standard of life.

You or the farmer you buy food from competes for farmland with Bil Gates. You or the one providing your house builder with wood competes for lumber forest with Alex Karp.

The list goes on and on.

It appears trough technological innovation the standards of life rise in many ways but trough innequality it can affect the standards/ affordability of our basic needs.

This is about wealth inequality, i.e. how far the scale is leaning. This has, as the website explains, some funny effects: looking from the top, you are effectively starving the people that pay you and your descendands. That might work for a few years, but if everyone's hungry it's gonna be heads on pikes no matter how many bunkers you build and how much you pay for personal protection.

Wealth imbalances are bad largely because many assets have upper limits on available quantity, ie. the amount of land in most countries is relatively stable. If those assets are hoarded by a relatively small number of people, it's much harder for less wealthy people to become more wealthy. Our entire socioeconomic system is based on the premise that one can work hard and change their lot, so making sure that's actually possible is important for societal stability even if you don't have any religous/moral/ethical qualms about hoarding wealth.

If you are trying to buy some place to live, it doesn't just matter how much money you have, it also matters if there are lots of people many times wealthier than you bidding for the same realestate.

More money doesn't create more things to buy or more people making things, its just means more money competing for the same things to buy. Other people having more does diminish your share, of the cake. Yes, we can make the cake larger, but the best way to do that is for more people to get more opportunity to fulfil their potential, by getting a reasonable share to do so.

> my life is great. I don’t even understand why anyone cares about equality

Who do you want to educate from that position? You or others?

Three good reasons to care about inequality itself:

1. Outsized political influence (in theory can be mitigated by laws controlling corporate spending, but obviously those laws themselves are subject to manipulation by the rich and powerful)

2. Distortion in who the economy serves. The beauty of capitalism is that it's a problem-detection and problem-solving system. If a narrow set of people have a huge portion of money, the economy becomes unduly optimized toward satisfying their wants and needs.

3. Despite best efforts, we ultimately must share a lot of the same commons. Even being a billionaire in NYC or San Francisco can't really give you a walk to work or your child's school that feels as safe as it does in a more equal society that takes better care of its unwell and poor.

People care about equality because the absence of it is inequality, and that leads to political control. Even if you live a good life today, it is not guaranteed. Democracy, human rights, all can be eroded if everyone ignores politics and the economy.

You’re probably not one paycheck away from homelessness, and probably have the protection of the legal system provided you don’t upset the wrong people.

But you’re probably one health scare away from it, you just don’t realize it.

Volunteer at a soup kitchen or a food bank near you.

Do you care about concentration of power in a single person or single family? What happens when you have conflict with someone who has orders of magnitude more purchasing power than you? Do you think it's good or bad for the social order or democracy if one individual is able to exert more power than an entire city or state just based on inherited wealth?

>I don’t even understand why anyone cares about equality.

Because most people are (IMO wrongfully) jealous of the rich. They have a problem with the rich even if it's legitimately earned wealth.

Quality of life is going down my friend.

Retirement age keeps increasing, public healthcare keep getting defunded. My tax money is getting used to enrich war mongers and my cost of life keeps increasing as a result of all of that.

Also my constitutional rights are ignored daily.

You understand why I might not be feeling very happy that YOU are doing great?

Yeah. Wealth Inequality is a trojan horse for socialism.

The point should be to raise the floor, not put in place a ceiling.