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Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it

• danhak 11y ago
  > Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. You are inventing a complete straw man. That is not what I want nor is it what most other people who are concerned about wealth inequality want. What we want are policies that do not make it so absurdly easy for those who already have access to capital to continue to accumulate wealth and influence at an exponential rate while those who are not born under such fortunate circumstances live with an ever-increasing disadvantage. Of course this is inevitable to some degree due to the nature of compound interest. But there are ways to mitigate it. See: progressive taxation. Now it's time to take a look at other things such as the estate tax and taxes on capital gains and dividends. The latter are the most egregious in my estimation. The U.S. currently taxes income earned through labor, time and talent at a higher rate than income earned through investment, thus continuing to privilege those who already have access to capital
  • Pyxl101 11y ago
    > What we want are policies that do not make it so absurdly easy for those who already have access to capital to continue to accumulate wealth and influence at an exponential rate What specific policies are those? Most people who advocate for such policies recommend taxation, which is what the GP is referring to: the government forcibly seizes the money. The GP is not really addressing a straw man when the most common solution is tax. It's worth remembering that taxing is taking, so a "policy" that prevents people from becoming wealthy is just a societal license for seizing their assets. Personally I've seen the government squander or tax revenue on pointless wars and ineffective programs like F-35, and would be happy for those who are fortunate to keep their wealth and invest it smartly; they will drive more positive change in society than the government will.
    • danhak 11y ago
      Adjustments to the tax code can be revenue-neutral. Lower rates for earned income and higher rates on inheritance and investment income.
    • adamlett 11y ago
      When you say the government "squanders" money on projects like the F-35, it sounds like you think that the money spent just disappears and is gone, and all we're left with are some fighter jets of questionable value. But the money that the government spends goes back into the pockets of private citizens. Who then spend the money again, and spread it around. Silicon Valley, the symbol of entrepreneurship and self-made billionaires, owes it existence in part to huge, government sponsored, military and aerospace programs, ultimately funded by tax payers. A lot of private companies got very rich on the back of that. And now it's somehow unreasonable that the government wants to take some of that wealth and distribute it somewhere else?
      • vasilipupkin 11y ago
        The issue is not the desire to redistribute per se. The point is it matters what you actually do with the money. Some uses are productive and some are wasteful. Soviet Union was born out of the desire to redistribute - and failed. So this discussion can not be had in the abstract
      • pas 11y ago
        Redistribution coupled with corruption (cronyism) results in new oligarchs. This is a classic trade-off, just like surveillance and security. If you estimate that the chance of abuse is sufficiently low, then yes, those are great things to have. If not. Holy shit, you know the drill. So, the problem is not income inequality (lack of redistribution, or the network effects (the compounding) of capital), but the rationality of decision making. The stability of the utility function of those who make the decisions. Which is the aggregate of the whole power structure. Do we see a stable trend in good governance? I'd say that the US could use some internal redistribution. Less spending on war on things and more on education and social safety stuff. (It'd be probably much better for the US to stop funding the useless manpower-hungry parts of agencies - like the TSA and all the terror chasers - and send those guys that would get unemployed over to work as social workers, or even just pay them to get a degree and do something useful.)
  • bluecalm 11y ago
    It depends how you define "we". It seems it's a very popular idea in Europe is a very high progressive income tax which punishes people who for example start their own businesses with close to 0 net worth, no capital and have a good year or two even if they haven't accumulated much wealth yet. I am from one of the post communist countries and a party advocating 75% income tax for people who make more than 150k/year is gaining traction among my friends in tech. It is in fact a very common sentiment that "just tax the people who make a lot of money" is going to solve a lot of problems. That's what the parent is addressing and it's in fact a very common view.
  • vasilipupkin 11y ago
    The focus on raising taxes is misguided in the following way: we should first figure out which policies are good how much they would cost and then find the cheapest way to raise the money with the least number of distortions and disincentives - not start by raising taxes by arbitrary amounts
  • kamaal 11y ago
    >>What we want Who is we? >>policies that do not make it so absurdly easy for those who already have access to capital to continue to accumulate wealth and influence at an exponential rate This will happen no matter what policy you implement very simply because if you want a society based on freedom and merit there are various motivations for people to do or not do things, like: choosing careers paths, making decisions to save and invest, how much time they spend on improving personal skills, how hard and how many hours some one is willing to work to achieve what they want etc. Based on what your value system and what you want in your life, with all the priorities there will always be some one who is frugal, hard working, is making sound financial decisions, working on personal skills and doing all that who will grow exponentially in comparison to others. >>while those who are not born under such fortunate circumstances live with an ever-increasing disadvantage. Here is a hint, unless you are born in war torn Syria or are trapped in some African civil war or born with disease you are already in a 'fortunate circumstance'. You may not realize, which is a very different problem altogether. Either there systems like social security designed to handle the exceptions. >>Of course this is inevitable to some degree due to the nature of compound interest. A tip, compound interests doesn't work just with money. It works with skills, knowledge, productivity, experience. You literally have to enforce laziness as a law if you want to stop this.
• evgen 11y ago
  Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. Because the state is neither corrupt nor incompetent; this is the big fear of the cyber-selfish libertarians you will find on HN. Tell you what, why don't you start your rant with a list of these rich politicians who will grow even richer. Just a single name please. No, this is not how communism starts. If you knew anything about the history of your own country (doesn't even matter which country this is) this would be readily apparent. Rich people becoming even richer and using the aparatus of the state to enshrine the power of their family or tribe is usually the outcome of a coup or war. Communism usually starts with a lot of rich people who did not make the last flight out having a short lean against a dusty wall somewhere after their family has spent several generations giving everyone in the country a reason to want to see their spleen paraded around the capital on a stick.
  • Jdam 11y ago
    > Because the state is neither corrupt nor _incompetent_ This needs to be proven. Oh wait, it is proven like every day. Just open a random newspaper on a random date. /european
    • vezzy-fnord 11y ago
      How someone can make such an unbelievably moronic and utopian statement is beyond my comprehension. A shame so few have yet to internalize the lessons of Buchanan and Tullock, though to presuppose the existence of a perfect government, I'm afraid is much more desperate than that.
  • apsec112 11y ago
    "Tell you what, why don't you start your rant" Please don't make personal attacks on Hacker News.
  • throwaway_51661 11y ago
    > Tell you what, why don't you start your rant with a list of these rich politicians who will grow even richer. Just a single name please. Hillary Clinton. https://www.rt.com/usa/327689-clinton-conflicts-state-department-us/ https://www.rt.com/usa/327689-clinton-conflicts-state-depart... And BTW grandparent is 100% correct. This is EXACTLY how communism starts. First they come for the people who are rich and successful ... Throwaway account because it could hurt my career to declare my political views on a public forum in the US if I'm not a liberal.
• angularly 11y ago
  I agree, thinking the politicians can handle anything is naive. Politicians seldom make the situation better, mostly they make it worse while enriching themselves. Socialism don't work in the Nordic countries either. In Denmark where I am from we were in the top 5 richest countries only 60 years ago, before we introduced the Welfare State. Back then we actually had lower taxes than in the US. Since then we have been sliding fast down that list, so we are today around 20th place. We now have an absurd situation where a small minority of ~33% in the private sector has to pay for ~66% of people on welfare or working in the public sector. And we are past the point of no return, we can not make any reforms to cut the public sector or welfare, because the majority is obviously against. A high earner often pays 80% counting both taxes and levies/duties. It has killed almost all initiative in Denmark. People prefer time off instead of working extra hours, we are one of the countries with the lowest amount of entrepreneurs percent wise, like in France young people and entrepreneurs are fleeing the country in hordes. I myself moved to Switzerland to start my startup.
  • douche 11y ago
    60 years ago, Denmark was one of the few industrialized countries other than the United States which was not extremely devastated and still in the rebuilding process after WW2...
  • dikdik 11y ago
    We're on a website called "Hacker News." We have the ability to make innumerable improvements to the way governments work. There is no reason to pick 1, 2, or 3. We can have anything in between. We can make something new, we can figure shit out. Not that it'll be easy, but we can...and we should. All I'm reading in this thread is:" ______ system of government isn't perfect, so our only option is to keep doing what we have been doing even though we know it sucks."
  • wstrange 11y ago
    Interesting that the OECD ranks Denmark quite well: http://www.oecdbetterlifeindex.org/countries/denmark/ http://www.oecdbetterlifeindex.org/countries/denmark/ But they specifically call out inequality as an issue: "..there is a considerable gap between the richest and poorest – the top 20% of the population earn close to four times as much as the bottom 20%"
• Eeko 11y ago
  What happened in the Nordics is that for the most part of the 1900's, there was a shared border with a huge imperialist and expansionist superpower, trying to convince the world that their economic and social models were superior. It often did it with some very dirty and violent tricks and supported its sympathizers around the world. Especially in neighboring countries. In order to keep the people from revolting and gaining permanent global competitive advantage by murdering the factory owners, lenders and their families and stealing their property disregarding any repayment plans - the moderate socialists (who saw that the socialist system would be built organically without violence) and the right wing owner & trader classes made an alliance to fringe the hard-core communists. Bargains were made and benefits established as all parties knew that every satisfied social democrat was much better than a soviet-devout communist. In Finland, there was a very bloody civil war right in the beginning of independence (where the communists lost), two big gunfights in the WW2 and decades of soviet pressure to turn communist. The social programs and safety nets were established to ensure the survival of capitalism and private property. The problem being solved with reducing economic inequality was not "poverty" like PG claims, but threat of violent revolutions by people who felt unfairness. The Soviet Union is gone now and thus the left wing these days has much less bargaining power. These are interesting times.
• krisdol 11y ago
  I also come from a previously communist country and I disagree. The world isn't so black and white. Progressive taxation is not equivalent to a centrally planned economic system. I've had state owned utilities and privately owned utilities, and I absolutely prefer the one that is subsidized by taxes and answers to voters. There's a huge difference between that and having state-chosen academia in Moscow decide how much electricity our city requires. Taxes on wealth and propert subsidize that. I don't care how much money someone makes off a search engine company, but taxation should incentivize affordable housing and discourage the creation of wealthier landlords. Rent is not valuable entrepreneurship. Controlling the township's electric or water company is not valuable entrepreneurship. At least the state answers to the citizens it services, and has less of an incentive to be driven by profit. Let's have higher taxes in order to create a social safety net and pool of opportunity for the rest of the people.
  • bobby_9x 11y ago
    The US already has the one of the highest corporate tax rate in the world and the wealthy pay the majority of taxes. There is no inequality here. We shouldn't de-incentivize prosperity. We need to create more tax payers, not less (or the whole system will collapse). Larger safety-nets will not create this incentive. If it did, we would see many more startup and technology companies in nordic countries. Instead, we see companies neutered by the intense regulations and taxes. Ikea, the biggest company in Sweden,is a non-profit in another country. Why is this? Actually succeeding with a startup in those countries is nearly impossible. Starting a company is pretty much the only real way to truly become rich (if you are poor) and you will be systematically removing this power. There is a good radiolab episode of exactly this in Peru. Education is the key to a citizen with advantages with money. With freely available education, for instance, you can pay leas in taxes. The problem is that most people would rather not sacrifice fun times now for a good life later. With freedom comes also comes the freedom to make poor life choices, and a certain percentage of people will alwayw make poor choices. I'm not even saying there should be no safety net, just that there needs to be a careful balance.
    • hfourm 11y ago
• js8 11y ago
  > Coming from a former communist country, I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. Coming from a former communist country, I can explain why. Because the alternative, capitalistic "free market" where companies eventually end up as oligopolies, is actually worse and gives you less control over the resources involved. For example, botched privatization of water utilities here in Czech Republic hiked prices up 100x. Yes, real democracy is quite a weak control, but at least it's some means of control. You don't get the same level of control over private corporation as you get as a citizen over public utility. And there are many examples of government run enterprises that prove this point, in Nordic countries and in Switzerland. So state is something I can at least marginally influence by voting or by being involved in local politics (I have for example information laws that give me some insight about what's going on); and yeah, to me, giving state less control over resources by minimizing it is a losing proposition. If I could vote about the companies, then perhaps we could talk (but then they would be more like customer cooperatives than private companies). Of course, you probably think competition is the solution, and I don't buy that. First, it doesn't exist in many places (as you're probably painfully aware), and I believe it actually tends to not exist. But the biggest point against the competition solution in my mind is that it's very "low information density" solution. People cannot come and to try to fix things (unless they make their own company, which is unrealistic to expect); they can only signal unhappiness by leaving. It promotes irresponsibility and fatalism. I think it's a kludge, frankly, compared to a possible system where you could really control citizen-owned companies via voting.
• yxhuvud 11y ago
  > * They are highly educated. Huh? You are mistaking cause and effect here. People are highly educated because the state pays for our education and give and lend enough money to handle living expenses while we study.
• sytelus 11y ago
  No, increased government income is not required to decrease inequality. We just need basic fairness in US. Here are the policies I would suggest: - Capital gains should be taxes at least at same rate as income generated by labor. - Remove incentives from economically unproductive investments such as real estate. For example, discourage home ownership unless its primary residence. - Limit political contributions from super rich. - Discourage high return investment vehicles that typically manipulate markets to achieve their goals by reducing risks through government safety nets. - Limit what can be charged by insurance providers for a given quality of service. Health insurance oligarchy and their political influence is core barrier in enabling healthcare for all. - Limit what can be charged by educational institute to students. More financial aids is not the solution, its the problem. The goal of the governments isn't ensuring wealth equality, but ensuring level playing field. If that is ensured then, IMO, wealth inequality will naturally be limited. Government must ensure equal access to two core areas which is health and education. It must make tax system fair and avoid scenario where secretory pays higher tax rate than their super rich bosses. It needs to prevent inflation of limited resources such as real estate by strongly discouraging economically unproductive investments.
  • meric 11y ago
    To encourage the pursuit of financial independence from government at a reasonable retirement age: - Progressive tax on consumption. No tax on labor. - Zero capital gains if total assets is below $2M. To discourage foreign home ownership: - An non-primary residence or foreign investment in real estate can only be leasehold, maximum 25 years. At the end of which the control of property reverts back to the original owner and/or their beneficiaries. To minimise effect of money on elected representatives that can't be removed mid-term: - All bills voted by the public. Every citizen can elect a proxy for their votes. There are representatives, but the term of a representative is continuous rather than discrete 4 year terms, and anyone can be one. To ensure affordable health care: - Set up a government monopoly on purchasing pharmaceutical supplies, along with price ceilings for every type of drug that must not be breached to be eligible for purchase by government. Citizens may purchase drugs that are not on the list of drugs the government say they will purchase, but it must be imported from abroad. The primary goal of government is always be security from other governments, so that it's citizens can live without subjugation. All other concerns should be secondary. Health and education is useless if next month the country will be invaded and its citizens exploited economically. All other concerns are secondary goals.
• dools 11y ago
  The people don't give any money to the government. The government doesn't need their money, it creates money when it spends. The more government spends, the greater the capacity of the private sector to save (so long as the government doesn't spend beyond the productive capacity of society to create excess inflation or compete with the private sector for resources which would stifle innovation).
• pandaman 11y ago
  I have two theories: 1. Similarly to bourgeois in the Russian Empire they believe they can aim the redistributing horde at their enemies while remaining safe themselves. 2. Note how it's always the income inequality and never wealth? If everybody's income had been the same then wealth had much more value. E.g. if everybody's income had been limited to $100k pa then somebody with just $10M in cash would had more money (and hence influence) than anybody who stated at 0 could possibly make in their lifetime and such a wealth would have never been surpassed. If you are seeking rent from your wealth then limiting everybody's income is a pretty good strategy usually expressed as "fuck you, got mine".
  • js8 11y ago
    I think you're very wrong in your reasoning, on both counts. > they believe they can aim the redistributing horde at their enemies I can understand why you say that, and it may be hard to understand, but actually, most people on the left don't really have "enemies". They want equality, not to conquer someone rich. > Note how it's always the income inequality and never wealth? First, wealth inequality is almost always discussed too (Piketty, if you want a trite example) and is often mentioned as being worse. But in any case, I think the focus on income is given by the fact that societies try hard to avoid ex post facto laws. So we say, OK, what you got now is fine but the rules are going to change from now on. That's why you focus on future change (income) rather than existing assets (wealth).
    • pandaman 11y ago
      >I can understand why you say that, and it may be hard to understand, but actually, most people on the left don't really have "enemies". They want equality, not to conquer someone rich. Same as Russian bourgeois, who did not have personal vendetta against the "rich" (who had been the major capitalists and/or royal dynasty) they just thought it's unfair and those should not have as much wealth and influence. Is not it the sentiment of today's left against bankers/wall street/Koch brothers? As for your theory why wealth is not targeted - so? Okay you do that for reasons you described, yet the effect is the same, is not it? I am pretty sure the 99% of the left do not care about this effect since they are not wealthy enough but it does not make it to disappear. The 1% who cares is, by definition, wealthy enough to instigate such a movement.
• sangnoir 11y ago
  > Their society is homogenous Honest question (not directed specifically to you sradu): I've seen this statement pop up now and again, and every time I've seen it, it is referring to Nordic countries. I am beginning to suspect that it's a dog-whistle: am I wrong? What exactly is being referred to as 'homogenous' and why is it an advantage? What disadvantages are presented by heterogeneity of other countries?
• EliRivers 11y ago
  I don't understand why smart, capable people want to give away their money to a corrupt, incompetent state to manage it for them. It's because I believe that there are many things that make my life better that I simply could not provide from my own resources but, when my contribution is pooled with everyone else's, become viable and make my life significantly better. Off the top of my head, the transport system, the judicial system and attendant sub-systems, the healthcare system, research investment. Environmental management. Regulation in food production. I'm sure I could come up with many more. If you didn't understand this, then I'm shocked at your ignorance. If you did understand this, then why did you ask? Are you taking some kind of ridiculous, hyperbolic extremist view that nobody is advocating, in order to create the illusion of being a child arguing in a playground?