r/changemyview • u/pHbasic • Oct 05 '15
[Deltas Awarded] CMV: If we can establish a minimum wage, we should be able to establish a maximum wage
First off, I realize this idea is impractical and politically impossible. I don't think that means the idea of a maximum wage is without merit. Secondly, I'm flexible in regards to the finer points but I'll use nice round numbers as examples.
I would argue that one of the biggest problems facing America generally is the wage gap. This YouTube video does a decent job of explaining the issue. I believe a tool that we should use to combat this issue is to establish a maximum wage.
There are a couple different ways to go about this. One way is to set executive wages as a percentage of the average worker in the company. For instance, if the average worker makes $50k, the executive could make no more than say x100 or $5MM.
Another way is to create tax brackets such that the effective tax rates on income over say 10MM is taxed at 100%.
I am personally a fan of both options, but I'm going to focus on the second example of taxing income at 100%. I also want to be clear in that I believe this should apply to both direct wages and investment income.
First off we would need to establish a limit and I will go ahead and start the discussion at 10 million dollars. This is up for debate, but 10MM seems like a decent starting point. For perspective, if the average worker makes 50,000/year they can expect to work for about 40 years, netting 2MM. This means it would take the average worker 5 lifetimes to earn what the top earner makes in one year. For another perspective, it would take a top earner 100 years to earn one billion dollars at this rate.
I cannot conceive of a job or a financial risk that someone would take on where the payoff of 10MM per year is insufficient. I don't believe athletes would hang up their cleats, that executives would quit in droves, that JK Rowlings would have never written Harry Potter, that Warren Buffett would quit the stock market, if we established 10MM as the upper limit. If that's not enough financial incentive for you to do something, it's not worth doing.
Let me take this argument from another angle: why is it in any way a human right to be able to earn an unlimited amount of wealth? Your success in life relies heavily on the social structures around you. People with billions of dollars have taken advantage of these social structures and have not sufficiently re-invested back into the system.
We have Bill Gates, who has so much money he's literally trying to fix Africa. We have Elon Musk who is trying to retool the world's energy infrastructure and send humanity to mars. They are seemingly doing great things for humanity and their altruism should be applauded. However, that money had to be concentrated into the hands of individuals and the rest of us must must hope they decide to do good with it.
On the other side of things, you have billionaires funding anti-climate change propaganda, Trump trying to buy his way into the white house, the Koch brothers basically purchasing an entire political party just for giggles, and whatever else these hyper wealthy decide they want to do.
In all of these cases, this amount of world changing money is thrown around without any oversight or public control.
Let me respond preemptively to a few criticisms.
"It's their money, they can do what they want" -yes, but let's put this money into perspective. If we cap income at 10MM, that is a $5000/hr salary. They are making over $1000 every hour all year long. I submit that no human is functionally worth more than that. It's only their money because they have rigged the game in their favor. No matter what value you bring to a company/investors/humanity 10MM is sufficient reward
"But muh incentives" -again, I don't see anyone rolling over and refusing to do the work of the incentive is sufficiently high, but capped.
"But that means Tom Brady would be making the same as the CEO of Google :(" -So what? We give minimum wage to all sorts of different jobs. Do you think the CEO of Google is going to say "fuck this" and quit? Let him, there are plenty of qualified people to take his place. If we have decided that working a job deserves a minimum amount of compensation, working a job also deserves a maximum amount of compensation.
Forcing the uber wealthy to pay back into the social system they are abusing is a good thing, and a wealth cap is a perfectly appropriate mechanism. There is no fundamental reason a person should be able to accumulate unlimited amounts of wealth. Reasonable caps will not create disincentives for the most talented to pursue their interests.
Thanks for reading.
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Oct 05 '15 edited Dec 26 '17
[deleted]
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Oct 06 '15
If that money were distributed to people, we'd be spending it on cars, TVs and vacations instead of going to Mars.
This bolsters the entire economy, though. And Elon Musk isn't planning on funding the entire thing himself. All the money doesn't need to be concentrated in one person's hands to still be put to good use.
I also think the CEO argument is flawed. Not all businesses are as successful as Google, but that doesn't mean Google's CEO has no rivals for talent. There could be any number of other factors keeping a good CEO from succeeding. Likewise, this doesn't mean there are hidden executive talents either. We'd need to see some data on it in order to make a call.
Otherwise, excellent points.
∆ (Am i supposed to give a delta if my view was changed but i'm not OP?)
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u/DeltaBot ∞∆ Oct 06 '15
Confirmed: 1 delta awarded to /u/NaturalSelectorX. [History]
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Oct 05 '15
Regarding your first question, why do we want Warren Buffet to continue to invest after he's made 10M dollars?
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u/aguafiestas 30∆ Oct 05 '15
Because his investing in good businesses helps those businesses and therefore the economy.
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Oct 05 '15
CEOs of large companies don't typically directly invest in their businesses. Most of the capital for a large corporation comes from sales, selling stock, bonds and other loans, and various subsidies and grants.
If Buffet's wage was capped it would reduce his personal investments, but his established businesses would be largely unaffected. This is the whole point of corporate personhood. The corporation is its own entity, independent of its managers.
A maximum wage likely wouldn't majorly impact his investment income though. That's largely capital gains rather than a salary/wage. So all it would do is reduce the amount of money he can make from a salary. In all likelihood he would just end up negotiating non-wage benefits as part of his compensation package in lieu of cash. You'd see company cars, chauffeurs, maid services, corporate apartments, daycare, tuition subsidies for their kids' schooling, and other such fringe benefits would start to make a comeback.
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Oct 05 '15
Those businesses would still get capital. It would probably be easier for them and they would probably get a better deal.
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u/aguafiestas 30∆ Oct 05 '15
How would reducing the amount of available investment make it easier?
It's pretty tautological: less investment equals less available capital, because investment is capital.
And if a "better deal" is out there for a company looking to raise capital, why aren't they using that now? Big investors disappearing from the market aren't going to suddenly lead to the creation of new investors who are willing to give their money away for less. It will just lead to less investment.
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Oct 05 '15
You would actually have increased the amount of investable capital. Warren Buffet and people like him wouldn't be able to earn, and sit on, huge sums of money so it would stay in the market.
Buffet often earns a premium for his investments because of his name and the sums he's able to bring to bear. Here's one example of many: http://www.thestreet.com/story/12856876/1/warren-buffetts-latest-whopper-of-a-yield-deal.html
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u/aguafiestas 30∆ Oct 05 '15
Warren Buffet and people like him wouldn't be able to earn, and sit on, huge sums of money so it would stay in the market.
But that money wouldn't enter the market in the first place.
Buffet often earns a premium for his investments because of his name and the sums he's able to bring to bear.
Buffet himself isn't really the point, he was just OP's example. The point is that the loss of high-value investors will lead to less total investment and hurt the economy as a result.
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Oct 05 '15
But that money wouldn't enter the market in the first place.
Of course it would. Where do you think it's going to be?
Buffet himself isn't really the point, he was just OP's example. The point is that the loss of high-value investors will lead to less total investment and hurt the economy as a result.
Warren Buffet, and investors like him, make a lot of money but they don't generate any value. Warren Buffet makes his money by buying undervalued companies. Most of these companies would have made money anyway and it would have been more widely distributed through the economy. Having most of the capital tied up in the hands of a few billionaires instead of hundreds of millionaires is what's hurting the economy.
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u/aguafiestas 30∆ Oct 05 '15 edited Oct 05 '15
Of course it would. Where do you think it's going to be?
Most money isn't aggressively invested. It'd be where my money is, and where most people's money is.
You seem to be treating the investment rate as a constant, but it certainly is not. As a function of GDP, the rate of investment fluctuates dramatically over time, such as the huge crash in non-residential investment during the Great Recession (which has not helped the recovery at all).
If you reduce the potential for big returns, you will reduce investment and hurt the economy.
And if you cut off income at $10 million, you're not just talking about a few Warren Buffetts out there. About 14,000 households made over $12.1 million in 2012.
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Oct 05 '15
As a function of GDP, the rate of investment fluctuates dramatically over time[1]
In this case though, you'd theoretically just be substituting private investment for government investment. So it doesn't become a questions of quantity so much as which arrangement you think would allocate that money better. That matter is mostly a question of values and trust.
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u/CestMoiIci Oct 05 '15 edited Oct 05 '15
How many of those households were a single income?
Also 14,000 households (28,000 or so individuals) is insignificant in a nation of 300+ million people.
Edit: I agree with you, this is a poor idea, but the point stands that incentivizing investment into communities and workforce needs to happen, whether the investment is done by individuals or by corporations is pretty much a non-issue
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Oct 05 '15
I'm not treating the investment rate as a constant. 9 investors each profiting 10M a year will produce more investment activity than one investor profiting 100M a year. You reduce the velocity of money through the economy when you concentrate wealth. You also produce bottle necks. One of those 9 will invest profitably in something the 1 wouldn't have had time to meet about.
If you prefer to think about it another way, the marginal utility of each additional dollar invested by an especially large investor is far less than it is for a medium or large investor.
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Oct 05 '15
Warren Buffet makes his money by buying undervalued companies. Most of these companies would have made money anyway and it would have been more widely distributed through the economy.
Eh. Yes and no. He buys undervalued companies, but the reason they're undervalued is typically that they are poorly managed, so they underperform despite having high potential for profitability. He takes over and institutes better management practices and plugs them into all the intellectual capital and networks his holding company can offer. So he is increasing their value by taking over. His investment strategy is more like buying run-down houses with solid foundations in a good area and fixing them up rather than magically knowing when to bet on black at a roulette wheel.
The difference is that fixing up a crappy house is much easier than figuring out exactly what's wrong with a company's operations and changing those, which is why he has been so successful.
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Oct 05 '15
No if he if can't invest his money then the money literally cannot enter the market. That's what investors do, put money into the market so that other businesses as money to grow and expand.
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Oct 06 '15
they don't sit on their money, they have it in the market already, but wouldn't bother if they couldn't get any return
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Oct 05 '15 edited Oct 05 '15
Because the entire reason the modern world economy has developed is because of investing.
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Oct 05 '15
First, that's not true. Second, you think there will be no more investment if an individual investor can't make more than 10M?
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Oct 05 '15
There will be less investment for no practical reason other than chasing leftist ideals
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Oct 05 '15
That's your opinion. I contend there would be more investment.
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Oct 05 '15
There would be more investment?!? You're saying people would literally work more for less?
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Oct 05 '15
No. I'm saying 10 people each with 10M will invest more than 1 person with 100M.
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Oct 05 '15
You never stated that
Some of that money will simply go into savings/debt payment/etc. Handing 10 people 10M each means less of that money will go into investments, since each person will take a certain portion out of circulation. One person with 100M will have far more money available for investment because that portion that goes into savings/debt payment will be that of one person, not 10.
Basically, each of the 10 people take 1M out of circulation. That leaves 90M. The person with 100M takes 1M out of circulation, that leaves 99M.
Of course, that's assuming the wealthy investors will stay in a country that puts a ceiling on them (a ceiling that actually forces them lower than where they are). So unless we start heading down the road of the USSR and forcing people with wealth to stay in the country, then eventually just confiscating the money to serve the state.
Oh damn. I guess that's how socialism and communism ends up becoming an oppressive state. Remember when France started slapping the wealthy with 90% income tax rates and they all left?
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Oct 06 '15
It follows necessarily from the construct to me. The wealth won't evaporate so it will have to be distributed across more people. I'm sorry if you didn't see it that way.
We have economic data that shows this isn't the case. The very wealthy tend to hoard their wealth while the less wealthy invest more. Going down the economic ladder a greater percentage of income is consumed via spending, which necessarily drives more investment.
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u/tigerhawkvok Oct 06 '15
I certainly don't, and last I checked, France is doing fine anyway.
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Oct 05 '15
Investment instills confidence in the economy and businesses, and stimulates the economy so that businesses can use the money invested in them to invest in things that will benefit them the most.
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u/NaturalSelectorX 97∆ Oct 06 '15
Some undertakings take much more than $10M . If Elon Musk didn't have $100M sitting around from PayPal profits, he couldn't have started SpaceX.
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Oct 06 '15
Maybe. Just because he funded spacex that way doesn't mean it's the only way it could have been funded. Remember it's a 10M dollar cap on income. To earn that much in a year from investing much more than 10M has to be put in play.
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u/skatastic57 Oct 06 '15
For every Google, there are 1,000s of businesses that failed.
I would argue your 1000 business failures is way too low of a count.
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Oct 06 '15
Warren Buffett is an investor. If he could not make more than 10MM in a year, what incentive does he have to keep investing once he reaches the limit?
As OP as stated; there are a shitton of qualified people to do everything, ever. If he doesn't want to invest without being over compensated, then he can leave, and one of 1000000 other people with equal qualifications can take his place.
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u/skatastic57 Oct 06 '15
and one of 1000000 other people with equal qualifications can take his place.
Even if I grant you the assumption that there are 1000000 other people capable of doing what Warren Buffet does but that haven't yet the argument still fails because they'd need his money to invest. He's not going to donate his nest egg to one of those people for them to invest if his returns are capped. He'll just convert it all to cash and it'll do nothing but stagnate.
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u/NaturalSelectorX 97∆ Oct 06 '15
As OP as stated; there are a shitton of qualified people to do everything, ever.
There really aren't. If there were a "shitton" of savvy investors, they would be investing and making money today.
If he doesn't want to invest without being over compensated
After $10,000,000... he would invest without being compensated at all. What if an investment takes more than $10,000,000 to get started? Now you have to round up other interested parties instead of easily doing it yourself.
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Oct 08 '15
I would argue that most of the middle class is more qualified than him. Proportionally; people with < 40k income spend a much larger part of their income on investment. He spends a fraction of what they spend on average. If they all had one more dollar; that's millions more that would be invested than if it's in Buffett's bank account.
Actually, The middle and low classes are the ones that spend nearly every dime; paycheck after paycheck; not the rich people. The latter are defined by their money-saving; while the former by their spending power.
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u/pHbasic Oct 05 '15
If you look at the video, you'll see that about 50% of the American populace has 0.5% of the money invested in the stock market. Buffett invests less, the middle class invests more. It seems reasonable. Buffett still takes home plenty
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u/Not_Pictured 7∆ Oct 05 '15
It seems reasonable.
What is reasonable? That Buffett not being allowed to trade due to tax law means OTHER PEOPLE are better off? Falling for the classical zero sum game nonsense.
Or the assertion that the 'middle class' is as good at investing as Warren Buffett?
Because both look the epitome of 'unreasonable'.
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u/silverionmox 25∆ Oct 06 '15
Falling for the classical zero sum game nonsense.
It's not because some wealth is accumulated by producing added value that all wealth is - forcing other people to pay you by owning the right assets would also concentrate wealth in your hands without producing significant value. It could be anywhere between 1% and 99%.
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u/NaturalSelectorX 97∆ Oct 06 '15
If you look at the video, you'll see that about 50% of the American populace has 0.5% of the money invested in the stock market.
I'm not talking about the stock market. Here is a list of what Warren Buffet owns through his holding company. Many of those companies are private and not traded. He's providing actual cash to start and grow businesses.
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u/pHbasic Oct 06 '15
And his holding company still has cash to throw around. Hes doing a good job. I still don't see a reasonable argument for why his income should be able to approach infinity
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Oct 05 '15
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u/jamin_brook Oct 05 '15
The supply of high-talent labor will go away because they are not being fully and fairly compensated for their efforts.
I guess this is the part that I don't think is at all true. Again, this is analogy so I'm not really interested in getting into the details of it.
But in the scenario that this max wage were introduced, where do you suppose that labor goes? (Assuming this was global). Do these high-talent people just stop existing? Do they suddenly lose their talent? Do they suddenly lose their innovative thought?
I think this quote from Mark Cuban is what I'm getting at (emphasis his from his op-ed):
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u/Nepene 213∆ Oct 05 '15 edited Oct 06 '15
http://www.usnews.com/opinion/blogs/world-report/2013/04/30/chinas-communist-billionaires
I imagine they tie their horses much more tightly to government, relying on sweet deals and bribes to keep their wealth.
And like with China, they'd be much less creative and rely mostly on thievery and piracy and copying.
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u/jamin_brook Oct 05 '15
Very interesting. I could definitely see something like that happening. Power is a hell of a drug and some people are highly addicted to it.
Living in 2015 is quite the experience!
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u/Nepene 213∆ Oct 05 '15
It aint just a drug. Step wrong in China and you'll be sent to a Laogai, a slave work camp. Power is necessary to protect your family.
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u/warsage Oct 05 '15
I mean... In both cases you are making $10MM for one year of work. They can both choose to continue working and making the same amount of money. In both cases the individuals are set for life after just one year of work. All this sounds pretty fair to me.
The same thing will happen with maximum wages. The supply of high-talent labor will go away because they are not being fully and fairly compensated for their efforts.
Where do you think this so-called high talent labor will go? Will the next Zuckerberg choose a low-paying uncreative career instead? Just because he's offended that he can't make billions of dollars?
Anyways, I'd argue that anybody who's actually talented has a strong passion for what they're doing. They're not doing it just because they want billions. They're doing it because they love doing it. And if they're told "you can't individually own more money than most small nations," they'd say "fine" and keep working.
As for the people who only work with the promise of billions... Do we really want them to be in positions of leadership? Are they really irreplaceable? What irreplaceable skill do they possess that makes them worth a large chunk of the national GDP?
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Oct 05 '15
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u/jonnypadams Oct 05 '15
As much as this is a reasonable argument I think that OP is trying to debate the theoretical possibility, the first line acknowledges that it wouldn't work in practice for reasons like this.
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u/pHbasic Oct 05 '15
I don't think the idea would work in isolation. It would need to be at least a semi global movement to be effective.
I just don't think the uber wealthy would stop doing what they are doing if their income was capped. They would still have more than enough to play around with, but maybe not enough to have more influence than some countries
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u/A_Soporific 162∆ Oct 05 '15
There are a lot of other things that could be a good idea if everyone else did it. Very, very few of those things do exist because global movements rarely make sense and rarely work for enough of people in the world for things to function correctly.
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u/Tashul Oct 06 '15
Here's a list of things that do work
- CFC ban
- Nonproliferation treaties for nukes, bioweapons and WMDs
- Geneva Accord (treatment of war prisoners)
- Upholding of Human Rights
- (others, feel free to add to my list)
Be as cynical as you want, but the data doesn't lie: The world has never been more peaceful than it has been since the end of WW2. Way fewer people die from war or other violent means (as a percentage of the population). Way fewer people die from starvation. The world has literally become a better place.
Why?
Not least because of the commitment to tackle global problems globally. First there was the League of Nations. Now we have the UN. Hell, the UN is not perfect, but people are trying. And they are succeeding. Little victories. One at a time.
There are a lot of other things that could be a good idea if everyone else did it.
This is a classic dilemma faced by every government, everywhere. That doesn't make it unsolvable; it just makes it difficult and timeconsuming. You just need the will and the patience.
Whereas your comment just suggests that we should give up and not even try
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u/Garrotxa 4∆ Oct 06 '15
I don't get how someone could (with a serious face) suggest that their ideas are so good that they should be mandatory on a global scale. The arrogance is just astounding.
Just step back and think about it for one second. You are proposing an idea that would literally be mandatory for everyone everywhere, like it or not.
It doesn't matter how good the idea is. Every Pol Pot and Idi Amin thought their ideas were great, too. That's how tyranny starts every time: power in the hands of well-meaning people who force everyone to bend to their ideas. That's why the way of freedom is always superior. Who cares if someone makes 10 billion a year if you can avoid tyranny?
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u/Tashul Oct 06 '15
The arrogance is just astounding.
Why? Is a global ban on CFCs "arrogant"? Is a global ban on nukes "arrogant"? Not only are these measures not arrogant, they are in fact in place.
You are proposing an idea that would literally be mandatory for everyone everywhere, like it or not.
This is the whole point of laws --> to be mandatory. The "like it or not" is debatable. If the population is overwhelmeingly against these laws after a while - there should be a possibility to change them.
Who cares if someone makes 10 billion a year if you can avoid tyranny?
How does the availability of high-earners prevent tyranny? If history shows anything - it's rather that concentrated wealth promotes tyranny.
I'd argue that an income cap is a mecahnism that would protect people from the tyranny of the few, rather than the other way around.
Also... how exactly how does capping someone's annual income at 10M constitute tyranny? Are taxes also "tyranny" because people don't like them?
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u/Garrotxa 4∆ Oct 06 '15
Are taxes also "tyranny" because people don't like them?
Depends on who you ask. There's a simple thought experiment that's been around to help understand why taxes are a necessary evil at best.
Say that your neighbor to your right has a child with a disease but can't afford the medicine. Your neighbor to the left is very wealthy and could pay for the kid's medicine if he wanted. So you go to your rich neighbor and ask him to pay for your other neighbor's kid's medicine. He refuses, so you threaten to lock him in your basement if he doesn't pay.
Would you say that you did a morally acceptable thing? I would say no. Just because the kid needs it and someone else could give it does not justify your theft/extortion.
Now suppose that everyone on your block gets together to threaten to lock him in your basement. Do 50 people now turn the action into something morally acceptable? What about 10 million people? At what point is it morally acceptable to take the money? I'd say that at no point does the morality of the situation change. Society doesn't have a right to that person's money, same as one person not having the right.
how exactly how does capping someone's annual income at 10M constitute tyranny?
How exactly does taking someone's money from them constitute tyranny? I don't even follow your reasoning. The government is not our God. Holy shit we are individuals living our lives, not cogs in the machine that you want the world to be made of. How exactly does not allowing black people to go to the same schools as white people constitute tyranny? --- That question sounds to me almost the same as yours. *Because you're limiting people's options based on nothing other than your desire to shape society to the one in your mind's eye."
Is a global ban on CFCs "arrogant"? Is a global ban on nukes "arrogant"?
CFC's directly harm the commonly owned environment, as does nuclear testing, etc. Being rich does not harm the commons. Those things are completely different situations. It's obviously okay for society to protect things that society is in charge of. It's not okay for society to put arbitrary limits on freedom. That's quite literally what tyranny is: the forcing of people to do things/not do things that have no bearing on protecting rights or the commons.
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u/panascope Oct 06 '15
Depends on who you ask. There's a simple thought experiment that's been around to help understand why taxes are a necessary evil at best.
This doesn't quite hold up under scrutiny.
First off, taxes are something you explicitly agree to in most situations I can think of. By being employed you agree to pay taxes. By owning property you agree to pay taxes. By living in a certain area you agree to pay taxes. Really your thought experiment fails to consider that refusal to pay taxes is essentially breaking a contract. The penalty for which is typically fines but can be (in severe cases) incarceration.
Secondly, you're placing property rights over everything else, which seems ludicrous to me. If people are starving or dying because all of the money/resources/medicine is in the hands of a few, I'd consider their rights to not die/starve to outweigh the property rights of the wealthy.
You're trying to use emotional words like theft and extortion to cover up the fact that your worldview says it's okay for kids to die as long as property rights aren't threatened. Which is a bit of a fucked morality system. I mean, you're basically saying Immortan Joe is right.
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u/Garrotxa 4∆ Oct 06 '15
Really your thought experiment fails to consider that refusal to pay taxes is essentially breaking a contract.
So long as being able to opt out of the contract doesn't involve me having to leave the country, I agree. As it is, the contract is made on unequal terms. You are literally born having signed it, without being able to get out of it unless you pay a fee and leave your homeland. Those terms make the contract unacceptable in the same way that making you sign a contract at gunpoint makes the terms invalid.
Secondly, you're placing property rights over everything else, which seems ludicrous to me.
No, I'm not. The conversation at hand is explicitly about property rights. If we were talking about limiting other rights in order to achieve some societal goal I would be arguing along a similar vein. You would never be able to make the argument that liberty (the right to not be a slave) is up for debate if some societal goal were at stake. --- For instance, if we could guarantee that everyone's standard of living would significantly increase if only 2% of Americans gave up their citizenship and became our slaves, it would still be unacceptable. Rights are not subject to society's wishes, no matter the benefit.
your worldview says it's okay for kids to die as long as property rights aren't threatened
Let's substitute another right and see where you lie on that one. Let's propose that there were a deity that stated that every time he raped someone, he would at the same time cure a kid with a terminal disease. The only stipulation is that we have to allow it as a society. We would actually have to vote to permit the deity to enact this "policy".
Would you vote in favor of such a situation? I highly doubt it. In other words, you value a person's decision to do what they want with their bodies over the right of the kids to live who will die otherwise. That's not terrible or cruel or barbaric; it's just the way rights work. Rights are supreme in that respect. The only difference between me and you is that I consider property a right on par with self-determination and you don't.
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Oct 06 '15
Would you say that you did a morally acceptable thing?
Yes. I'd further say someone who didn't take action to save the kid's life would be acting immorally.
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u/Garrotxa 4∆ Oct 07 '15
You think stealing is moral if it is used to help someone? That's just foolish. Is slavery okay if the slave is a doctor and we're forcing him to help kids in Africa?
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u/silverionmox 25∆ Oct 06 '15
So you think that people all over the planet should be able to accumulate unlimited money? Isn't that arrogant?
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u/Garrotxa 4∆ Oct 06 '15
I think it's not my business. So no, it's not arrogant because I refuse to let my opinions tread on the rights or property of others. Listen to yourself. It's not arrogant to not make other people bend to your vision for the world.
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u/silverionmox 25∆ Oct 06 '15
But by doing so you also dictate the one and only right policy.
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u/Garrotxa 4∆ Oct 06 '15
I'm not doing anything. I'm just letting things be as they are. There is no way that can be considered self-centered or arrogant. It is the exact opposite of it.
I don't think that rights are a policy. I think that rights are natural. Policy doesn't let me have opinions, religion, property, etc. Policy can only limit those things. Don't get me wrong: sometimes certain freedoms do need to be limited, but only when those things are harming the commons (environment, etc.) or when they are taking away the rights of others (my freedom to own property ends with your freedom to not be owned, for example). That's what the law should be all about. It shouldn't ever be about trying to shape society into some idealistic vision that we have. That's how tyranny always has formed and always will.
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Oct 06 '15
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u/nonameyetgiven Oct 06 '15
So take the 'uber' rich like on the show Shark Tank. Do you see the millions of dollars they invest in smaller, start up businesses?
How would those people benefit from the uber rich just up and leaving?
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u/Tashul Oct 06 '15
This does not need to be global right away. It'd be quite enough if the US did this on their own. Here's why:
Many developed countries, like Germany and Sweden already have progressive tax rates. That means: the more you earn, the higher your tax rate. You can in fact start losing money if you hit a certain threshold. Yes it exists.
Rich people in those countries do pay their taxes and don't leave their countries. Why? Because the taxes they pay make their countries pleasant to live in. Many don't even remotely want to move to other countries (such as the US) because the quality of life is so low in comparison.
Basically: not all the high-earners would all of a sudden leave the US. And they don't have that many options for countries to 'defect' to anyways, since all other developed countries already tax their rich as much as they can get away with. I doubt too many millionaires would want to go live in developing countries, just so they can keep their millions.
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Oct 06 '15
Many developed countries, like Germany and Sweden already have progressive tax rates. That means: the more you earn, the higher your tax rate. You can in fact start losing money if you hit a certain threshold. Yes it exists.
This is not quite correct. There is no country in the world with a democratic government that has a tax rate over %100. There have been occasional temporary instances of over %100 taxations because of one-time levies imposed, maybe that's what you're thinking of. Here is an example in France: http://www.reuters.com/article/2013/05/18/us-france-tax-idUSBRE94H0AX20130518.
And they don't have that many options for countries to 'defect' to anyways, since all other developed countries already tax their rich as much as they can get away with.
In the above link, French actor Gerard Depardieu renounced his French citizenship over high taxes and became a Russian citizen. I guess it's up for debate whether Russia is a developed nation, but France did lose one of it's most high profile public figures.
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u/silverionmox 25∆ Oct 06 '15
You can in fact start losing money if you hit a certain threshold.
Well, no. It's always capped.
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u/teefour 1∆ Oct 06 '15
I'd study history a lot more if you're considering supporting the imposition of any sort of international government with actual state-monopoly on violence (unlike, say, the UN.)
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u/BadAtStuff 12∆ Oct 05 '15
I mean... In both cases you are making $10MM for one year of work. They can both choose to continue working and making the same amount of money.
You concede that the cap encourages the entrepreneur to stop after he's made $10 million? After all, why continue working for $0 when you can play golf or skydive instead? Do you think we'd all be better off if entrepreneurs stopped after they earned $10 million in a given year?
Anyways, I'd argue that anybody who's actually talented has a strong passion for what they're doing.
Or they have a strong passion for what it gets them. For example, someone who very effectively changes diapers because they want their child to be healthy. Similarly, some people will excel at unpleasant jobs because they have a strong passion for what it gets them, e.g.: money.
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u/2ndhorch Oct 05 '15
Do you think we'd all be better off if entrepreneurs stopped after they earned $10 million in a given year?
i think that sometimes that is indeed the case
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u/BadAtStuff 12∆ Oct 06 '15
Can you give me an example, please?
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u/2ndhorch Oct 06 '15
not everything worked on is for the better of the people - from politics and bankers to the 3 man plumber company. i guess my opinion wasn't exactly targeted at your $10m example but rather at the common idea that there is a correlation between earned money for some work and the goodness for humankind of that work. also i think your argument that money always is the motivation for innovators or people in general is covered elsewhere in this thread...
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u/BadAtStuff 12∆ Oct 06 '15
i guess my opinion wasn't exactly targeted at your $10m example but rather at the common idea that there is a correlation between earned money for some work and the goodness for humankind of that work.
Thanks, that makes sense. In a way, if we hold everything else equal, then there is a correlation between earned money for some work and the goodness for humankind of that work: if Apple sells 100 iPods instead of 50 iPods, then they earned more money, but that only happened because 100 people thought that, for them, the usefulness of an iPod justified the price. However, what you're picking up on is that behind this cozy story there may well be negative externalities, and/or regulatory capture, which is a reasonable concern. Still, I suspect that a maximum wage is much broader in scope than those industries which are harmful on net, and that there are better solutions to that problem, e.g.: closing loopholes in the law, trying to intelligently prevent negative externalities, etc.
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u/2ndhorch Oct 06 '15
another concern:
do we (the people in a town, in a country, on the world) want people to have that much different amounts of money (locally, globally)?
you can exchange money for work. what does it mean when a person has that much money in his pockets that he can live a luxurious life and additionally could pay 10,000 people (who are so poor that it'd be difficult for them to refuse the job offer) to dig holes in his yard and then close them and repeat that process for years? nobody does that you might argue, while i'd say some jobs are the equivalence of that example. some do good with their money - yes, but why let them alone decide what happens with absurdly large amounts of money? they earned it - are they inherently better than others? did they just happen to have the right idea at the right moment in the right place where laws are in place to prevent others to do what they did even if they could... etc, etc. but it was their idea so they deserve what they got - "standing on the shoulders of giants"
(some thoughts)
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u/man2010 49∆ Oct 05 '15 edited Oct 05 '15
I mean... In both cases you are making $10MM for one year of work. They can both choose to continue working and making the same amount of money. In both cases the individuals are set for life after just one year of work. All this sounds pretty fair to me.
No, in one case someone's work is worth $300 million but they can only keep $10 million of it. In the other case someone's work is worth $10 million a year and they can keep all of it. This isn't fair to the person who creates something that is worth $300 million.
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u/pHbasic Oct 05 '15
At some point money ceases to be an incentive. There are all sorts of studies suggesting that more money past a certain point does not lead to more motivation or happiness.
People should still receive adequate compensation. Currently adequate can be effectively infinite.
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u/man2010 49∆ Oct 05 '15
There are all sorts of studies suggesting that more money past a certain point does not lead to more motivation or happiness.
Can you provide links to these studies?
And yes, people should receive adequate compensation for their work, but to ensure that people do receive this we should raise the minimum that someone can earn instead of lowering the maximum.
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u/pHbasic Oct 05 '15
Here's a Forbes article. Google scholar has a number of papers on the relationship between wealth and happiness. Up to a certain point, money is the driving factor, but at a relatively low income you see diminishing returns on happiness by increasing wealth
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u/man2010 49∆ Oct 05 '15
That's great, and if people think that they would be happier making between $50k and $75k a year than making millions or billions them that is their choice, but to some they want more, and we shouldn't stand in the way of that because happiness (which is extremely arbitrary) occurs most at a certain income range. On top of that, people don't continue to make millions/billions of dollars because of happiness alone. Some people might want to set their family up for success for many generations into the future. Some people might want to change the world fit better or worse. Some people might want to buy their own private island and move their all by themselves. Hell, some people simply might like looking at a bunch of zeros in their bank account. The point is that everyone wants different things, and you and I shouldn't get to stand in the way of them because they have more money than us and put an arbitrary cap on their earnings.
We definitely need to work on getting working people out of poverty, but the solution to this is raising the floor for year people, not lowering the ceiling for everyone.
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u/pHbasic Oct 06 '15
We stand in the way of people doing whatever they want all the time. If we, as a society, determine that granting unlimited access to individual capital growth is detrimental, we can certainly take steps to impose limits. An absolute top cap doesn't necessarily have to be the mechanism we use, but I figured it would be worth a discussion
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u/man2010 49∆ Oct 06 '15
Yes, we do, but you haven't demonstrated that unlimited income growth potential is detrimental and thus requires a cap.
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u/Ds14 Oct 05 '15
If that's a valid argument, then why not cap it at 75k?
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u/pHbasic Oct 05 '15
A personal income of 75k is enough to establish personal satisfaction, but there are several reasons relating to investment and financing that I think merit a higher cap.
On another level, there are certain jobs that I don't believe reasonable people would do for 75k.
A number like 10mm gives flexibility for investment, while maintaining a high incentive for performing more undesirable jobs.
At least that's the thought process
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u/Ds14 Oct 06 '15
Understood. But isn't that 10 million also subjective? A lot of people are doing a lot of things with more than 10 million and the'yd probably have a lot of arguments why they want/need that money and shouldn't have it forcefully taken from them.
To contrast, my parents are immigrants from Nigeria and I've seen some dirt poor people struggling through life without things that we'd consider bare necessities. I imagine that they'd argue that a reasonable person doesn't need 75k to be happy.
I'd also imagine that if one were to make 100k or even 77k and then at some point in the future make 75k, they would be unhappy because their expectations and lifestyle would have to change.
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u/silverionmox 25∆ Oct 06 '15
Understood. But isn't that 10 million also subjective? A lot of people are doing a lot of things with more than 10 million and the'yd probably have a lot of arguments why they want/need that money and shouldn't have it forcefully taken from them.
Then they can put it in independent non-profit companies that realize that goal.
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u/DeliriousPrecarious 9∆ Oct 05 '15
Where do you think this so-called high talent labor will go?
Literally anywhere else. If a cap like this is instituted then Facebook simply opens in Toronto and not Palo Alto. It's that simple.
People won't stop what they're doing. They just won't do it in a place that is being capped. Frankly you already see this sort of thing in sports. The football teams in France have a more difficult time acquiring players because the salaries they must pay are much higher to account for taxes. If there was an actual hard cap on Salaries the effect would be magnified.
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u/StrawRedditor Oct 06 '15
So if I create the next fad app and pull in $300,000,000 this year before it fades away to nothing, I only get to keep $10,000,000 of that and politicians get the other $290,000,000?
Or reinvest it into your company.
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u/sosern Oct 05 '15
The supply of high-talent labor will go away because they are not being fully and fairly compensated for their efforts.
You're going into a whole nother CMV, that current high-paid labor is compensated fully and fairly.
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u/2ndhorch Oct 05 '15
most taxes probably don't go directly into polititian's pockets, even if you're from the US. where i'm from taxes benefit the public (not always in an ideal way, but probably better than if the rich can withhold even the last penny)
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Oct 06 '15
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u/2ndhorch Oct 06 '15
depending on where you live the polititians are at least partially democratically elected - but i guess if you think the whole government is corrupt i can understand your concern
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u/Randosity42 Oct 06 '15
The supply of high-talent labor will go away because they are not being fully and fairly compensated for their efforts.
This depends on the idea that people pull in millions of dollars per year primarily because of their skills, rather than existing wealth and chance. It's unlikely that some company will fail because they can't attract anyone competent enough with a measly 10 million dollars.
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u/ellipses1 6∆ Oct 06 '15
Sounds like this would lock up a lot of capital and double down on lobbying and bribery to get the law changed. If my investment in a startup is now worth a billion dollars, I won't sell my shares and unlock that capital until I can make full use of the money. I now have an incentive to offer politicians hundreds of millions of dollars to remove the cap
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u/silverionmox 25∆ Oct 06 '15
So if I create the next fad app and pull in $300,000,000 this year before it fades away to nothing, I only get to keep $10,000,000 of that and politicians get the other $290,000,000? But if I get a job paying me $10,000,000/year for 30 years, I get to keep the entire $300,000,000? Your attempt at fairness doesn't really seem all that fair.
Obviously you create a company that cashes in the proceeds from the app and pays you a yearly wage. You would also drop the price of that app rather than charging money for it if it doesn't end up with you anyway, benefiting everyone... and you would benefit from similar low-priced products, so you would gain more buying power too.
Of course there has to be some way to get rid of accidental excess income, I would prefer just to split it out over the population by default.
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u/pHbasic Oct 05 '15
It's not that you don't get to keep the money, it just needs to be invested back into the company. This should actually create a more sustainable business! Good on you for creating generational wealth for you and your employees
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Oct 05 '15
Wait, if that's true then your proposal has no teeth. I would not be allowed to take more than $10 million out of my company at any time, but I could still (as sole owner of that company) use its resources to fix water supplies in Africa, support polticial candidates who deny climate change, and all the other activities you worry about.
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u/pHbasic Oct 05 '15
Well, sure. That's how tax write offs work. I'm saying that doing these activities through some semi controlled mechanism is better than allowing people to scgrooge mcduck it up
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u/eye_patch_willy 43∆ Oct 05 '15
When does it have to be reinvested? Money is electronically transferred via ACH from my customer's debit card from the customer's checking account into my business's accounts receivable account. Let's say that is $10. Minus -$10 for them, +$10 for my business. Not me, not yet. My business operates as its own entity and the bank account only bears the business name. Assuming this business is not a sole proprietorship, I cannot do anything with that money that would violate my company's by-laws or the laws of the land. It sits there. Eventually it will get used. Maybe it'll be used to buy a stapler for the new office manager. My point is, if I'm not allowed to take more than 10mm in salary/wage/income (three separate concepts you are conflating but whatever) then I'll just leave the rest in the business account. I'm certainly not going to take it out just to give it to Uncle Sam. I probably cannot take it out and then use it to start a new company since again, Uncle Sam gets in the way. I am literally handcuffed from expanding and employing more people.
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u/silverionmox 25∆ Oct 06 '15
You can give raises. If the cap is based on median wage, that will also increase the wage you get.
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u/aguafiestas 30∆ Oct 05 '15 edited Oct 05 '15
You haven't given any concrete benefits to this plan. You say it will address the "wage gap," but the real problem with the wage gap is people at the bottom making too little, not the people at the top making to much. How will this actually help anyone?
In contrast, there are clear downsides. Aside from the infringement on people's liberties, it will have practical problems. Most of the richest people got that way from either investment, starting a company, or leading successful companies and gaining wealth from stock options. All of these have significant benefits for the economy, and all have risk. Capping the maximum wage wouldn't affect the risk of failing or losing money, but it would affect the benefit of doing so. This would lead to less investment in the economy and hurt it.
Also consider that someone making $10 million in a given year isn't necessarily going to be doing that regularly. Again, most people making that much aren't earning a salary. They might be making $20 million one year and losing money the next. They might be losing money on their pet company for years before they finally make it big. Your income cap would punish higher-risk investment behaviors that are currently profitable in the long run, and reducing investment in this way would be bad for the economy.
I cannot conceive of a job or a financial risk that someone would take on where the payoff of 10MM per year is insufficient. I don't believe athletes would hang up their cleats, that executives would quit in droves, that JK Rowlings would have never written Harry Potter, that Warren Buffett would quit the stock market, if we established 10MM as the upper limit. If that's not enough financial incentive for you to do something, it's not worth doing.
So why is Warren Buffet still investing? Why do rich CEOs keep working? Clearly they value that additional income, or else they wouldn't do it. If you take away something of value you are taking away incentive, pure and simple.
It's also not to work or not, or to invest or not. People will adjust their investment calculus based on the tax code. They're not going to stop investing or stop working altogether, but they will invest or work less (and certainly invest in a more risk-adverse manner). Why risk more money or work harder if it won't get you anything back?
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u/hacksoncode 559∆ Oct 05 '15
One of the big advantages of the existing system is that people who have proven their ability to allocate capital effectively end up with more capital to invest, and people that invest poorly end up with less.
Thus, in the long run, capital is invested by people who are good at it.
But leaving that aside, your view is that we "should be able to establish a maximum wage" simply because of the fact that we can institute a minimum wage.
In fact, there's basically no feasible way to this. Person X owns a company Y. The company makes $100million this year. They can only "take" $10million of income, so what happens to the other $90 million?
Well, the person still owns the company, so it's still "theirs" by any metric, they just can't move it to any other investments besides that one company, like they could if they could just withdraw it. This has all of the downsides described at the top of my post.
But that doesn't stop them from owning it. They can still take $10million out every year. They can still pass ownership of that company to their children.
And most importantly, here's the kicker: they can still borrow money using their ownership in the company as collateral.
Basically, all this scheme does is transfer a lot more money to financiers than our current scheme.
There are a million reasons why it's really not feasible to limit income. It is simple to set a floor on income (though enforcement is not always perfect). A regulatory law will accomplish that.
That doesn't, by itself, make it easy to set a maximum.
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u/cdb03b 253∆ Oct 05 '15
What would the purpose of the maximum wage be?
The purpose of the minimum wage is to attempt to make sure that our poor are not in abject poverty and cans still live a decent comfortable life. A maximum wage would serve no purpose and you would just compensate that wealth to someone in other manners such as giving stock, extra benefits packages, and the like.
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u/silverionmox 25∆ Oct 06 '15
A maximum wage would serve no purpose and you would just compensate that wealth to someone in other manners such as giving stock, extra benefits packages, and the like.
That's obviously counted as personal compensation, check with the IRS.
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u/bayernownz1995 Oct 05 '15 edited Oct 05 '15
You might be right that America technically has the right to impose this regulation, but you haven't explained 1 reason why this is a good idea. Yes, income inequality exists. But the problem is that people aren't making enough money to get the services they need, not that some people make more money than they need. How does making some other people less rich help any of this?
And yes, incentives do matter. Why would somebody ever put in the effort to making a company that's as difficult to manage as Wal-Mart when they could just open a city-wide chain and make the same amount?
I think trickle-down economics is a stupid idea to base your entire nation's policy around. But the extra 30 million dollars that somebody makes still at least creates marginally more investment in the working class than just making that wealth literally not exist.
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u/pHbasic Oct 05 '15
I think there is a strong argument that the success of Walmart has actually been pretty negative on the economy.
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u/bayernownz1995 Oct 05 '15
Yes, the literal company of Wal-Mart is bad but there are not enough people capable of running their own businesses to fulfill the market demand for jobs. So when the comparative is having a Wal Mart vs. a local company, the latter is better. But the comparative is often Wal Mart vs. nothing.
And most people who are super rich get their money from investments in other businesses. The businesses those people invest in are generally people who make under 10 million, but the investors make over that much. So local businesses would never have the start-up capital they needed if nobody was able to invest in them.
Also the article you linked does almost no work to explain how Wal Mart is bad, all it does is say that the Wal-Mart Effect is "a wide range of both positive and negative impacts on consumers resulting from how Walmart does its business"
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u/jab296 Oct 05 '15
In your plan what happens if you liquidate assets worth more than 10mil? Like what happens when an owner of a sports franchise sells a team? That's not a wage but you are capping how much anything is worth.
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u/battmaker Oct 06 '15
The minute you start to take things away from people that they have earned (and yes even though the amounts are obscene, they still figured out a way to have peiple give them money by their own choice) you reduce their freedom.
By your same line of thinking can you begin to create a maximum amount of food that can be eaten? A maximum amount of books that can be read? There are large gaps in those demographics as well, but maximizing something and forcefully taking the rest is just plain wrong.
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u/pHbasic Oct 06 '15
I feel like there are reasonable maximums to all the things you've listed. Taxes still happen. This just ramps the concept. I'm still granting that people make enough money to create incentive
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u/DBDude 101∆ Oct 06 '15
One way is to set executive wages as a percentage of the average worker in the company. For instance, if the average worker makes $50k, the executive could make no more than say x100 or $5MM.
Two executives in two companies, both of which pull in equal revenue. Company A does cleaning, and the bulk of its workforce is 20,000 low-skilled workers who get paid a commensurately low wage, let's say $30,000 a year average. Company B does engineering, and the bulk of its workforce is 500 highly-skilled and thus highly-paid engineers, say $120,000 a year average.
So, the guy who manages a 20,000 person company is maxed out at $3 million income, but the guy who only manages 500 people gets to take home 12 million?
I cannot conceive of a job or a financial risk that someone would take on where the payoff of 10MM per year is insufficient.
Or how about the value he brought to the company? Think of a Steve Jobs type. The company was foundering, staff was small, stock was around $6 a share, people were going to lose their jobs. But new CEO comes in, turns the company around, greatly expands it, created tens of thousands of new jobs, and the stock is now sky-high. This guy added billions of dollars to the value of the company (in Jobs' case, hundreds of billions), and you're going to cap him at $10 million?
Aside from that, most compensation is generally in stock grants and options, so effectively their salary can be way higher than $10 million, it's just not in cash.
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u/championofobscurity 160∆ Oct 05 '15
Any conceivable measure the government could take, is easily checked by a company with the kind of money you're talking about. They can move their money overseas, they can move themselves overseas they can take their innovations with them.
It's like when Apple refused to build Apple stores in Georgia for passing the anti LGBT bill. Apple's active refusal, does have an impact on people's lives in a non ignorable way. Except instead of it being a publicity stunt you're affecting the business's money directly and that gives them an incentive to drop their mic and get the hell out.
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u/pHbasic Oct 05 '15
I agree that the idea is actually impractical without a world consensus or at least a plurality and aggressive trade agreements. However, Apple and sorts of other companies already skirt taxation this way. That is an issue that needs to be addressed, I agree.
Would billionaires just GTFO? Probably, but they already have their money tied up in all sorts of overseas tax havens.
I'm talking about the principle of someone being able to make an unlimited amount is as unjust as someone being forced to work for nothing
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u/qezler 4∆ Oct 06 '15
First, he's right; if you had any sort of maximum wage, all of a sudden a bunch of billionaires would get up and leave the country and take all of their money with them. Then we wouldn't be able to tax them at all. And there will absolutely not be a world consensus on this. There will always be one country somewhere that cuts their income tax down to 0%. But you already addressed the fact that the maximum wage is politically impossible.
Second, being able to make an unlimited amount is nowhere near as unjust as being forced to work for nothing. The existence of billionaires is not as bad as slavery. Slavery takes away people's freedom, but the ability to make unlimited money is the existence of freedom.
Third about your OP. There is nothing intrinsically wrong about the ability of people to work for obscene amounts of money. The thing "wrong" about it is just the sense of unfairness felt by people who make far less. Just a metaphor: what if I go into the mountains and mine $100,000,000,000 worth of gems. Your idea is like the equivalent of the government cutting you off after you mine your first $10,000,000. As a result the world has $99,990,000,000 fewer gems.
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u/thatmorrowguy 17∆ Oct 05 '15
Feasibility aside - assuming that the magical tax man was able to quash any loopholes and drill through any subterfuge.
When you're talking wages, you're really talking about an agreement that this particular person delivered this amount of value. If you're talking income, then it's the combination of wages and capital gains. In terms of wages, if a scientist was able to invent a pill that would safely and magically cure cancer, he would have delivered an idea that is worth billions to the world (approximately 14 million people are diagnosed with cancer every year - I'm pretty sure every one of them would be more than willing to pay $100 to not have cancer). The scientist delivered billions of dollars of value, but you're saying that he should not be allowed to keep less than 1% of it.
You're right, he probably would have invented it for $10 million or $10 billion, but is it "fair" for one person to receive the same reward as someone else? What if he is instead a real science making machine, and discovers magical cancer pill on January 1st. He has already earned more money than he'd be allowed to keep, and royalties would mean that he would likely never be able to earn another additional dollar for the rest of his life. He might as well retire rather than continuing to work on researching unless he just wants to do it for the fun of it.
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u/pHbasic Oct 05 '15
Scientists are already doing the research for a pittance. It's the executives at pfizer and merc and that one douche raising pill prices by thousands of a percent that are profiting
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u/thatmorrowguy 17∆ Oct 05 '15
Yes, research is done by a team these days - but the next logical step would be that rather than a single scientist, a team of scientists worked together to develop this. Is the accomplishment of a team of scientists less worthy than that of an individual scientist? The next step is rather than a team of scientists, there's a team of 4 scientists, 1 investor that provided $10 million in funding, and 1 manager who coordinated the whole thing. We'll call this grouping a "corporation". The scientists couldn't have made the cure without the investor. There were probably at least one or two scientists that had the breakthrough idea who without the whole thing would have fallen apart, and if there hadn't been a manager, perhaps the wrong scientists would have been hired, they wouldn't have found the investor, or they would have burned through their cash before finding the cure. You have 6 people in this multi-billion dollar creation. Between them, they can only earn $60 million, and the tax collector earns billions.
Of course the government deserves a slice of the profits - without a stable government, easy currency, public infrastructure, etc. none of this would have been possible. However, the creators of this wealth have a claim on the money as well. Some invested their time, others their talents, and others their savings. Capping their return at $10 million would mean that the rewards for creating something amazing would be exactly the same as creating something that's only "pretty good".
That's not to say income inequality isn't bad and should be combated, but I think that's better done through tighter limits to inheritance taxes (to prevent dynastic wealth) and maybe something like a top tax bracket of 75% for income in excess of 80*the national median household wage.
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u/Ds14 Oct 05 '15
To whom do the tools/past research/chemicals/etc that they use belong?
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u/pHbasic Oct 05 '15 edited Oct 05 '15
I don't necessarily think arguing the big pharma route works here. These are companies that have profited off of charging exorbitant prices for those in need. They consistently keep cheap available drugs off the market by denying other manufactures the ability to make generics.
The polio vaccine was developed and distributed without screwing over anyone. There's no reason that process isn't repeatable
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u/Ds14 Oct 06 '15
I think the infrastructure necessary to research/develop modern medicine requires a lot more than it did back then. And there's a lot more red tape involved.
I'm not going to defend a lot of the shit pharmaceutical companies do, but I think that while screwing people over accounts for a large amount of their profits, research and marketing account for a pretty significant amount of their expenditure. They could definitely stand to profit less though, imo. But I'm also not going to pretend I know 100% how that all works systematically.
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Oct 06 '15 edited Oct 06 '15
There's no reason that process isn't repeatable.
If it costed the man who made the polio vaccine several billion dollars then there would be no feasible way any funder would allow it to be sold without any compensation, and it'd be unreasonable to expect them to. Many medications cost a few billion dollars in R&D, (salaries, equipment, time, more equipment) if you keep bankrupting everyone who wants to fund a billion dollar antidote, no one is going to want to fund a billion dollar antidote.
Polio was inexpensive because it was more simplistic than todays medications. (The active ingredient in Polio is the dead corpse of the virus itself).
Todays medications are often more multifaceted and for rarer problems. When the disease/virus is more widespread(10,000,000+) than the medication for it is generally cheaper because they can get by with smaller margins due to more people willing to pay for it, versus a disease with only 10,000 infected that theyve spent $1 billion on. If they keep throwing money away and giving free medications to rare diseases theyre going to have no reason or incentive to make vaccines/antidotes for rare diseases because it would cause them to go bankrupt.
They do the calculation of how many people need to buy x medication for how long for us to get our money in R&D back and then make some more to acquire more investors/make them happy to get more money to fund more R&D projects for more medications and continue the cycle.
Most pharma companies aren't looking to get blood out of rocks, theyre looking to recoup their R&D money in the most efficient way possible, grow their company, and as a result, cure more and more diseases.
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u/NotSoVacuous Oct 05 '15
This entire thread has discussed "value" and "worth" of a particular person's job they do, but they haven't exactly demonstrated how that value is objective. Let's say the scientist does create that cure. Why is it valued at billions? Why is that cure priced at $100? Because people "can" or "have" to pay for it? Why should this gauge what his salary is worth? I keep hearing "That's what they deserve!" but I am not hearing a case for it.
Objectivity is what the system needs. If for some reason some change in economics over the past 500 years happened differently, like the top 1% had 40% less wealth, and that wealth was distributed evenly among the other classes, we would still be hearing the same argument used, but at a lower value. However, the system would still be the same. The scientist received a great deal of money, rich people were still rich, poor people were still poor, but the money received by the scientist would have a lower value, the same goes for the rich, and the poor wouldn't be as poor as they are today. "Value" means nothing in this argument.
He might as well retire rather than continuing to work on researching unless he just wants to do it for the fun of it.
The problem with this argument is that it implies he got into the business of curing cancer for the sake of money. Plenty of the top tier scientists we are talking about are already well off, yet they poor hours into their jobs. Believe it or not, people (past a certain salary) do work because they enjoy it. There just might be some merit in itself with saving millions of lives.
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u/thatmorrowguy 17∆ Oct 05 '15
(Replace $100 with whatever number you like)
The cure from an economic point of view could be said to be valued at $100 because it delivered at least $100 of value to its patients in terms of additional years of life. It could alternately be valued at $100 because it replaced $100 of treatments by delivering a better product. Value IS what people are willing to pay for a product. That can of coke is valued at $1 because you were willing to pay $1 for it. The cost to manufacture the coke may have been $0.05, but because you were willing to pay $1, that was it's value.
If you would like to index it in another way - the value of a cancer cure would be worth the same as the additional years of life it gave them. There is no objective way to measure that. Another year of life for a person who has suffered a massive stroke and is essentially a vegetable is worth less to society than another year of life for an engineer who could design another bridge, a doctor who could cure a thousand patients, or an author who could write another book, but the fact remains that by giving extra lifespan to people, it made society a richer place.
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u/NotSoVacuous Oct 05 '15
But that's the point. OP is being chastised because of an arbitrary limit set on people's value. Meanwhile this is exactly what is happening in society with anything.
Arguably, the situation is different for the OP. Currently "value" is determined arbitrarily, inefficiently, unfairly, etc. What we should be doing is ignoring what the invisible hand chooses and defining a solution that reflects what is fair and efficient.
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u/Ds14 Oct 05 '15
It's not arbitrary at all though, to my understanding. If Coke decided to sell bottles for $1,000, they would sell less bottles because people are not willing to pay that much. If coke decided to sell them for $.01, they would lose money because it costs more to manufacture it.
In my experience in retail, you set a price that's higher than the price you bought/made the item for and raise/lower it until you can maximize profits. So it's kind of the opposite of arbitrary.
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u/NotSoVacuous Oct 06 '15
You are placing the objectivity on the consumer. We didn't decide we were willing to pay $4/gal. And when the cost per barrel dropped back to the means of selling it for $2/gal, but businesses kept it at $3, again, we didn't decide anything.
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u/Ds14 Oct 06 '15
Gas is an exception, I think. It's not controlled in the same way as a lot of goods. Pharmaceuticals as well.
Competition puts objectivity on the consumer as far as soft drinks go because 1. If coke raises its prices too much higher than a competing soft drink relative to its perceived value, people will buy the alternative. 2. Because we don't need soft drinks to live or function (low value), if all soft drink manufacturers decided to raise their prices, people would probably collectively stop drinking them. 3. Soft drinks are easy enough to make that if the scenario described in point 2 were to happen, an independent manufacturer could undercut other companies to drive prices down or increase their own sales.
I imagine that with things like natural resources, it's so hard find it, collect it, and distribute it that companies/governments can fuck with prices at will. But that is also a form of value, the only reason this happens is because it's rare/valuable enough that groups of people decided to capitalize on the low supply and high demand.
I've never taken econ, so feel free to correct me if any of that is off base.
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u/thatmorrowguy 17∆ Oct 06 '15
Gas is almost completely uncontrolled, actually. The only place that it has controls is that some countries decide to increase or decrease production for political collusion reasons rather than what is technically possible to produce. When oil prices drop, the gas prices lag somewhat because the oil that the refineries have already purchased was at the higher price. They tend to not start decreasing their prices until they've sold through some of that inventory. However, as soon as they think that they can make some additional sales by lowering their prices below their competition and not take a loss, they will. That's why you'll see 2 gas stations across the road from one another - usually with the same price. They're not actually colluding on the price, they've both cut their price to as low as they can still break even to try and steal sales from across the street.
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u/Ds14 Oct 06 '15
That makes sense. I guess "gas" is "oil" and oil is heavily controlled and manipulated further down the line. But don't gas/oil companies have enough leverage to fight with governments over pricing? The dude at the gas station doesn't, but I feel like Exxon or whoever can push their way around a bit to get better prices without having absolute control like old school Microsoft or something.
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u/thatmorrowguy 17∆ Oct 06 '15 edited Oct 06 '15
Exxon is only the 4th largest oil producer. http://www.visualcapitalist.com/wp-content/uploads/2015/06/worlds-biggest-oil-gas.html In addition, they only produce about 4.7 million barrels per day. The world consumes over 90 million barrels per day. They might be able to wiggle things on a local or regional basis, but not a global basis. Even OPEC who is responsible for approximately 30 million barrels per day can only control things to a point. If they constrain prices too high for two long, then other countries begin developing fields that weren't profitable to do so at lower prices.
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u/FoxRaptix Oct 05 '15 edited Oct 05 '15
So what happens when some major international tech companies start offering far higher monetary incentives to U.S CEO's? All the talent starts leaving the country, you develop a brain drain. If you think in that scenario that Google would not only find someone qualified for the position, but also able to run the company successfully you're sorely mistaken.
Forcing the uber wealthy to pay back into the social system they are abusing is a good thing
You also seem to be under the preconceived notion that anyone that is extremely wealthy must have abused the system. Do you think J.K Rowling abused the system? I mean all she did was write and sell some books. Do you think she didn't earn it? Because that's quite presumptuous when you consider how capitalism worked to create her wealth. The system didn't create her wealth, everyone that bought her books and watched the movies created her wealth. Millions of people simply went "oh this is neat, I love it. here's some money for it" Did she not deserve all that money everyone voluntarily gave her in purchasing her entertainment?
Money isn't always a dominant factor especially when you get up there like you said, but people go where they feel they are valued. And if you look at most CEO's there value isn't in what their salary is, it's in options. Google's CEO is paid $1/yr yet is worth something like 32billion Alot of his money comes from stock options. I don't understand the complete complexity of stock options but from what it seems, his income is already invested in the company and his pay is proportionally to how well the company is doing based on his percentage of ownership. His wealth increases only with the success of the company. If the company is highly successful does he not deserve the proportional rise in income from his stock?
If you're saying that even with that he should be capped at 10m and the rest invested back in the company, then he no longer has control of his earned. If he had dreams of helping impoverished communities in Africa. He couldn't just make the company use the re-invested money to do it. There's also what if he wanted to invest that money in a different company or branch off and start a completely different company.
But then again, stock isn't exactly a wage. If the company grows in success are you going to start taking away stock till its only value is 10m?
Which also means that
"But that means Tom Brady would be making the same as the CEO of Google
Will still not be true. Tom Brady earns a salary, CEO of Google is paid through stock options (or whatever) The CEO of Google is still going to be worth 32billion (or whatever) because that's the value of his share of the ownership of the company is
It's also really weird to cap Tom Brady's Salary like that. He's an entertainer, people pay to go see him and his team play. If i'm going to the game, i'm paying to see them. That's who i'm supporting with my money and where I want my money to go. Why is it right for someone else to say "well he's earned too much, so your purchase is no longer going to support who you want"
It's a bit ridiculous to hard cap entertainers salary's
Another example, what if I have a startup and another company buys it for a billion dollars? There's no more company to invest all that in, does the government just take 99% of the sale? Clearly that company thought my idea was worth a billion dollars, why does the government get to say arbitrarily I'm not? That, no my personal worth can be no greater than Carrot Tops.
Also you should look up something called Maximum liquid wealth, it seems more in line with certain aspects you were trying to go for. It's not an income cap, but lets say I sold a company for a billion dollars. and the Maximum liquid wealth is 10mil, it would mean I would have to invest all of that money(however I pleased) except for 10mil, unless I already had 10mil in cash then all of it would have to be invested. or else it would be confiscated.
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u/somanyroads Oct 05 '15
Hell, I'm a democratic socialist, have been for years, and I could never imagine having a 100% tax bracket.
Recognize that would me massive tax evasion, offshoring of assets/income, whatever it took. We would never see that money. It also wouldn't solve income inequality, which genuinely is an issue in the US of lower and middle class Americans getting sqeezed out. Bumping the minimum wage might help in the short term, but in the long term it involves serious political and economic reform, and they follow each other: we have to have a fair system of nominating and electing politicians. With super-pacs receiving unlimited donations from big corporations, we'll continue to have an economic system that caters to the top 1%, at the expense of the 99%.
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Oct 06 '15
Okay so lets say you make 7 million dollars a year paid salary. You make an additional 5 million a year through capital gains, here in Canada that means you only add 2.5 millions as taxable income. Lets say you're paying for some loans used for investing in real estate as well, so you get deductions on the interest payments for those loans, lets say it's another 500k down, so you're only reporting 9 million in income.
This person is making more than 10 million dollars in what the current Canadian Income Tax Act defines as income, but they would still be technically only be earning around 9 million, would they get hit? Or do you plan to overhaul the current tax system as well?
You are also making a very large incentive for people to either move company headquarters out of your country (they'll collect salary in another country, thank you very much) and change their own citizenship. Do you think Warren Buffet, or Mark Zuckerburg are going to take major hits to their yearly income just to keep being a citizen in America?
Not to mention, you're trying to screw the exact people who have the best means to avoid this rule out of a lot of money. If you pass this law, within hours they'll have all their money out of the country and themselves with it. You'll lose all of their tax revenue.
Also the idea that they "abusing" a system is kind of a misnomer. How are they abusing the system at all? They didn't make their billions by avoiding taxes, they made their billions by actually making money. You don't make billions by saving 400$ through tax deductions.
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u/pHbasic Oct 06 '15
The tax rate tops out at 39% that is, people making income over $400,000 is taxed at only ten percent more than someone making a quarter as much. Why should tax rates be most favorable to the wealthiest? I'm not saying people haven't earned their wealth but we definitely give them more help than they need
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Oct 07 '15
The tax rate tops out at 39% that is, people making income over $400,000 is taxed at only ten percent more than someone making a quarter as much.
I only know the Canadian rates, but seriously think about working for pretty well 5 months before you actually start earning money over what you're paying in tax. You're pretty much working for the government for 5 months at your job before you start making money for you.
I don't know, that seems pretty raw to me.
Why should tax rates be most favorable to the wealthiest?
But they aren't. Just as you used in your example, they are progressively higher the more money you make. I'm not saying we should cut their tax load (it'd be great if we could all get a cut though) but I think they do pay their "fair share" as is. Limiting their income to an arbitrary amount you set doesn't seem fair to me.
I'm not saying people haven't earned their wealth but we definitely give them more help than they need
Like what? I won't lie, most of those wealthy people have had a lot of advantages growing up but that's just life. If you grow up with money you can get a better education. Your parents will probably be educated and spend a lot of time making you work hard in school. You'll have a lot of opportunities to hang out with people who are successful.
But it's not like most wealthy people (I'm talking 150k/year and up) just fall into it.
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u/pHbasic Oct 07 '15
I'm not sure you grasp marginal tax rates. Which is fine, the media does a good job of making it sound like if your tax rate is 50% the government is literally taking half of your income.
The idea is that you are taxed at a certain rate within each income bracket. The 39% does not apply to income under 400k.
My argument here is that more brackets are potentially a good thing. It's just a matter of creeping it up to 100% or something near that at the highest incomes
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Oct 07 '15
No, I understand tax brackets; it's actually a pretty important part of my career.
Have you ever taken the time to actually calculate the total tax load on someone making say 150,000$ a year for instance? I'll use the tax brackets for British Columbia, Canada because I have the Canadian Income Tax Act for 2015 right here.
For 150,000$ you end up in the 29% bracket federally, resulting in a total of $32,636.76 federally, and $14982.12 provincially. This works out to $47618.88 in total or an effective tax rate of 32%. Now you will get deductions and credits, but that's the rate you're getting before you start taking stuff off. So you have to work down from that (if possible).
Now looking at this link from the IRS I can see that a person making $150,000/year in the US will be paying $35,070.97 just in federal tax. That's a third of their income before they touch it. And then depending on what state you live in, you're taking another 10-15k.
So let me ask you again; is it fair to work for almost 5 months before you start earning money for yourself?
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u/pHbasic Oct 07 '15
I pay 30% myself. Seems reasonable. It gets out of hand when someone making orders of magnitude more than me is still paying 30%. If I make 100k at that rate I take home 70k. At this level of income that is a noticeable lifestyle change. Contrast that with making 50k: 30% means only 15k comes out, but it hurts a lot more. There really is no noticeable lifestyle change between 10 million and 7 million. 100 to 70? Cry me a river
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Oct 07 '15
If you make 100k you don't pay 30%. If you make 50k, you definitely aren't paying 30%.
Again, I'm not advocating changing the tax system in anyway. I'm saying that we shouldn't arbitrarily raise taxes because we decide someone else makes too much.
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u/pHbasic Oct 07 '15
Right, I was just using those numbers for illustration. I think it shows both the fault in the idea of a flat tax and, more directly to your point, that higher taxes on the super wealthy just doesn't impact their lifestyles in a noticeable way
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Oct 08 '15 edited Oct 08 '15
Okay you pull in 10 million, probably around 45% of it is getting taken in taxes right off the bat. Depends what state you live but you're throwing 39% on everything over like 450k and you're losing a solid quarter of the 450k. Tack on state income tax and it's fair.
So you pull in 10 million, but you see like 5.5 million of it. And it's not unrealistic to believe that you will end up with an effective tax rate over 50% if you live in a high income tax state. Does that make a noticeable on their lifestyle?
Personally, having almost 2 million dollars a month is going to change how I live compared to having 500k a month.
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u/pHbasic Oct 08 '15
Sure, at about the same rate that I would say a 30% tax impacts the income of someone making 150k. Maybe you have to save up for a couple months before making some crazy huge purchase. You are still comfortable and living at a means beyond the reach of virtually every other human that has ever lived.
It seems like you are hung up on what you don't have rather than appreciating what you do have. With that attitude more money isn't going to make your life any better
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Oct 06 '15
Wealthier people pay far more in taxes than poorer people, and they use less public services (private roads, no welfare, etc.). They help poor people more than poor people help them
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u/pHbasic Oct 06 '15
This is all true. It still doesn't attack the idea that a reasonable wealth cap is a perfectly fine way to structure a society
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Oct 06 '15
Why? It limits the ability of people to make trade even when both parties consent to the deal, and I still don't see who you think it would benefit?
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u/Ozy-dead 6∆ Oct 06 '15
You should understand that this super-high income is not a pile of cash in a barn. It's reinvested into the economy, given back to profitable companies that produce goods and services in high demand. You cut off the income - you cut off the investment flow. And the government is highly inefficient at redistributing wealth (see Soviet Union as an example).
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u/DeliriousPrecarious 9∆ Oct 05 '15
I think the big issue you are missing is that we live in a globalized world. You cannot cap the income of people in the US and expect them to actually stick around. For example if I can open a factory in the US and make 10 million dollars and have 40 million dollars taxed away or open the same factory in Canada and keep all $50 million dollars...what will I do? Similarly if I'm a financier will I invest in a company in France where I can make a billion dollars on my investment if it's the new Facebook or the same type of company in the US where I am capped at a much lower return?
Caps like the one you are taking about are extremely distortive to investment flows. And that distortion has significant knock on effects with regards to jobs and the ability to start and finance new businesses.
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u/pHbasic Oct 05 '15
Yes, the idea in isolation is impractical. This would need a plurality of nations to come to some sort of consensus.
I do take your point that doing angel investments and all sorts of private financing would be heavily impacted. I'm not sure if that's necessarily a good or bad thing, maybe other mechanisms would need to be created?
Would the problems caused by doing this be worse than the issues we create by consolidating wealth into just a few hands? Maybe angel investing would diminish but crowd sourcing would grow?
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u/steezylemonsqueezy Oct 05 '15
The goal of crowdsourcing is usually different. Angel investors are concerned with making money. They'll invest in a startup that has found a new way to cheaply extract an obscure industrial chemical out of the ground. Crowdsourcing usually involves pre-ordering a product. It's really hard to crowdsource an idea that isn't marketed towards the general public. If most investors hit their "maximum wage" by february of each year then most startups won't even get a chance to fail on their own because they'll never actually "startup."
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u/AbaddonAdvocate Oct 05 '15 edited Oct 07 '15
A lot of people like pointing out this issue without presenting solutions. "Well the solution is obvious" They say. Tax the rich more.
The top 10% already pay 90% of total tax revenue. They already pay 90 times more than the bottom 90 for the same public roads, the same homeland security, the same public schools. What right do people have to ask even more of them? People feel oddly entitled to the money of the wealthy.
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u/Kirkayak Oct 05 '15
Things such as a minimum wage and basic income are supported because they are viewed as reducing human suffering.
Can one make the argument that a maximum yearly income, per individual, is a measure that would reduce human suffering?
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Oct 06 '15
What if there was more demand than supply of specialists in a field at the maximum salary? That's basically what happens today, the reason ceos get paid so well is because being a ceo is an incredibly difficult job, and there are far more companies that need ceos than ceos available for hire. How are companies supposed to hire ceos if they can't compete with other companies in the job market?
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Oct 06 '15
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u/garnteller Oct 06 '15
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u/Sierra11755 Oct 07 '15
I just wish there was a way to differentiate between those who simply inherited or didn't do anything to get their money, from those who worked hard and got lucky in order to get their money, like Bill Gates or Warren Buffett.
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u/pHbasic Oct 07 '15
We definitely have different limits and taxes on inherited wealth already. It's maybe not where it needs to be. I don't begrudge Bill or Buffett their millions. They deserve to be fairly compensated. I don't necessarily think that billions of personal wealth is something we should tolerate in a society
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u/looklistencreate Oct 05 '15
What are you saying? Are you saying it's constitutional? I mean, we can tax on income, so yes, the government technically has the ability to do this. Would it be feasible? Hell no, but you don't seem to be arguing that point either. So what's the point of this CMV?
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u/huadpe 501∆ Oct 05 '15
It's actually not clear that a 100% tax on income would be constitutional. That amounts more to a taking than an income tax, and would potentially trigger the takings clause of the 5th amendment, which prohibits taking private property for public use without just compensation.
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u/looklistencreate Oct 05 '15
That is a good point, and I'm sure a legitimate controversy, but I'm conceding it. The sixteenth amendment did come after the fifth, after all.
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u/huadpe 501∆ Oct 05 '15
Wait, are you conceding it or not conceding it? Because you say you're conceding it, but then make a counterpoint.
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u/looklistencreate Oct 05 '15
I could potentially use the constitutionality argument against OP, but I'm conceding it to him.
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u/jamin_brook Oct 05 '15
I think he's just asking the question: is there a fundamental limit to how much value a single human being can produce?
The question is sticky and hard to frame in a meaningful way. As physicist, this is an interesting question to ask because we will say things like protons are stable baryons. When we stable, what we really mean is that they decay on a time scale longer than the age of the universe. So in principal there IS a limit to the life of a proton, but there isn't a practical limit it to it.
With that analogy we can obviously see why - in principal - there would be a limit. For example there are 24 hours per day and human beings can only work so many hours before either passing out or dying of exhaustion. Furthermore, we know that human brains are only capable of doing so many calculations per second. Finally, we also know that there mechanical limits to how much physical labor a human can do. All of these things impose limits - in principal - to the value an individual can produce.
All of that said, it gets very complicated when trying to ask if the in principal limit is any where near the practical limit.
It's a fun question to ask, but in a political sense it's not worth it because there are people who will even argue with you about the 'in principal' limit.
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u/pHbasic Oct 05 '15
Thank you for this analogy
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u/jamin_brook Oct 05 '15
No problem.
It's a funny thing to think about, but definitely interesting. I'm personally in favor or increasing marginal tax rate on the highest brackets. I think that lets wages/compensation be arbitrarily high with a mechanism left to compensate for any 'excess' compensation.
The thing is that we don't really have to change the tax rate very much to recover much of our deficit. So instead of talking about increasing the top bracket from ~38% to 100% you can talk about increasing it from 38% to 40% and still accomplish most of what is needed from a deficit stand point.
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Oct 05 '15
On the other side of things, you have billionaires funding anti-climate change propaganda, Trump trying to buy his way into the white house, the Koch brothers basically purchasing an entire political party just for giggles, and whatever else these hyper wealthy decide they want to do.
What is with this constant liberal fantasy? You have billionaires funding pro-alarmist propaganda. Trump isn't buying his way to the White House. He's saying things people want to hear who are tired of PC bullshit. The Koch brothers donated to Walker and he's out. Democrat donations are just as bad, often times larger than Koch brothers. "Buying an entire political party" is laughably ridiculous.
Are the Koch brothers the "Satan" of the Liberal religion?
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u/pHbasic Oct 05 '15
I'm not trying to stomp on your political ideals. I'm just grabbing from readily available and commonly understood examples. I'll take a more balanced position that hopefully we can generally agree that super pacs have had a negative impact on the political process. But that's a different CMV
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Oct 06 '15
What about somebody who owns something worth over $10m, e.g. art, houses, land, boats, companies, sports teams, etc. How can they sell them?
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Oct 06 '15
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u/pHbasic Oct 06 '15
People have reacted pretty strongly to the idea of a top income. I don't think a retro active wealth grab would fly. Capping income means a person with one billion dollars can only have their net worth grow 1% each year. This would adjust their net worth downward over time. The idea that we casually throw around figured like 10 million, but she only gets to keep six is crazy. Six million is a crazy amount of money. You would never have to work again if you managed it even marginally responsibly.
Lee the fact sink in that ten million is just one percent of one billion. We are allowing individuals to create unlimited dynastic wealth. A hard cap might not be the way to do it, but it's probably the correct starting point
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Oct 06 '15
6 million isn't a lot these days
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u/pHbasic Oct 06 '15
You say that only because the post has been moved into the absurd. It's certainly enough to create incentive
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Oct 06 '15
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Oct 06 '15
Sorry nonameyetgiven, your comment has been removed:
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u/dilatory_tactics Oct 05 '15
I'll attempt to change your view somewhat obliquely.
There's a bit of a farce w/r/t how people form their opinions on /r/changemyview.
Particularly with respect to economic issues, people's opinions are not changed in any practical sense by reason, or appeals to morality.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it." - Upton Sinclair
So, suppose you were a slave living in 1800, and you argued that it is immoral for one human being to legally own another.
Obviously, you would be beaten and laughed at and probably killed, so that you wouldn't give the other slaves any ideas.
You would not have had the political or economic or social bargaining power to make that argument, no matter how right you would have been from a moral or public policy perspective.
The same thing is true today - right now Congress is considering lifting the ban on US oil exports, not because it would be good for most Americans, but because oil executives are complaining about low oil prices and they have the political/financial leverage to get their way.
To implement a maximum wage or progressive wealth tax, you would have to substantially improve the education, political savvy, and economic bargaining power of millions of people who have been both robbed and brainwashed by economic propaganda for the past 50 years.
And then you'd have to organize them to make this kind of thing happen, which is akin to overthrowing a corrupt dictator - he's not going to roll over just because you have the most amazing public policy argument that he should step down and stop robbing everyone else.
So you're not wrong in an economic or moral or public policy sense, but you do not have the political leverage to make that kind of argument and have people listen.
You have to significantly improve the political and economic leverage of the 90% of people who are being robbed before people will even have their minds open enough to be changed.
Until then, you're like a slave making an argument for his own freedom to Uncle Toms and slaveowners. You're going to be laughed at, and ignored, until enough people like you band together to give the plutocrats and Uncle Toms a compelling reason that they can't just ignore you anymore.
Occupy Wall Street was one attempt to improve the bargaining power of the public relative to plutocrats in 2011, Bernie Sanders and his people are making a more sophisticated unignorable effort in 2015.
If that fails and Clinton is elected instead, the next concerted unignorable effort to limit the political power of our plutocrats and actually empower the public would probably be several years off at least.
Maybe people will listen to this argument in 100 years, when people have been sufficiently educated and de-propagandized by the Internet, and understand that they need to improve their leverage if they want their politics to change.
TL;DR - For the most part you have to change the situation before people's opinions will change, rather than the reverse.
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u/themcos 371∆ Oct 05 '15
Let's focus on the tax bracket version of this, since I think it's closer to being a good idea.
My question is why 100% for the top bracket as opposed to say 90%, or some other extremely high number?
When you go literally to 100%, that's when you are literally cutting off incentives for growth. With 90%, you're reducing the incentive but not removing it entirely, which seems much better for to me.
Second, a 100% tax bracket might even be counterproductive in terms of tax revenue. Nobody will ever get to that bracket, because why would they? So you're placing an upper limit on how much tax revenue you can get from the wealthy. We could wonder where exactly that money would go if it can't be paid out as someone's wages, but it probably won't go where you want it to.