Growing wealth inequality

[Purple]

Source please!

My apologies, I meant to say that 80% of VC investment is in the USA. The US accounts for a around 70% of global stock market value.

 

[JimmyB99]

Still a bit out! The link provided shows the US having a market cap weighting of 65.4%. (The 70% refers to "flows" into the global market).

 

[Purple]

Effective tax rates paid by the wealthiest were significantly lower than the statutory marginal rates due to deductions, exemptions, and the structure of the tax code. While the marginal rate hovered near 90%, the effective federal tax rate for the top 1% of earners was approximately 42% to 46% during the 1950s, with some estimates suggesting the actual burden on the very highest incomes was closer to 16–25% after all adjustments.

Yep, capital is mobile, now more than ever. Inheritance is an easier thing to tax. That was also very high back then. The true effective income tax rate for the top 0.0002% of Americans is currently around 23%. Here's the kicker though; when expressed as a percentage of overall wealth the tax rate paid by that top 0.0002% is 1.3%, a half of what it was in 2010.

The wealth of the Forbes top 400 Families in America was 2% of GDP in 1985. It's 20% today. I don't think that's conducive to a stable democratic and meritocratic society where equality of opportunity is a guiding principle.

For those who say that it's not really possible to calculate the wealth of the top billionaires ponder this; did Melinda Gates and Mackenzie Scott (formerly Bezos) make divorce settlements?

Edit: the super rich in Europe generally pay less tax then their US counterparts.

 

[Purple]

Still a bit out! The link provided shows the US having a market cap weighting of 65.4%. (The 70% refers to "flows" into the global market).

I was responding to the proposition that the post war industrial dominance of the US was the reason that there was greater income and wealth equality. For the purpose of that discussion my point stands, or are we just arguing semantics? "Around 70%" is close enough to 65.4% for the point to be valid, and is certainly close enough to not warrant an exclamation.

 

[Purple]

False. I responded you that the post war industrial dominance explained your previous premise:

we saw a massive increase in living standards, real wages, life expectancy and home ownership in the developed world
That increase, was made possible as result of the dominance of US manufacturing post WWII.

How did the the post war industrial dominance of the US increase living standards, real wages, home ownership and life expectancy in the UK?
The increase in home ownership in the US was mainly due to the GI Bill which gave cheap loans to returning white GI's. By the end of the war the Government controlled over half of the countries GDP. That dropped dramatically over the next decade but credit fuelled consumer spending replaced it as a driver of the domestic economy. None of that explains any of the factors above; there have been plenty of economic booms before and after that which didn't increase real wages, living standards or home ownership rates.

You had claimed it was because of taxes on high earners. Which I also dont agree with.

No, I said it was because of taxes on wealth. Income and wealth are two very different things. I am not in favour of high taxes on work. I am in favour of higher taxes on unearned wealth. Wealth accumulated through capital appreciation is not earned.

Insfar as "income equality"..
I'm totally ambivalent toward this concept of equally distributing of wealth ratios across socioeconomic groups.

What mixed or contradictory (ambivalent) views do you hold on the concept of equally distributing wealth ratios across socioeconomic groups?

I an certain in my view that I am completely opposed to the equal distribution of wealth across socioeconomic groups. Such a thing would require a large and oppressive government and the removal of most of our individual freedoms. Any time it has been tried it has led to mass murder, oppression, economic collapse and brutal authoritarianism.
I am in favour of higher taxes on wealth. That's a completely different thing.

 

[MOB]

I am in favour of higher taxes on unearned wealth. Wealth accumulated through capital appreciation is not earned

Not entirely disagreeing with you, but just making the case for some nuance in a very black-and-white position.

Some people my age spent hefty money following Ireland at Euro '98. Really serious expenditure by the standards of that era.

Some people didn't, and instead put the same sort of money into their pension schemes.

The pension people deprived themselves of a wonderful experience and many happy memories. But...their savings have appreciated and compounded like gangbusters.

They would say that by deferring gratification (which they will continue to defer, because they are just made that way) they have 'earned' this capital. I don't entirely agree with them either, but I can't quite bring myself to say that the capital appreciation in their nest eggs is wholly unearned.

 

[Purple]

Not entirely disagreeing with you, but just making the case for some nuance in a very black-and-white position.

Some people my age spent hefty money following Ireland at Euro '98. Really serious expenditure by the standards of that era.

Some people didn't, and instead put the same sort of money into their pension schemes.

The pension people deprived themselves of a wonderful experience and many happy memories. But...their savings have appreciated and compounded like gangbusters.

They would say that by deferring gratification (which they will continue to defer, because they are just made that way) they have 'earned' this capital. I don't entirely agree with them either, but I can't quite bring myself to say that the capital appreciation in their nest eggs is wholly unearned.

I'm also a person of that age. I would have left them with more of their earned income when they were working so that thy could travel and/or invest but then taxed the unearned returns on their investments.