frenchyd said:
In reply to RX Reven' :
Interesting take. I would disagree, access to education, access to friends controlling resources, ambition, and time. Limit many from achieving wealth. ( billions).
I don't think our two views are mutually exclusive....you listed several factors that create a barrier to wealth (agreed) but one of them wasn't "some rich guy is hording all the money leaving none for me". Money is an abstract representation of value and there is no limit to how much value can be created.
In terms of what would happen if we redistributed all the money equally next week...everyone would stop producing since there's no incentive. Basically, we'd have money (abstract) but nothing to spend it on (tangible).
BTW, I really like the comment you made earlier....
To paraphrase, relying on the rich benefits the rich...relying on the worker benefits the worker.
RX Reven' said:
There is absolutely nothing stopping all of us from becoming billionaires but the media and politicians like to promote the misnomer that money is somehow finite "you don't have a lot of money because that rich guy is hording it" to stoke contention as it gets clicks and votes.
If everyone was a billionaire you'd have to pay your billionaire mechanic at least 6 digits to even think about doing an oil change. Which he'd probably have to do to get billionaire farmers and grocers to get him some food.
The economy isn't technically zero-sum but it's close, and the idea that massive wealth inequality is harmless is demonstrably wrong just from an economic standpoint, to say nothing of social issues. I'm pretty sure getting into that would be too political for this thread so if you're interested in discussing it you should PM me. You're a stats professor so I should be able to convince you by presenting the evidence.
In reply to GameboyRMH :
I respectfully disagree.
Look at how the labor content of goods and services has consistently come down over time.
Automation relentlessly replaces labor...in a few years a robot will be tending to the farm and few years after that a robot will be changing your oil, etc., etc..
The back story to Star Trek was that in the future, labor had been "solved". Nobody worked, nobody got paid, everyone onboard the Enterprise was there just because they wanted to explore.
Right now labor participation is around 62%. I'm 57 years old and I expect to see that number drop to below 50% in my life time.
The minimum skills required to compete with robots keeps going up and that could be a wonderful thing if we're smart about handling the transition.
Bill Gates suggests charging robots an income tax to fund a UMI (Universal Minimum Income) and I agree with him.
COVID has expedited the transition where more and more people are deciding their time is more valuable than money (help wanted signs everywhere & supply chain shortages are two signals that it's happening now).
Added later...
I do agree with you that excessive wealth inequality is bad...you're not going to work your a$$ off if there's no money in it and if you've already got tens of millions, are few more won't motivate you either. The trouble is that the solution "redistribution" is even more toxic to productivity.
I foresee two distinct life paths emerging in the fairly near future...some will choose the UMI path (modest standard of living provided by the government with complete freedom to spend time as desired) and some will choose the career path (highly educated, high standard of living, high time commitment).
Again, this doesn't have to be a bad thing...we just need to be smart about managing the transition to a highly, highly automated world were most people lack the skills to compete with the robots.
In reply to RX Reven' :
Massive wealth inequality would indeed be a much smaller problem in a world with little to no labor content in goods and services, but I'm not sure how that relates to the current reality or anything close to it. I agree that automation could turn out very well if we're smart about handling the transition, but so far all indications are that we're headed for Elysium rather than Star Trek.
In reply to GameboyRMH :
I added some stuff while you were posting...probably bad form, my apologies.
RX Reven' said:
[snip]...this is not desired but the only solution is redistribution which disincentivizes the most productive amongst us.
Are we sure about that? My account balance says I've been amongst the most productive of my age group, but I'm solidly in favor of more redistribution in several areas and ways, rather than less.
Anecdotally, I'm not sure Elon Musk would change what he does if his personal wealth was taxed at a higher rate. Buffett has called for higher taxes on the wealthy, and he and Gates are convincing billionaires to simply give away their half their wealth when they die.
There are certainly other wealthy people who don't want their wealth taxed, but I'm not sure it would change their "productivty," or be a net negative for the world.
In reply to RX Reven' :
Star Trek also indicated WW3 happened, so the path between "now" and "Utopia" wasn't exactly smooth...
In reply to CrustyRedXpress :
There's always exceptions but generally speaking, I think most people make a concerted effort to pay the least amount of tax possible. For example, a full sized moving van costs $4,000 to go from California to Texas but only $800 to make the return trip because there are a lot more people moving away from taxes than moving towards taxes.
Additionally, there's the consumption side of the equation...I recently let my pool guy go because he wanted $120 to clean my filter. I need to gross $160 to net $120 and that $120 (assuming he has the same 25% effective tax rate) only nets him $90 after he pays his taxes.
What should be a nice symbiotic relationship (I do mathy things and he does pooly things) gets spoiled with the government siphoning off 43.75% of the money from a simple two-party transaction (160 X 0.75 X 0.75 = 90).
In reply to RX Reven' :
Yet population in California is still growing. The population will continue to grow while the weather in much of the country is cold and miserable for 1/2 of the year. While the scenic portions of California offer the views and some states have little but flat farm land.
The attraction of the Movie industry will draw millions.
And Frankly California having the 5th largest economy in the world if it was a separate country. Meaning there is massive wealth in that state that no other state approaches.
High taxes? Sure, nothing of value comes cheaply. If low taxes are your goal, Arkansas, Mississippi, North Dakota, etc. should attract you.
It's interesting that the vast majority of states attracting former Californians are attracting members of the same political party.
When you factor in the residents of that state that are moving to California. Each state is increasing their lopsided party representation.
The Truly sad part is that states admitting former Californians even with the same party affiliation are doing so unwillingly. As if simply living where their vote is a minority somehow contaminants them.
One thing you guys are leaving out is standard of living. Comparing the amount of money between the rich and poor doesn't tell you anything about the lives of the poor. The poor have luxeries never dreamed of in previous generations. Most importantly, they have opportunity. Now more than ever.
If we were to redistribute all of the money in the US equally, the economy would crash. Many people would stop working, and the cost of goods would skyrocket. When the dust settles- those of us that survive would end up right back were we started. Those with skills of higher value will end up back at the top, those without will end up back at the bottom. Our future is not Star Trek, it's The Expanse. There will be lots of competition for the jobs that still exist, but large numbers of people will live off some form of basic assistance. There will be too many people with too few jobs that need to be done. I tell my kids they need to study robotics and automation because many of the jobs of today will be gone, replaced by machines.
RX Reven' said:
In reply to CrustyRedXpress :
There's always exceptions but generally speaking, I think most people make a concerted effort to pay the least amount of tax possible. For example, a full sized moving van costs $4,000 to go from California to Texas but only $800 to make the return trip because there are a lot more people moving away from taxes than moving towards taxes.
Additionally, there's the consumption side of the equation...I recently let my pool guy go because he wanted $120 to clean my filter. I need to gross $160 to net $120 and that $120 (assuming he has the same 25% effective tax rate) only nets him $90 after he pays his taxes.
What should be a nice symbiotic relationship (I do mathy things and he does pooly things) gets spoiled with the government siphoning off 43.75% of the money from a simple two-party transaction (160 X 0.75 X 0.75 = 90).
I don't know anything about pool maintenance. I know lawn mowing. It costs me $45 a week to have someone else take care of my lawn. $180 a month.
I owned a reliable Honda riding mower and trimmers etc. and could mow the lawn and trim it in less than an hour. I am paying more than 2 hours of my income ( after taxes 3) to have it done for me.
It's not an indulgence, it's insurance. The stats of dying while mowing a lawn make the wager worth the cost to me.
The same logic plows my driveway in the winter.
In reply to frenchyd :
In reply to RX Reven' :
Yet population in California is still growing. The population will continue to grow while the weather in much of the country is cold and miserable for 1/2 of the year. While the scenic portions of California offer the views and some states have little but flat farm land.
The attraction of the Movie industry will draw millions.
And Frankly California having the 5th largest economy in the world if it was a separate country. Meaning there is massive wealth in that state that no other state approaches.
High taxes? Sure, nothing of value comes cheaply. If low taxes are your goal, Arkansas, Mississippi, North Dakota, etc. should attract you.
It's interesting that the vast majority of states attracting former Californians are attracting members of the same political party.
When you factor in the residents of that state that are moving to California. Each state is increasing their lopsided party representation.
The Truly sad part is that states admitting former Californians even with the same party affiliation are doing so unwillingly. As if simply living where their vote is a minority somehow contaminants them.
California is not growing. We just lost seats in the house due to the decline. The movie industry is slowly leaving. Sure the wealthy can afford it, but even they often leave when it's time to retire. Or when their employer leaves for a more tax friendly state. The homeless population is growing, so there is that. For the rest of us, nice weather and views only go so far. People from both parties are leaving CA, changing the demographics of neighboring states. Which are none too pleased, as they see many pushing for the same policies that ruined the state they fled.
In reply to RX Reven' :
There's always exceptions but generally speaking, I think most people make a concerted effort to pay the least amount of tax possible. For example, a full sized moving van costs $4,000 to go from California to Texas but only $800 to make the return trip because there are a lot more people moving away from taxes than moving towards taxes.
Additionally, there's the consumption side of the equation...I recently let my pool guy go because he wanted $120 to clean my filter. I need to gross $160 to net $120 and that $120 (assuming he has the same 25% effective tax rate) only nets him $90 after he pays his taxes.
What should be a nice symbiotic relationship (I do mathy things and he does pooly things) gets spoiled with the government siphoning off 43.75% of the money from a simple two-party transaction (160 X 0.75 X 0.75 = 90).
What really drives me nuts is that the cut the government takes can be much larger than what the actual business makes. I don't think most people realize how small the net profit margin is for most businesses. Sales tax alone in CA is 8-10%. Not including all of the other taxes a business (their customers) pays. Here is a list of average net margins for many business types. Few come close to what CA takes straight off the top in sales tax alone.
- Advertising: 3.30%
- Apparel: 5.87%
- Auto and truck: 3.04%
- Auto parts: 3.05%
- Beverage (alcoholic): 7.94%
- Beverage (soft): 18.50%
- Brokerage and investment banking: 17.62%
- Building materials: 4.30%
- Business and consumer services: 3.83%
- Computer services: 4.34%
- Drugs (pharmaceutical): 18.38%
- Education: 9.59%
- Electronics (consumer and office): -3.14%
- Electronics (general): 5.70%
- Engineering and construction: 1.00%
- Entertainment: 11.73%
- Farming and agriculture: 2.47%
- Financial services (non-bank and insurance): 26.94%
- Furniture and home furnishings: 5.15%
- Healthcare products: 9.27%
- Household products: 4.73%
- Information services: 19.13%
- Insurance (general): 6.26%
- Investments and asset management: 21.06%
- Office equipment and services: 4.91%
- Publishing and newspapers: -1.64%
- REIT: 15.17%
- Real estate (development): 6.65%
- Real estate (general and diversified): 19.75%
- Real estate (operations and services): 3.59%
- Recreation: 1.15%
- Restaurants and dining: 10.57%
- Retail (general): 2.44%
- Retail (grocery and food): 1.44%
- Retail (online): 4.57%
- Shoe: 10.48%
- Software (entertainment): 20.53%
- Software (internet): 2.07%
- Software (system and application): 19.54%
- Transportation: 3.79%
Duke said:
AnthonyGS (Forum Supporter) said:
This problem isn't political. Both parties have been doing this for decades now.
The fact that both parties have been doing it != this problem isn't political.
At. All.
Yes, they rob us all financially while everyone is focused on divisive issues they don't actually care about. The only things both sides care about are wealth and power. United we can stop them (or at least slow them down a lot), but divided they will always win.
Odd, I share a definition and get called doom and gloom. No if I want to doom, I could show how we can't even unite on this forum for common cause, much less the entire country.
Boost_Crazy said:
Few come close to what CA takes straight off the top in sales tax alone
It's been a long week but I don't think taxes work like that. Sales tax is at point of sale, paid by the buyer, not the seller and does not effect profits at all. Even any fed/state/local tax will be on net profits and be a % on the % you just quoted as related to revenue. More profit, more tax, makes sense to me. If taxes sink your business, you probably have work to do or better off doing something else (close, modify business model, etc).
frenchyd said:
In reply to RX Reven' :
1. Yet population in California is still growing.
2. High taxes? Sure, nothing of value comes cheaply.
1. Our population is actually decreasing...we just lost seats in the house because of it.
PPIC - March 28th, 2022
2. I find that mindset disappointing. We're supposed to be "for the people and by the people" not "oh, look, we're politicians running a really desirable state, we can get away with robbing people blind to live here". California should be a relatively inexpensive state to run because of scale, population density, mild weather, etc. There is absolutely no excuse for our insanely high taxes:
Boost_Crazy said:
The movie industry is slowly leaving.
Chatsworth, CA used to be the pron capital of the world until Cal OSHA wrecked everything by forcing the actors to wear rain jackets. All the studios immediately packed up and moved to Arizona so still no rain jackets (nothing accomplished) but now I don't have the Vivid girls showing up to my favorite sports bar on Tuesday night to hang out while I play darts...I has a sad 
RX Reven' said:
Boost_Crazy said:
The movie industry is slowly leaving.
Chatsworth, CA used to be the pron capital of the world until OSHA wrecked everything by forcing the actors to wear a rain jackets. All the studios immediately packed up and moved to Arizona so still no rain jackets (nothing accomplished) but now I don't have the Vivid girls showing up to my favorite sports bar on Tuesday night to hang out while I play darts...I has a sad
I thought it never rained in Southern California. 
In reply to Snowdoggie (Forum Supporter) :
Nice!
I once flew a Co Op from Italy with me from Burbank to San Jose and I got pretty much everyone onboard the Southwest flight to sing "Do You Know the Way to San Jose". She was really shy "fresh out of college" and just couldn't believe what was happening "you Americans with your big peanut butter (I took her to Costco) and singing on the airplane".
Good times, good times.
RX Reven' said:
frenchyd said:
In reply to RX Reven' :
1. Yet population in California is still growing.
2. High taxes? Sure, nothing of value comes cheaply.
1. Our population is actually decreasing...we just lost seats in the house because of it.
PPIC - March 28th, 2022
2. I find that mindset disappointing. We're supposed to be "for the people and by the people" not "oh, look, we're politicians running a really desirable state, we can get away with robbing people blind to live here". California should be a relatively inexpensive state to run because of scale, population density, mild weather, etc. There is absolutely no excuse for our insanely high taxes:
Two things.
Googled California population and they report it as 39,538, 223. Up 6&1/2% since 2010 census.
Notice the states with the highest taxes also have the highest incomes? So a portion of my income goes to paying for the things that improve my state. I'm OK with that. Because my income has always been higher than people with similar jobs in poorer states.
In reply to frenchyd :
Are you suggesting some type of causality like the government somehow uses the high tax revenue to create high paying jobs?
California creates a lot of startups but once those businesses mature, they tend to leave the state.
I don't think the high income people have a problem with California. If they want to live in San Francisco, on the beach in Malibu or at Lake Tahoe they can afford it and they will pay more to live there. It's the middle class who are bailing out. Businesses are complaining that they can't find food service and retail workers and San Francisco and Lake Tahoe where people who take low paying jobs can't afford the rent. You have homeless people in San Francisco who don't have drug and alcohol problems, hold down two jobs, and still have to live in a tent. You have programmers living in trucks. It really is insane.
In reply to RX Reven' :
So corporations seek tax havens? OK, no news there. Ireland Switzerland and several Caribbean countries are used for tax dodges.
I guess it's legal. So just as soon as I form a billion dollar plus corporation I might take advantage of that.
We, both parties, fund our elections primarily from major donors. If you don't like that system, you have the power to effect change. Urge politicians to eliminate the legalized graft. Or don't vote for them.
No the government creates very few jobs and most of them tend to be lower paying but with solid benefits
. What the Government does is create a in demand environment for corporations. I hate it but sports teams, Opera, fine arts, good public facilities, all create demand.
Snowdoggie (Forum Supporter) said:
I don't think the high income people have a problem with California. If they want to live in San Francisco, on the beach in Malibu or at Lake Tahoe they can afford it and they will pay more to live there. It's the middle class who are bailing out. Businesses are complaining that they can't find food service and retail workers and San Francisco and Lake Tahoe where people who take low paying jobs can't afford the rent. You have homeless people in San Francisco who don't have drug and alcohol problems, hold down two jobs, and still have to live in a tent. You have programmers living in trucks. It really is insane.
Well said. I too was shocked at the fact that programmers and computer engineers with good jobs can't afford homes. Million dollar 3 bedroom 1500 sq ft ranch homes in the suburbs?
On one hand some of that demand is created by foreigners who consider those prices cheap. Some just by demand to live in California. Some by proposition 13 which makes living in retirement affordable for those who bought homes in the 1950's , 60's, 70's.
A major part of that labor shortage occurred when immigration was cut off. People do not understand that growth equals prosperity. China's wealth is due to its 1 billion 400 million population and with only 330 million America simply cannot be as productive. Thus we will fall further and further behind.
Want proof? Look at England. Our bigger population allowed us to rescue them in the past two world wars.
