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Thread: Should there be a personal asset cap?

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    Prehistoric Bitchslapper Sarahfeena's avatar
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    Default Should there be a personal asset cap?

    Some folks think that individuals should not be allowed to own assets over a certain amount, to prevent wealth from accumulating in the hands of a few.

    I'm not in favor of it, but I was wondering if anyone else here is. And if so, what should the cap be? I have heard $1M, but I don't think that's at all workable, as middle-class houses will cost you half of that in a lot of places. What is an amount that would work?

    Any thoughts?

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    Elen síla lumenn' omentielvo What Exit?'s avatar
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    It seems like a silly and outdated belief these days. Also the $1 million is clearly very low or are they not allowing for or are they excepting retirement?

    I don't think there is an amount that works. There would be dozens of dodges. Far more money would go offshore into holdings, Swiss bank accounts and real estate. It would probably do a huge amount of damage to the economy.

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    The Queen Zuul's avatar
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    Quote Originally posted by What Exit? View post
    There would be dozens of dodges. Far more money would go offshore into holdings, Swiss bank accounts and real estate. It would probably do a huge amount of damage to the economy.
    I agree. It seems like it would cause more damage than anything else, as people found ways around it. There's no way you can really cap someone's personal wealth, as there will always be ways to avoid having it counted as personal or to simply keep that wealth outside the country with those laws.

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    For whom nothing is written. Oliveloaf's avatar
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    I hate this idea.
    "I won't kill for money, and I won't marry for it. Other than that, I'm open to just about anything."

    -Jim Rockford

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    Prehistoric Bitchslapper Sarahfeena's avatar
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    Quote Originally posted by What Exit? View post
    It seems like a silly and outdated belief these days. Also the $1 million is clearly very low or are they not allowing for or are they excepting retirement?
    Well, I think the idea is that we wouldn't save for our own retirement. Which...no thanks.

    I don't think there is an amount that works. There would be dozens of dodges. Far more money would go offshore into holdings, Swiss bank accounts and real estate. It would probably do a huge amount of damage to the economy.
    This would be one of my biggest fears. Even more so, that it would kill entrepreneurship and cause more reliance on the government (which, as I say, it's perhaps meant to encourage that).

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    Elen síla lumenn' omentielvo What Exit?'s avatar
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    It is a very old and truly socialist idea. It would clearly end up meaning government ownership of industry as no one could afford to own more than a small business. I guess mid-size companies might be able to be collectively owned but that rarely works well in the real world either. How would actually large industry with economies of scale exist? We would fail to compete with any nation not following such policies.

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    A Dude Peeta Mellark's avatar
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    Quote Originally posted by Sarahfeena View post
    Even more so, that it would kill entrepreneurship and cause more reliance on the government (which, as I say, it's perhaps meant to encourage that).
    Government reliance can work in some instances, but I don't think this sort of reliance would ever work in America as our country is now. There is a culture that's accepting of high taxes and many socialized services? Okay, that works. There's a culture that is violently opposed to high taxation and enshrines personal responsibility and independence? It's not going to work. If you were in a society where success wasn't considered an individual accomplishment worthy of reward but a goal for the betterment of the society in general, this kind of cap might work. Maybe.

    But good luck with that.

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    Capitalism and government would work better if we capped personal assets at, say, 20 million per person. Doing so would make moot a huge pile of legislation and bureaucracy. The regressive nature of a national sales tax would be offset by the cap. Bye, bye income tax and corporate tax. The incentive to get rich would remain, maintaining the incentive of individuals to start businesses. Corporations would become more democratic since a greater portion of employees would have a significant share of voting rights. With a greater portion of employees having greater say in corporations, the rational for the additional bureaucracy of labor unions would become moot. You can certainly come up with legitimate problems with this idea. But take one extra moment to add an example as to how this might reduce the size of government and improve economic justice simultaneously....and then go back to trashing this idea, if you must.

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    Prehistoric Bitchslapper Sarahfeena's avatar
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    Explain this to me a bit more, please? Are you saying that along with the cap, we would eliminate the income and corporate tax, and add a national sales tax to replace it? Why would this be part of your plan? And why would a greater portion of corporate employees have a significant share of voting rights?

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    I do propose eliminating personal income tax and most corporate taxes. They would be replaced with a federal sales tax which most people argue is regressive. I agree that sales taxes are regressive, but the adverse attribute would be offset, to a degree, by the fact that there would be the asset cap. Since some of the profits would no longer go to the richest, they would go to others who would begin to buy more stock in the companies where they work. With greater and more distributed shareholder voting rights, they could lobby for those policies/benefits that would normally be fought for using unions.

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    Elen síla lumenn' omentielvo What Exit?'s avatar
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    Assets would just be moved off shore. This would never work in the real world.

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    Oliphaunt The Original An Gadaí's avatar
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    Hey I'm about as leftwing as this board gets and I think it's a stupid idea, mostly for the reasons already touched on above.

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    I agree that there are significant problems with the idea. There are many more problems that I might add arguing against myself. That would be easy. But bad ideas sometime get people thinking about the problem to develop ones that might be good. When you call someone 'stupid' they shut up and no one has the opportunity to do the hard work that the problems we face demand. So, first, show me you can see my side of this well enough to offer some arguments in favor and then come up with more arguments against.

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    Prehistoric Bitchslapper Sarahfeena's avatar
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    Probably the biggest problem with the idea is that it's a serious violation of individual liberty. But even if you wanted to do it, it does seem like it would be difficult to enforce.

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    Here are the significant arguments mentioned so far, in my view:

    1. "There would be dozens of dodges. Far more money would go offshore into holdings, ..."
    2. "...mid-size companies might be able to be collectively owned but that rarely works well in the real world either. How would actually large industry with economies of scale exist?"

    I have some ideas that might mitigate these to some extent, but it is not easy to be convincing, I'll admit.

    I do not agree with the argument that the idea is a violation of individual liberty: How much liberty does someone loose if their billion dollars is reduced to $20 million? I would say little or none. Consider the amount of liberty that would result for children if a half billion or so was spent on their education? Our capitalist system has fine attributes, but it is not perfect. Rich folks could not attain so much ‘liberty’ without the rest of the population funneling it to them. I don’t think that a funnel was what the founding fathers had in mind. I wish I could state my thoughts a little better, but I am short on time. Thanks for considering my arguments. I will try hard to listen well to your ideas and try to see the issues as you see them.

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    Member Elendil's Heir's avatar
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    It is a terrible, terrible idea IMHO. One of the great engines of modern capitalism - which I'll agree isn't perfect, but which has made more people prosperous and created a higher standard of living than any other system in all of recorded history - is the individual ambition of people to better themselves and to earn more, up to and including the possibility of becoming millionaires or even billionaires. As long as they obey the law, including tax laws, all should be able to strive to earn as much as they wish.

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    Prehistoric Bitchslapper Sarahfeena's avatar
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    And that's where the individual liberty part comes in, exactly, Elendil's Heir. I don't believe it's right to tell someone there's a limit to what they can achieve in life, regardless of how they want to measure it. If they measure it in dollars, then that's their prerogative.

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    Is liberty limitless? Or does demanding excessive liberty for a few affect the access to modest liberty for others?

    Is it reasonable to include the matter of justice when considering liberty?

    Does the free market demand unlimited wealth to drive it and, if so, is that moral? (The middle class is eroding, you know.)

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    Is liberty limitless? Or does demanding excessive liberty for a few affect the access to modest liberty for others?

    Is it reasonable to include the matter of justice when considering liberty?

    Does the free market demand unlimited wealth to drive it and, if so, is that moral? (The middle class is eroding, you know.)

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    Elen síla lumenn' omentielvo What Exit?'s avatar
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    I do have some serious concerns about the gap between the truly wealthy and the average American. The Middle Class is not shrinking as much as just drifting towards the lower end of Middle Class. The classic manufacturing Union style Middle Class is diminished but overall I not sure I accept the Middle Class is smaller then it was in the 70s, 80s or 90s once currently high unemployment is factored into the numbers. Clearly CEOs and other top earners have managed to ratchet their income to levels completely out of what was standard for America or traditional Capitalism. I can see a lot more regulations put in place on bonuses having to actually be in measure to performance and not just a contractual obligation. I am in favor of the not renewing the Bush tax cuts for the top 2%. This would go a long way to close the current budget gap by itself. Somehow the tax structure worked fine in the 90s which economically was one of the best periods in our history. I don't believe the tax rate like the one in the 60s and 70s was damaging to our economic system.

    However 20 million is fairly low for asset totals. I not sure I can really see a workable system for an asset cap. If you could suggest how this could actually work I would love a chance to debate the merits with you.

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    I don't know why my post displayed twice, but let me add this: My goal is increased liberty and justice, less government , 'freer' enterprise, greater efficiency in government and business, and two more days per year NOT doing income taxes. (I hate doing taxes. It takes me at least two days each year to do them.) I am a product designer. I am required to think out-of-the-box to bring unique, new products to market. We need to do the same with our society or it will go the way of Rome. I am not an economist. If there are any economists reading this, I am sure that you can challenge me and perhaps you can offer other ways to achieve what I think are admirable goals. If we just parrot what we keep hearing from the left and the right, we will not meet the challenges. New ideas, please. Don't just keep telling me why it won't work.

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    Thanks for the thoughtful reply, What Exit?. I will reply, but it may be a few days. My near-term schedule is totally booked as of right now.

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    Elen síla lumenn' omentielvo What Exit?'s avatar
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    Honestly I am not sure we need new ideas. Our system works well when not abused. It got abused in the past decade. A balanced budget will work down the debt slowly. Lower and smarter military spending is a huge area. Efficiencies in the entitlement will help. A huge one and I mean a huge one is the corporate welfare. End the subsidies to King Corn, Coal and Oil especially. Put money into new tech, not old tech.
    I am in favor of the current movement to bring government workers into line with commercial workers as far as salaries and especially benefits though I think Wisconsin and Ohio are going to far the other direction. Most of us acknowledge that our health care system is broken and hideously inefficient. A real plan to move us off the chaotic system we have had and to a true universal health care system with help the economy, help business, especially small businesses that are the drivers of new innovation and job growth quite often and help the people of America. Off-Shoring, who really thinks this is a good idea during a recession? Seriously, some things are just blatant abuses of our system by the mega-corps.

    I think the current system can work once we subtract the stupidities.

    Oh, a pet peeve, legalize drugs and tax like cigarette and liquor. We save money on prisons, raise money by taxes and decrease crime and violence not just in the US but around the world.

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    Member Elendil's Heir's avatar
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    All good points, What Exit.

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    I think What Exit makes many very, very good points with respect to specific policies, especially agriculture and drugs. I do, however, strongly disagree with the first one suggesting we don't need new ideas. As a product designer, I disagree. As a citizen of a country that thrives on new ideas, I disagree. But most of all, there is the totality of a long and nuanced discussion that leads me to the conclusion that we will soon look like societies in dysfunctional countries unless we make more significant changes than What Exit proposes is adequate. Changing the subject a little, I would recommend reading "The Fortunate Ones" in the 2011 April edition of the Atlantic Monthly. I tend to ramble and I would like to present my reasoning after I have a little more time to organize my ideas. Also, as I mentioned earlier, taxes are an 'issue' for me and that is what I 'should' be doing at this very moment. But I can't end this without asking this: What if economic justice had been addressed before the recent heath care overhaul? Would the framework of the legislation look the same as it does today?

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    Chapter 1 (The most important one.)

    For many folks, there is always a measure of fear when criticizing Capitalism. I guess they are afraid that this God’s disciples will become angry. The first argument made when proposing the cap is that without Greed, Capitalism is nothing. Actually, the cap merely changes the capital ‘G’ to a small ‘g’. I believe that the realm of economics is polytheistic and that capitalism can play nice with the other gods. If not, and we continue to use the capital ‘G’, there is our quiet God that will continue to wonder where we are. This is what is in my heart. This is what matters the most.

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    Oliphaunt dread pirate jimbo's avatar
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    The last time so much of the world's wealth was focussed in the hands of so few people was in 1929 and it precipitated the Wall Street collapse and the Great Depression. Fortunately, in the last few years, with even more of the world's wealth in the hands of even fewer people, we have avoided a massive economic collapse.

    Oh wait...

    If someone could explain to me how Bill Gates being worth $52 billion benefits anyone other than Bill Gates (and his immediate family, I suppose), I would love to hear it. I firmly believe there is a point after which people should be cut off from accumulating more and more wealth -- $1 billion is probably the right number currently. At that point, it is essentially impossible to spend your money faster than you earn it, making the supposed motivation to earn more irrelevant. The notion that not being permitted to earn beyond a billion dollars would demotivate individuals from growing their businesses is ludicrous. And history has proved that focussing all the wealth into the hands of a very few ultra-rich does nothing except destabilize the economy, in much the same way that a lack of diversity in your stock portfolio is a recipe for failure.

    Putting a cap on wealth would be a very good idea economically, which would have great benefit for the 95% of the population who are not spectacularly rich and which would affect that top 5% in ways too insignificant to be worth discussing. Now, how we get a plan for this sort of thing done, I could not begin to suggest. The system currently in place is far too well intrenched, the capitalists at the top of the food chain are far too powerful, and the peons all the way down the line have generally been so well indoctrinated in the notion that free-market capitalism in its current form is good and anything else is evil socialism that they are fully committed to a system that keeps them beaten down and vulnerable to the whims of the powerful.

    P.S. For the record, I consider myself to be well to the right end of the political spectrum, at least in relation to other people in my country.

    P.P.S. For all it's socialist leanings, my country's economy is WAY more stable right now than that of the nation to our south which holds itself up as the model of laissez-faire economics. Just sayin'

    Hell is other people.

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    Elen síla lumenn' omentielvo What Exit?'s avatar
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    When you start talking a billion as the asset cap, I'm a lot more willing to listen. But again, just undoing the silly Bush tax cut for the rich would close a large part of the current deficit. Keeping to a hard schedule of getting out of Iraq, Afghanistan and oh by the way, Korea would be a big savings. And again, ending corporate welfare for old industries. We don't need to prop up corn and oil, really we don't.

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    Oliphaunt featherlou's avatar
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    Not only do I support a cap on how much an individual is worth (in monetary terms), but I also support no inheriting money or assets - when you die, your balance goes to zero. That right there would do a lot to free up a whole bunch of "old" money. I too don't really see any ways of implementing either a reasonable money cap or preventing inheritance - the people who don't want these things have all the power.

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    Elen síla lumenn' omentielvo What Exit?'s avatar
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    That sound terrible, you work all your life and you can't leave stuff to your kids. Now to spite the rich your spiting the not rich too.

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    Oliphaunt featherlou's avatar
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    But that's a natural step for a country that believes in pulling yourself up by your own bootstraps - the kids didn't earn it - it isn't theirs.

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    Member Elendil's Heir's avatar
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    I remember in my Wills & Trust course in law school that the Bolshevik government in Russia abolished inheritances and wills after the revolution... but reinstituted them a few years later because of popular outcry, and because they decided that it was socially beneficial for people to be able to leave something for their spouses and offspring.

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    Elen síla lumenn' omentielvo What Exit?'s avatar
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    Quote Originally posted by featherlou View post
    But that's a natural step for a country that believes in pulling yourself up by your own bootstraps - the kids didn't earn it - it isn't theirs.
    It is part of the process of saving money though so that you can have a comfortable retirement and something left over for the kids or grandkids. Again I can see an escalating inheritance tax as being fair. Most people are thinking in terms of thousands to maybe hundred of thousands, not tens of millions to billions.

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    Be creative: Forget about how likely such a thing is and give speculative ideas about how this proposal might reduce the size of government, improve free markets, while increasing economic justice. Also, speculate how this might be implemented. Maybe a ten-year transition with assessment periods? Speculate. Be creative. Ignore folks who are quick to criticize.

    ( I don't expect my next chapter to be ready for, at least, a couple of weeks.)

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    Administrator CatInASuit's avatar
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    The one thing several of the superrich have been good for is acts of philanthropy. They can throw a huge amount of money at a problem that no-one would normally go near because it is just not worth it. See the Bill Gates Foundation looking to wipe out malaria. If there was an asset cap, that kind of action would never happen.

    By all means, tax the rich more than the ordinary worker and I have no problems with an inheritance tax to help put some of that money back into the country. But by putting an asset cap on people, you will remove the drive to be the best you can, unless you make the asset cap so large as to be worthless.
    In the land of the blind, the one-arm man is king.

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    Do all of the studies agree that it is money that drives people to be the best that they can? Consider:

    http://changingminds.org/explanation...motivation.htm


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    An interesting article about philanthropy:

    http://abcnews.go.com/2020/story?id=2682730&page=1

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    Oliphaunt featherlou's avatar
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    Quote Originally posted by CatInASuit View post
    The one thing several of the superrich have been good for is acts of philanthropy. They can throw a huge amount of money at a problem that no-one would normally go near because it is just not worth it. See the Bill Gates Foundation looking to wipe out malaria. If there was an asset cap, that kind of action would never happen.<snip>
    But maybe if you spread the wealth around better, you'd decrease the gap between the rich and the poor and malaria would become less of an issue for millions of people.
    Last edited by featherlou; 17 Mar 2011 at 09:59 PM.

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    Administrator CatInASuit's avatar
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    Quote Originally posted by featherlou View post
    But maybe if you spread the wealth around better, you'd decrease the gap between the rich and the poor and malaria would become less of an issue for millions of people.
    Or why not go the whole hog and spread all the money around equally. Totally eliminate poverty at this point, because everyone will be equally rich or poor. But at that point you take away an incentive for people to try and improve their lot in life, because if they do well, it will be taken away from them, if they do badly, they will be given more to keep up with everyone else.

    Also, I doubt it will stop malaria being an issue.
    In the land of the blind, the one-arm man is king.

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    Did you see this, CatInASuit?


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    Quote Originally posted by pg3t View post
    Did you see this, CatInASuit?

    That's quite an interesting piece, and has a lot of good sense in, with certainly enough examples to at least go along with his points.

    However, it only covers what motivates people to do better. A personal asset tax is something that demotivates people as it not only removes money from them, and puts the issue of finance back on the table, but it also takes away purpose and mastery from their lives.
    In the land of the blind, the one-arm man is king.

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    Prehistoric Bitchslapper Sarahfeena's avatar
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    Quote Originally posted by CatInASuit View post
    Quote Originally posted by featherlou View post
    But maybe if you spread the wealth around better, you'd decrease the gap between the rich and the poor and malaria would become less of an issue for millions of people.
    Or why not go the whole hog and spread all the money around equally. Totally eliminate poverty at this point, because everyone will be equally rich or poor. But at that point you take away an incentive for people to try and improve their lot in life, because if they do well, it will be taken away from them, if they do badly, they will be given more to keep up with everyone else.

    Also, I doubt it will stop malaria being an issue.
    That's the thing...if there's going to be money to spread around, it has to be made in the first place. If you take away incentives, who will make it?

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    Prehistoric Bitchslapper Sarahfeena's avatar
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    Quote Originally posted by CatInASuit View post
    Quote Originally posted by featherlou View post
    But maybe if you spread the wealth around better, you'd decrease the gap between the rich and the poor and malaria would become less of an issue for millions of people.
    Or why not go the whole hog and spread all the money around equally. Totally eliminate poverty at this point, because everyone will be equally rich or poor. But at that point you take away an incentive for people to try and improve their lot in life, because if they do well, it will be taken away from them, if they do badly, they will be given more to keep up with everyone else.

    Also, I doubt it will stop malaria being an issue.
    That's the thing...if there's going to be money to spread around, it has to be made in the first place. If you take away incentives, who will make it?

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    For most people (>99%), I would contend that an asset cap at $20,000,000 to, what, maybe $1,000,000,000 (?) might be enough incentive. Don't make it too high. All the zeros will give me repetitive stress disorder.

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    Firstly, if you are going to set the asset cap at a stupidly artifically high limit, what is the point in having the cap in the first place.

    Secondly, how are you going to change this limit with the effect of inflation. 100 years ago, that amount of money was pretty much unthinkable, nowadays people have a good grasp of what it means. Who is not to say in 50 years, there will be a lot of billionaires and we are looking at the first trillionaires?
    In the land of the blind, the one-arm man is king.

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    "...how are you going to change this limit..."

    Give this some further thought. Are there other capital values that need to be adjusted for inflation on a daily basis. Economics professionals would have no trouble establishing a basis for periodic adjustments. (This is probably one of the easiest problems setting a cap.)

    It is your turn, CatInASuit: Try to see this from my point of view and offer an idea as to how a cap might benefit us that has not been mentioned, thus far. (I don't mean to suggest that you agree that there should be a cap. I am simply interested in how good you are in trying to see things from another persons point of view.)

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    Oliphaunt dread pirate jimbo's avatar
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    Quote Originally posted by CatInASuit View post
    The one thing several of the superrich have been good for is acts of philanthropy. They can throw a huge amount of money at a problem that no-one would normally go near because it is just not worth it. See the Bill Gates Foundation looking to wipe out malaria. If there was an asset cap, that kind of action would never happen.

    By all means, tax the rich more than the ordinary worker and I have no problems with an inheritance tax to help put some of that money back into the country. But by putting an asset cap on people, you will remove the drive to be the best you can, unless you make the asset cap so large as to be worthless.
    If an asset cap were put in place, one of the potential consequnces would be further motivating the super-rich to engage in more, and more creative, acts of philanthropy to disburse those assets as they see fit before the government has a chance to step in and start doing with it as they judge best (and I think we can all agre that letting the government decide what to do with all that money is probably a bad idea). If, for example, Bill Gates was informed that he would be knocked back to $1 billion in assets, that would mean he has (according to Forbes) $54 billion to liquidate -- that's a potential $54 billion investment into malaria research, or a billion dollars injected into 54 different organizations. There are plenty of options available that simply do not happen in the current system, any of which would improve the state of affairs for a ton of people.

    As to the notion of demotivation, that's stupid. There are currently 1,210 billionaires on the planet -- if they all got cut back to just one billion in assets, they would all still be inconceivably rich, with no possibility of running out of money, and there would still be thousands, if not tens of thousands, of people behind them clamouring for the opportunity to reach the magic ceiling. For those of us who are not so spectacularly wealthy that there is no chance of going broke, the motivation to succeed will always be intrinsic to our work lives; for those who are that rich, money is really no motivation at all, since the accumulation of wealth at that point is practically meaningless.

    Quote Originally posted by CatInASuit View post
    Or why not go the whole hog and spread all the money around equally. Totally eliminate poverty at this point, because everyone will be equally rich or poor. But at that point you take away an incentive for people to try and improve their lot in life, because if they do well, it will be taken away from them, if they do badly, they will be given more to keep up with everyone else.
    This is hardly a debate of the merits of pure Marxism and to suggest such a thing is silly. Having said that, if Mr. Gates decided to give $9 to every man, woman, and child on the planet to disburse his assets in excess of $1 billion (that's roughly what it averages out to), it would likely mean very little to most people in the first world, but could buy a week's (or a month's?) worth of food -- or perhaps a prescription for malaria meds -- for someone living in poverty in the third world. If he decided to keep things withoin his own nation and disbursed that $54 billion only to Americans, it would put $180,000 into every person's pocket -- how much of a game changer would that be for how many people who no longer have to worry about housing, health care, or where their next meal is coming from? And Gates would still be a frickin' billionaire!

    Quote Originally posted by CatInASuit View post
    Firstly, if you are going to set the asset cap at a stupidly artifically high limit, what is the point in having the cap in the first place.

    Secondly, how are you going to change this limit with the effect of inflation. 100 years ago, that amount of money was pretty much unthinkable, nowadays people have a good grasp of what it means. Who is not to say in 50 years, there will be a lot of billionaires and we are looking at the first trillionaires?
    As I noted above, Forbes lists 1,210 billionaires on the planet. Just the top 15 combined are worth more than half a trillion dollars ($529.6 billion, if I've done the addition correctly). Clawing back assets from those 1,210 people, to set the upper limit at the "stupidly artificially high" level of a billion would inject hundreds of billions of dollars (probably well over a trillion) into the global economy. I would say that that is the point, even given that this would "negatively" affect such a tiny piece of the population and profoundly improve the lives of so many.

    As to the issue of inflation, well, obviously the cap number would have to be re-evaluated from time-to-time, maybe every decade or so, to ensure that the uber-rich were not being too hard done by by having to live within such meager means. Although I wouldn't expect such a high limit to shift very frequently at all.

  48. #48
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    Quote Originally posted by CatInASuit View post
    Firstly, if you are going to set the asset cap at a stupidly artifically high limit, what is the point in having the cap in the first place.<snip>
    I'll turn that question around; why does anyone need more money than they can possibly spend in their lifetime, so much money that they can't even spend the interest on their money? How many gold-plated yachts does one person need?

    I know it goes against our western ideals to even think about taking away what someone else has earned, but I'm not talking about taking away money from middle-class people that they're using to pay their mortgages and feed themselves; I'm talking about taking away the useless, purposeless money that's accumulating to the handful of extremely rich people on the globe and circulating it back into general pools so that it can be of use to more people who actually need it.

    ETA: Another point; putting into law something like a cap after your first billion dollars would affect only a handful of people on the planet, but returning that money to the general pools could possibly positively affect billions of people. Imagine a dictator of an African country who is forced to give back some of the money he's stolen from his grindingly-poor people some day.
    Last edited by featherlou; 18 Mar 2011 at 10:20 PM.

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    Ok, then, let's try it from your side. Let's set an asset cap that will have real effect but still at a level where a person with that amount of asset can live without ever having to work again.

    What happens if we set the marker at $10million USD.

    You can live on that quite happily without ever having to work again. If careful, it can generate more money than you can live off and it's certainly well above the amount of money that an "ordinary" person would earn but it would affect a lot of people who would have this useless money floating around.

    Now let's spread all that money around to everyone. Congrats everyone else in the rest of world you each get a $50k USD payoff. (arbitrary number chosen, I doubt its accurate)

    So what's going to happen. Well those people who just had all their money removed are likely to stop working. I mean what is the point if anything further they earn is going to be taken away. Next, you have just pumped a lot of money into the economy and people will spend it. Say hello to several years of inflation as the world economies try to sort themselves out.

    Following that, anything very expensive will be sold off, no more mansions or ferraris for the superrich. Those assets are worth well over $10M USD and so will be reclaimed by the state to parcel out. But how do you parcel out a $50M USD mansion?

    Hollywood would be in for a shock. All those A-list films stars earning $10M USD a film, that's gone. what about business, any of the major chiefs of business who earn several million a year, will stop working after 4-5 years once they have reached their limit.

    Is this a bad thing, well it would immediately cut the ratio between the lower paid and the higher paid. But with all the extra money flowing around, prices would shoot up.
    In the land of the blind, the one-arm man is king.

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    You just made many good and valid points, CatInASuit. This Cap idea has many difficult problems associated with it. Now answer yourself, please, by proposing ideas to mitigate the problems you have identified. Would it help to phase a Cap in over a decade or two? What else? Do keep in mind the you-tube video about how money does not incentivize people above the poverty level according to multiple studies, unless you disagree with the studies.

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