“Now we know why CEOs didn’t want this data released,”

[barbos]

Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity, according to a new report published by Oxfam today to mark the annual meeting of political and business leaders in Davos.

Would it make a difference for you or these 3.6 billion if it were 100 people instead of 8?
It's meaningless metric designed to evoke certain reaction. It only means that there are (and always has been) billions of dirt poor people and these 8 have nothing to do with it.

 

[ZiprHead]

Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity, according to a new report published by Oxfam today to mark the annual meeting of political and business leaders in Davos.

Would it make a difference for you or these 3.6 billion if it were 100 people instead of 8?
It's meaningless metric designed to evoke certain reaction. It only means that there are (and always has been) billions of dirt poor people and these 8 have nothing to do with it.

The working poor work for those eight men. The labor of those poor people made those eight men what they are.

 

[barbos]

Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity, according to a new report published by Oxfam today to mark the annual meeting of political and business leaders in Davos.

Would it make a difference for you or these 3.6 billion if it were 100 people instead of 8?
It's meaningless metric designed to evoke certain reaction. It only means that there are (and always has been) billions of dirt poor people and these 8 have nothing to do with it.

The working poor work for those eight men. The labor of those poor people made those eight men what they are.

No they don't, these 3.6 billions are mostly in Africa/India and some in China.

 

[ZiprHead]

The working poor work for those eight men. The labor of those poor people made those eight men what they are.

No they don't, these 3.6 billions are mostly in Africa/India and some in China.

There's no working poor in Africa, India or China? Or are you speaking of aboriginal tribes-people and goat herders?

 

[barbos]

The working poor work for those eight men. The labor of those poor people made those eight men what they are.

No they don't, these 3.6 billions are mostly in Africa/India and some in China.

There's no working poor in Africa, India or China? Or are you speaking of aboriginal tribes-people and goat herders?

Of course there are working poor in Africa, it's just they don't work for these 8 people (directly on indirectly)
Also this "wealth" metric is bullshit to begin with. It basically measures material possession (money, stocks, house, car, flat TV , etc). So if someone lives in US and has no savings because he/she spends all his/her $1mil/year salary on hotels, rented Lamborghini and expensive restaurants then he/she has no wealth.

 

[Bomb#20]

Most millionaires do pay a higher tax rate than their secretaries. The reason Buffett doesn't is because he's so spectacularly good at recognizing and funding future winners that he's able to make a return on investment far in excess of the inflation rate. So the fact that the government refuses to index "cost basis" to inflation and insists on measuring purchase price and sales price in different-sized dollars, and thereby is able to tax investors on fictional imputed income, is of little consequence to Buffett. But a typical millionaire making an average return on investment is being taxed on his real investment income at a higher rate than his secretary's wages are taxed. If the government were honest, and indexed basis to inflation, and taxed the real gain as ordinary income, Buffett would get a massive tax hike and the average millionaire would get a tax cut.

Don't you think though that those tax rates are by design? They didn't happen in a vacuum. They were sought after by the investor class who bribed politicians with lots of huge donations to enact those tax rate schemes who then sold them as "trickle down" (Believe me. This time it will really work.).

This is not good for society and I can't understand how anyone can defend it the way you seem to be doing.

What the heck are you talking about? Federal spending is 21% of GDP. The nominal capital gains rate is 24%. 24 > 21. What grounds are there for saying capital gains are undertaxed? What, the 39.6% tax rate on high salaries? Those are even more overtaxed.

And that's ignoring inflation. Inflation over the last few decades has averaged about 3%. Average investors' capital gains are about 6%. That means the average rich investor is being taxed 24% on his actual capital gains and another 24% on capital gains the government pretends he makes, for a grand total tax rate of 48% on his actual wealth increase. If "the investor class" are bribing politicians for favorable treatment in the tax code, they don't appear to be very good at it.

As far as Buffett's special-case situation goes, it isn't the investor class that has been blocking a shift to indexing basis to inflation, which is what it would take to do away with Buffett's enormous tax advantage relative to the average investor. That's been blocked by politicians who like getting tax money to spend, and don't want to give up the tax on fictional gains. Clinton vetoed a bill to do that.

 

[Bomb#20]

Yes, I know very well what you meant. You meant to express your intuition that wealth is a zero-sum game and people getting rich is what causes other people to get poor. It's an intuition you share with much of the human race. It's an intuition born of millions of years of hunting and gathering. .

Hardy an ''intuition'' when the stats are there to support the proposition, that the super rich hold a quite sizable percentage of the worlds wealth and resources....stats that I have cited, stats that do not appear to be disputed (within reason).

Oh, for the love of god. You just repeat and repeat your conclusion, without ever attempting to justify your premise. What evidence do you have that wealth is a zero-sum game? What evidence do you have that if the super rich were poorer, this would cause the poor to be richer?

 

[Bomb#20]

I think that the problem here is that business leaders are often perceived as living off of the labors of their employees, especially employees who are not paid very much for their labors. Especially when one considers that some business leaders and their sycophants seem to think that everybody is grossly overpaid except those on top.

Bingo. The problem is perception. People understand their own part of the production process best, and consequently overrate what people like themselves do while underrating what people different from themselves do. Couple that with intuitive zero-sum-game reasoning fallacies, and you get everybody perceiving others but not themselves as "living off" somebody else. In fact everybody is "living off" everybody else, because production is synergistic. Each person helps make the other person more effective. The business leader gets more than he could without the workers; the workers get more than they could without the business leader. But economic creationists in the grip of a Pleistocene mindset that one more deer taken by "them" means one less in the woods for "us" to eat convince themselves that the fact that business leaders are "living off" their employees mathematically proves the employees are not simultaneously "living off" the leaders.

 

[ZiprHead]

I think that the problem here is that business leaders are often perceived as living off of the labors of their employees, especially employees who are not paid very much for their labors. Especially when one considers that some business leaders and their sycophants seem to think that everybody is grossly overpaid except those on top.

Bingo. The problem is perception. People understand their own part of the production process best, and consequently overrate what people like themselves do while underrating what people different from themselves do. Couple that with intuitive zero-sum-game reasoning fallacies, and you get everybody perceiving others but not themselves as "living off" somebody else. In fact everybody is "living off" everybody else, because production is synergistic. Each person helps make the other person more effective. The business leader gets more than he could without the workers; the workers get more than they could without the business leader. But economic creationists in the grip of a Pleistocene mindset that one more deer taken by "them" means one less in the woods for "us" to eat convince themselves that the fact that business leaders are "living off" their employees mathematically proves the employees are not simultaneously "living off" the leaders.

The ratio of CEO-to-worker pay has increased 1,000 percent since 1950, according to data from Bloomberg. Today Fortune 500 CEOs make 204 times regular workers on average, Bloomberg found. The ratio is up from 120-to-1 in 2000, 42-to-1 in 1980 and 20-to-1 in 1950.

https://www.huffingtonpost.com/2013/04/30/ceo-to-worker-pay-ratio_n_3184623.html

That's quite a big "perception", isn't it.

Even Fortune Magazine calls it "obscene".

 

[Loren Pechtel]

So, a question for Loren or Dismal (or anyone else who might be able to answer).

What would be the result if CEO pay (including stock options) were taxed at 90% above the $750k threshold? Would all the best of the best, like Steve Jobs or the Google founders start saying, "Hell I'm going to quit because this is too much stress and I want to do something a lot easier like picking cotton or flipping hamburgers?" Or would they simply ask their companies to give them stock (that had to be held 10 or more years) instead of compensation? And if that happened, would this be a bad thing for the shareholders?

And while were at it. What would be the result of taxing capital gains at standard labor income rates? Would the world fall apart? Or would people like Carl Ichan or Buffet simply become a little less rich? Lets say Buffet was only worth $20 billion instead of $50 billion. How would that hurt most of the rest of society?

Welcome to tax evasion city.

Same as happened last time when they were taxed at that sort of rate.

And a lot more who choose to retire sooner.

 

[Loren Pechtel]

Most millionaires do pay a higher tax rate than their secretaries. The reason Buffett doesn't is because he's so spectacularly good at recognizing and funding future winners that he's able to make a return on investment far in excess of the inflation rate. So the fact that the government refuses to index "cost basis" to inflation and insists on measuring purchase price and sales price in different-sized dollars, and thereby is able to tax investors on fictional imputed income, is of little consequence to Buffett. But a typical millionaire making an average return on investment is being taxed on his real investment income at a higher rate than his secretary's wages are taxed. If the government were honest, and indexed basis to inflation, and taxed the real gain as ordinary income, Buffett would get a massive tax hike and the average millionaire would get a tax cut.

Don't you think though that those tax rates are by design? They didn't happen in a vacuum. They were sought after by the investor class who bribed politicians with lots of huge donations to enact those tax rate schemes who then sold them as "trickle down" (Believe me. This time it will really work.).

This is not good for society and I can't understand how anyone can defend it the way you seem to be doing.

Bribed politicians? Why?

The current system is poorly design but on average fair with regard to capital gains vs ordinary income. Once you consider the effect of inflation the actual tax rate between capital gains and ordinary income is pretty close to even. (It's seriously unfair with regard to interest, however--that is taxed as income but also has the hidden tax of inflation.)

To fix this properly the tax rate should be the same but in constant dollars. This would be neutral for the average person, a big tax hike for those who have done very well in the stock market (note, however, that Buffet wouldn't see a huge tax hike because he doesn't sell his much. He's a pretty extreme buy-and-hold guy.) It would be a big tax cut to bond holders, however--something that I do not think is the best thing for society as we should be favoring equity financing over debt financing and fixing this would be the exact reverse.

 

[Loren Pechtel]

Just 8 men own same wealth as half the world
Published:
16 January 2017

Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity, according to a new report published by Oxfam today to mark the annual meeting of political and business leaders in Davos.

Oxfam is hardly an unbiased source.

As for this crap--what they're actually looking at is cumulative net worth. That 3.6 billion includes a lot with negative net worth that pull down the total. You would get a very different result if you only counted those whose net worth was not negative.

(And note that a negative net worth isn't inherently a big problem. It describes the average new college graduate. It also describes a lot of millennials and the like who spend what the make and have no substantial assets or debts, but do own a car they financed. Without a high down payment a car will have a substantial negative net worth for a while.)

 

[Loren Pechtel]

The ratio of CEO-to-worker pay has increased 1,000 percent since 1950, according to data from Bloomberg. Today Fortune 500 CEOs make 204 times regular workers on average, Bloomberg found. The ratio is up from 120-to-1 in 2000, 42-to-1 in 1980 and 20-to-1 in 1950.

https://www.huffingtonpost.com/2013/04/30/ceo-to-worker-pay-ratio_n_3184623.html

That's quite a big "perception", isn't it.

Even Fortune Magazine calls it "obscene".

A far better yardstick would be CEO pay ratio compared to company size.

Only that's harder to calculate and doesn't produce the dramatic headlines to manipulate people with.

(Hint: What we are really seeing is the effects of corporate consolidation. There are a lot more big corporations now.)

 

[ZiprHead]

The ratio of CEO-to-worker pay has increased 1,000 percent since 1950, according to data from Bloomberg. Today Fortune 500 CEOs make 204 times regular workers on average, Bloomberg found. The ratio is up from 120-to-1 in 2000, 42-to-1 in 1980 and 20-to-1 in 1950.

https://www.huffingtonpost.com/2013/04/30/ceo-to-worker-pay-ratio_n_3184623.html

That's quite a big "perception", isn't it.

Even Fortune Magazine calls it "obscene".

A far better yardstick would be CEO pay ratio compared to company size.

Only that's harder to calculate and doesn't produce the dramatic headlines to manipulate people with.

(Hint: What we are really seeing is the effects of corporate consolidation. There are a lot more big corporations now.)

Yes. Fortune is a known lefty anti-capitalist concern. They can't be doing it right.

 

[lpetrich]

You meant to express your intuition that wealth is a zero-sum game and people getting rich is what causes other people to get poor.

A red herring. Once wealth is created it must then be distributed. Pretending that that is a non-issue is not an argument. If produced wealth tends to go out of proportion to the top of the social heap, then such people will get very rich and everybody else will be very poor. That happens because production of wealth is generally a collective activity, and also because of many rich people's asset ownership.

People can also be poor from being left behind in economic development, and that does seem to explain a lot of poverty.

Most millionaires do pay a higher tax rate than their secretaries.

But how much do they actually pay? As one's income goes up, one's ability to shelter it does also. That explains why they all haven't gone broke.

 

[lpetrich]

Some people getting rich would not be bothersome if they did not seem to want to make everybody else very poor, as a lot of our society's elite seems to want.

Consider the financial community complaining that giving airline-company employees raises means "leftovers" for them. Also, that a fast-food company's paying its workers 33% of its income is intolerably high.

If "wage inflation" is an intolerable evil, then it should also be an intolerable evil for the top.

 

[DBT]

Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity, according to a new report published by Oxfam today to mark the annual meeting of political and business leaders in Davos.

Would it make a difference for you or these 3.6 billion if it were 100 people instead of 8?
It's meaningless metric designed to evoke certain reaction. It only means that there are (and always has been) billions of dirt poor people and these 8 have nothing to do with it.

If it was a significant percentage, it would make a difference. A hundred or a thousand is hardly a significant percentage....

 

[DBT]

Oxfam is hardly an unbiased source.

As for this crap--what they're actually looking at is cumulative net worth. That 3.6 billion includes a lot with negative net worth that pull down the total. You would get a very different result if you only counted those whose net worth was not negative.

Well, they do cite their sources and describe their methods, anyone can check if they wish. if there is something amiss with their work, it is open to questioning. It hardly matters if it is somewhat out because there are multiple studies from multiple sources to show that there is a huge problem with wealth distribution.

 

[barbos]

Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity, according to a new report published by Oxfam today to mark the annual meeting of political and business leaders in Davos.

Would it make a difference for you or these 3.6 billion if it were 100 people instead of 8?
It's meaningless metric designed to evoke certain reaction. It only means that there are (and always has been) billions of dirt poor people and these 8 have nothing to do with it.

If it was a significant percentage, it would make a difference. A hundred or a thousand is hardly a significant percentage....

So, you agree there is no difference between 8 and 100, hence metric is meaningless.
And as I explained before, wealth is not correct measure of anything anyway. You need to compare consumption, not amount of assets.

 

[DBT]

Oh, for the love of god. You just repeat and repeat your conclusion, without ever attempting to justify your premise. What evidence do you have that wealth is a zero-sum game? What evidence do you have that if the super rich were poorer, this would cause the poor to be richer?

I do repeat, but not my assumptions or my beliefs, I am merely providing quotes and links to studies that show that there is a huge divide between a small percentage of the worlds population and the rest of of us in terms of wealth.

The stats are not mine, the studies are not mine, they are the work of several different organizations.

As for saying the super rich being ''poorer,'' that is not the word to use. Even at a fraction of the wealth that the super rich currently enjoy, they would still remain rich, but the distribution of wealth would be fairer.