Is not most of the inequality in the USA _wealth_ inequality, not _income_ inequality?
Older people have more savings than younger people. The switch to 401K and away from defined benefit plans in the ‘80s exacerbated this. Add the baby boomer demographic bulge.
Entrepreneurs can have enormous paper fortunes tied up in their businesses. If…
Is not most of the inequality in the USA _wealth_ inequality, not _income_ inequality?
Older people have more savings than younger people. The switch to 401K and away from defined benefit plans in the ‘80s exacerbated this. Add the baby boomer demographic bulge.
Entrepreneurs can have enormous paper fortunes tied up in their businesses. If they sell too much they risk losing control. They do pay taxes on what they sell. Those businesses don’t generate much income, and often don’t pay their founders much of a salary.
Demagogues conflate the two.
I also wonder if old money families favor wealth taxes as a way to inhibit the creation of new fortunes. New fortunes are often built by disrupting existing businesses. Old money families are invested in existing, income generating businesses. This means that they could pay such taxes out of income and also protect themselves from disruption.
Seems to me that what really matters is consumption. Wealth is potential consumption, and if that wealth is tied up in illiquid assets, that potential could be quite difficult to realize. Income feeds wealth. Who cares about a low income if you have a large nest egg to draw on? What most likely matters to most people is what they can acquire and their confidence of being able to do so in the future.
I think that wealth inequality is higher relative to income inequality in Sweden than in the USA. See: Sweden for instance has reasonable income equality but very high wealth inequality. Many of the southern European nations are the opposite.
So which is it that matters? Is it income inequality that matters when you wish to praise Sweden over the United States, but wealth inequality that matters when you wish to argue for a wealth tax?
Is not most of the inequality in the USA _wealth_ inequality, not _income_ inequality?
Older people have more savings than younger people. The switch to 401K and away from defined benefit plans in the ‘80s exacerbated this. Add the baby boomer demographic bulge.
Entrepreneurs can have enormous paper fortunes tied up in their businesses. If they sell too much they risk losing control. They do pay taxes on what they sell. Those businesses don’t generate much income, and often don’t pay their founders much of a salary.
Demagogues conflate the two.
I also wonder if old money families favor wealth taxes as a way to inhibit the creation of new fortunes. New fortunes are often built by disrupting existing businesses. Old money families are invested in existing, income generating businesses. This means that they could pay such taxes out of income and also protect themselves from disruption.
Seems to me that what really matters is consumption. Wealth is potential consumption, and if that wealth is tied up in illiquid assets, that potential could be quite difficult to realize. Income feeds wealth. Who cares about a low income if you have a large nest egg to draw on? What most likely matters to most people is what they can acquire and their confidence of being able to do so in the future.
It might improve your comment to replace “acquire” in your last sentence with “consume”.
Maybe so. Read it as consume and see what you think.
I think that wealth inequality is higher relative to income inequality in Sweden than in the USA. See: Sweden for instance has reasonable income equality but very high wealth inequality. Many of the southern European nations are the opposite.
So which is it that matters? Is it income inequality that matters when you wish to praise Sweden over the United States, but wealth inequality that matters when you wish to argue for a wealth tax?