The wealth of the 1% just hit a record $44 trillion
The wealth of the 1% just hit a record $44 trillion
Economists say the rising stock market is giving an added boost to consumer spending through what is known as the "wealth effect."
Key Points
- The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter.
- All of the gains came from stock holdings thanks to an end-of-year rally.
- Economists say the rising stock market is giving an added boost to consumer spending through what is known as the “wealth effect.”
The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter, as an end-of-year stock rally lifted their portfolios, according to new data from the Federal Reserve.
The total net worth of the top 1%, defined by the Fed as those with wealth over $11 million, increased by $2 trillion in the fourth quarter. All of the gains came from their stock holdings. The value of corporate equities and mutual fund shares held by the top 1% surged to $19.7 trillion from $17.65 trillion the previous quarter.
While their real estate values went up slightly, the value of their privately held businesses declined, essentially canceling out all other gains outside of stocks.
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We just shouldn't allow individuals to have over a billion dollars, just 100% tax on anything over a billion when combined assets exceed that number. Both because there's no good reason for any one person to have that much money and because as pathetic as American campaign finance laws are it's a legit national security risk for someone to have that kind of money to throw at their pet causes.
I would lower that to $100 million. I don't think there's even a good reason for anyone to be that rich, but if we're going for a crazy upper limit...
Considering the price of certain goods, this is extremely low.
I would love to hear which "certain goods" are so expensive that one hundred million dollars is insufficient for a lifetime.
You gotta protect your fortune from inflation...
Let’s say cars such as McLaren F1 and Ferrari 250 GTO.
You mean cars built specifically for rich people that absolutely no one needs to own? Because you probably can't own an indoors swimming pool coated in 24 carat gold and the entire pool filled with water with gold flakes suspended in it for under $100 million either. Who gives a fuck?
Rich people can drive Toyotas and Chevys like everyone else. They could even afford a Porsche.
You're not making a very good argument.
So are you going to limit how plush or high tech cars can be OR limit the MSRP ?
Yes.
Also, if you are worth $100 million, you can literally afford the most expensive cars ever made and still be a multimillionaire.
Now, please explain why anyone in this world needs a $30 million car and why it would be a hardship for someone who would still have $70 million after buying it.
Because those cars bring new technology to the world.
They are vehicles for innovation.
They inspire people involved in making that car to be better at their jobs, to push the envelope.
Wealth does not trickle down, but technology does.
And if you want to put a legal limit on innovation and invention, thats an issue.
What innovation did that $30 million car bring to the world? Please explain specifically what technology trickled down.
And you still haven't explained why it would be a hardship for someone with $100 million to spend $30 million of it on a car. Please explain that too.
One off the top of my head, the passing material science down from race cars into production quantities (albeit low but then into bmw and benz, then into sport models etc.) benefits to average drivers. More specifically, brake pads. Thier effectiveness and durability are so much better than 30 years ago. save lives all the time, and everyone is driving much faster and braking later.
I never spoke up on individual wealth and/or income. Pro UBI in fact. But you still need to incentivize learning, innovation, and development somehow. And right now we use money for that mostly. Or stock options, crypto, etc. Drugs, sex, power, indulgences have also been used historically.
My thrust is that limiting intellectual advancement is stupid.
That would be a very much communist way of doing things. Do I need to explain why communism didn't work, doesn't work and won't work?
That isn't even remotely the same as communism. That is capitalism with an upper income limit.
You don't have some people earning $100 million a year and others making $25,000 a year under communism. That's only possible in a capitalist economic structure.
Your understanding of communism is on par with that of Joseph McCarthy.
Communism is everyone gets a Camry, Prius, Crown Victoria, F150, or Expedition. 3 years after you pay for it.
No it isn't.
Yes that is the literal textbook definition.
It creates literally same structure as socialism in my country (which btw attempted to reach communism). Paychecks were essentially set, so no one has an income higher than X, everyone had either žiguli, skoda, trabant or tatra car.
So whilst I agree that ultra rich people should be taxed more (or contribute to the solution of world problems more), setting a high limit may just affect the persons' possible achievements.
You actually think if people worth $100 million getting taxed at 100% above that $100 million equals socialism or communism? Really?
Either people have unlimited income or its communism?
Please stop commenting on politics if this is your level of education on the matter. Communism is absolutely not relevant here, because communism is
a socioeconomic order centered around common ownership of the means of production, distribution, and exchange that allocates products to everyone in the society based on need. A communist society would entail the absence of private property and social classes, and ultimately money and the state (or nation state).
You haven't even begun to understand if you think communism is related to this discussion.
I have mentioned what communism is in my other post. It is in accordance to your definition.
However, to get to communism, you firstly need socialism and this idea is very close to socialist practices that were present across the europe in the last century.
Even accepting the absurdity of suggesting those as "good reasons" to need more than $100 million dollars in a lifetime, fine. You buy both of those and "only" have 30 million dollars to live on for the rest of your life. That's still very comfortable and more than most people's lifetime earnings by an order of magnitude.
If your name is Rowan Atkinson you are going to need several of those McLarens...
But why should the person be limited? If they are capable of achieving that amount of wealth, why should we limit them to 100 million and give the rest to the government. I am not necessarily convinced the government would spend the money wiser...
Edit: Better approach would be to sanction certain useless activities they practice such as using a plane for 100 kilometers, etc.
I doubt the billionaire will spend that $100 Mil on altruistic endeavors.
Tax shelters, itemizable donations, kickbacks into campaign funds, etc i believe.
Actual large scale altruism? Nope.
Still better than many governments. Imagine this law was applied in Russia. All those millions would be used to fund the war against Ukraine.
Edit: Hence why I believe that rather than setting a limit, we should create a set of sanctions on certain actions these people make.
If you had a billion dollars and never earned a penny more, you would actually find it hard to spend it all before you die. It could probably fully support several generations of your family. I'm totally fine with saying, "Congratulations! You maxed out the money counter in the game of Life!"
We could give them a trophy and everything
I'd be quite content with 999 million dollars.
Buy your lottery tickets...
Aren't there some billion dollar super yachts out there? There's always a reason for the stupidity rich to claim they need more.
Ahh, boo hoo. I guess they'll need to take out a loan like the rest of us plebians.
Of course, repayment of loans for billionaires is entirely optional. Just raise the overdraft fees of the normies to compensate.
We used to have a super high tax rate on the wealthy (91%) in the past, but it got repealed.
Let your house representative know you'd like that to return.
Make it a million, with an M. Adjusted for inflation after inception, and including stock income. I've been saying it for years. Good luck convincing those in power who it would actually effect to enact it though.
It is possible to become a millionaire without exploiting others in the same way the 1% do. I would find a limit somewhere in the tens of millions more reasonable
That would be so communistic. I agree their taxes should be higher but definitely not 100%.
Fine, I'm willing to compromise, just so that you don't think I'm a radical or anything. Let's make it 99,99%.
That also won't work. Imagine someone has now 40 billion and this law comes into effect. Pretty much they would have to get rid of 39 billion. What would they do? Move it to their company and problem fixed. Instead of people having luxuries, you would end up with huge companies owning these.
"Raises just aren't in the budget". Yeah, because the guys at the top took it all.
There's an argument that any one person controlling that much money is harmful to everyone else. Above $1 billion what can you even spend the money on?
Private planes don't cost that much. Even a super yacht or the most expensive house in the world cost less. You can buy islands for less.
Once you have a billion dollars you can live off of 4% without touching the principal. You can just blow $40 million every year. No wonder billionaires think they can do anything. They can as long as they don't spend too much.
Edit: I calculated wrong. They can live off 6% to 9% every year, since they will have to spend all their extra money so it's not taxed 100% at the end of the year.
That's $60 - $90 million. Just wasting it every year and replenished by growth the next year. It's essentially risk-free, unless they pull an Elon and lose billions for no reason.
That spending would actually be really good for the economy. I like this idea better now.
I don’t necessarily see Elon's billions harm me. I see that limit can be limiting when the individual wants to buy, let's say, a company.
That’s why I see a hard limit like this wrong.
Far better approach would be to sanction shenanigans like private flights for 100 kilometers, uselessly huge yachts, etc. These luxuries actually make my life worse. They fuck up the air I breathe.
Society is harmed because these people can buy up news and TV companies, donate unlimited amounts to politicians, and generally fuck with the economy. No one can tell them what to do because they have so much money.
It seems like an aristocracy, which is very un-American. Once people run out of things to buy, how is their life affected by having more money? It essentially appoints them to a job they haven't earned.
There's no reason why Elon should run Twitter. He has no experience in Social Media. Imagine someone you work with just purchased their position and didn't have to interview or know anything about the field. Would you respect that person? Do you think they would do the job well? It would affect you, the company, and your customers negatively.
I get your point but that would be genuinely impossible to implement it.
Imagine you would have to know how to bake before being able to buy a flour. Monitoring what can/cannot people buy based on their profession does not make a lot of sense.
Also, the person didn't have to go through the interview process but he had to go through the process of earning that money.
Once you have over $100 million dollars, earning money is not a matter of skill. It's an inevitability. Compound interest will make sure you and your family are wealthy for generations, unless you pull an Elon.
What I'm telling you is many of these people are bad stewards of capital. Gilded Age robber barons sucked for many other reasons, but they at least understood their industry. Carnegie or JP Morgan would have slapped most of these nepo-babies across the face.
Imagine a sports team composed based on the amount of money people have. It would suck because people are not chosen based on skill. That's how we're choosing executive leadership in America right now, and it's honestly stupid.
Well yes, such a team would suck and they would loose all matches. Just like a company would collapse if a billionaire chose to run a business he has zero clue about.
But it’s his money. He would lose it and I think he should be free to lose his money. And that’s the beauty of free market. If you are cunning, you win and if you are an idiot, you loose.
So your point is, you think someone should be able to buy a successful enterprise that's important for society and run it into the ground? And you think that's an argument in favor of billionaires?
I'm saying the opposite. You should not be able to lose more than a billion dollars. Bets like that should rely on the judgment of many investors, hopefully people who have expertise in the industry.
We don't allow doctors or lawyers to practice without being educated and licensed. There need to be requirements for strategically important companies too.
Even as a someone with no experience, I can be accepted as a "lawyer" by a law company. But no would ever accept me because they it would harm the company very much.
Same thing applies for companies. There is already a motivation for their leaders to lead them in the best way possible even without limited maximum amount of money. In addition, there is no such a company that is so critical that its crash would destroy the world.
Where did that gap of the median 99%'s assets and the assets of the 1% come from? Could it have come from wages that could have been yours if excess profit was based on how much you contributed to the organization's productivity?
I quit working for the establishment and corporations about 8 years ago. No more.
Could you explain what communism is?
Basically a system where the society is classless there is common ownership of property.