When do you consider someone "wealthy" or "rich"?

Discussion in 'Business & Economics' started by Seattle, Aug 8, 2019.

  1. Seattle Valued Senior Member

    Messages:
    5,328
    Everyone knows that Bill Gates and Jeff Bezos are rich.

    Many speak of increasing taxes on the wealthy or taxing assets differently or changing the rules of inheritance.

    At what level do you apply these ideas?

    Is it anyone who has more than you or is it only the super rich or is it someone who has twice the assets that you have?

    If there needs to be a change in how the "wealthy" are taxed, where exactly does this change need to start?
     
  2. Google AdSense Guest Advertisement



    to hide all adverts.
  3. billvon Valued Senior Member

    Messages:
    16,587
    To me:
    "Rich" is much more money than someone needs.
    "Wealthy" is self-sustaining wealth.

    But as to taxation - none of the proposals I've seen target wealth or net worth, but rather income. As for that, we could go back to 1951. By all measures that was a fairly prosperous time, and the much higher taxes back then did not unduly harm the economy. They ranged from 20% at the bottom end to 90% above $1.3 million a year (in 2018 dollars.) Given that, we could decrease them all by 20% and go from 0% at the bottom to 70% at the top.
     
  4. Google AdSense Guest Advertisement



    to hide all adverts.
  5. Seattle Valued Senior Member

    Messages:
    5,328
    Do you think the 50's were largely prosperous because the tax rates were high or was it feasible for the tax rates to be so high because of the unique situation after WWII?

    After all, taxes we reduced during the high inflation times of the 80's. The economy wasn't so good. High tax rates weren't making it any better. At that point in time the middle class felt like they were working hard, paying high taxes, and weren't getting anything from the government but they felt that everyone else was getting something (too much income for any benefits and too little income for tax loopholes).

    Regarding your definition of rich and wealthy, rich is more than you need? What do you need? You actually probably "need" very little so any more than that is "rich"?

    Wealthy is self-sustaining? So if someone has hundreds of millions but manages to spend/lose it all, they weren't wealthy? If someone has much, much less but is frugal and productive and manages to make that amount self-sustaining, they are wealthy but the first example isn't?
     
  6. Google AdSense Guest Advertisement



    to hide all adverts.
  7. billvon Valued Senior Member

    Messages:
    16,587
    Both. Some of the reason for that prosperity were tax based; the GI bill gave hundreds of thousands of returning soldiers the chance for a college education. Some of it was development of oil, which was not taxpayer funded. Some of it was American technological advances made possible by wartime research (also supported by taxes) making its way into the consumer market.
    They also weren't making it much worse. Taxation has a very weak effect on GDP.
    If you like.
    Correct. Wealthy isn't a number. If you have 10 million and blow it all on hookers and booze, then you're not wealthy. If you have 2 million and live your life so the interest carries you, then you are wealthy.
     
  8. wegs With brave wings, she flies . . . Valued Senior Member

    Messages:
    5,878
    It might seem like we're splitting hairs with the terms, because I've seen the words used interchangeably when referring to either rich or wealthy people. Maybe the main difference is that wealthy people know how to make money, whereas rich people ''have'' money. Rich people seem to be motivated by money and status, whereas wealthy people are motivated by their hopes, dreams, and making a difference in the world. Rich people tend to worry about money, but wealthy people have a different attitude about it. This is just my perception, anyway.
     
  9. billvon Valued Senior Member

    Messages:
    16,587
    Not a bad definition, and somewhat close to mine. Someone can hit the lottery and become rich, and then in three years be bankrupt. (And in fact this happens quite often, sadly.) Someone else can save up less than that guy, invest it wisely, live on the interest/income/appreciation - and be wealthy.
     
  10. Seattle Valued Senior Member

    Messages:
    5,328
    I guess I was using it the way I've seen it used here. Some people want to tax "the rich". Those are the "bad" guys.

    Please Register or Log in to view the hidden image!



    Below the "rich" are the merely wealthy.

    Please Register or Log in to view the hidden image!

    At a certain point, it seems that some people regard everyone as wealthy if they have more than they do. No one regards themselves as wealthy and needing to pay more taxes.

    If I'm able to save money I don't need it taxed at a higher rate. If you have more money than "me" then "we" need to tax it more highly "to be fair"

    Please Register or Log in to view the hidden image!



    It's easy to penalize that who are responsible and that's never a good thing. If any savings are taxed too highly then people just won't save especially if there are government safety nets for those who do not save.
     
  11. exchemist Valued Senior Member

    Messages:
    8,694
    It seems to me this notion of tax being a penalty to punish people for being rich is wrong and has a corrosive effect on social cohesion. Taxation in a representative democracy is , or ought to be, a recognition that wealthier people can afford to contribute more towards the undeniable cost of running a civilised society than poorer people. So you need some sort of sliding scale. Any person with a comfortable income should see his taxation in that light: as a civic duty.

    I find myself, as a baby boomer, becoming wealthy as a result of inheritance from my wife and my parents, too late in my life to make a great deal of use of it. And I only have one son to take care of. It is hard for me to deny that I could afford to pay a bit more tax. And in fact, looking at health and social care provision and considering my own age, it seems clear the country needs to raise more in tax for these things - not least so that I can call on these services in the years to come!

    As to how you set the sliding scale, rationally that has to be a way that most citizens see as reasonable and which does not remove the incentive to generate wealth through enterprise, or to save.

    Having said that, one of the curses of our age is the growth of telephone number salaries for those at the top of business. This is just greed, fuelled by the club of senior execs who all sit on one another’s remuneration committees. It’s a scandal of modern capitalism. There was no need in the past, even as recently as the 1970s, for top management to award themselves such stupendous, parasitical, pay levels, in order to have the incentive to put in the hours to grow a business. It is an example of a “broken market”, in which the normal forces of competition do not provide the restraints required. It seems to me this is an issue requiring shareholder action and possible government intervention, but I am not sure taxation is the best policy tool for dealing with it. So I would separate it from the taxation discussion.
     
    Seattle likes this.
  12. iceaura Valued Senior Member

    Messages:
    29,642
    Reagan's economic policy was nearly disastrous. Reagan himself was forced to reverse some of those tax cuts - and he didn't go far enough: the US public debt tripled, a hard recession hit, major parts of the financial system collapsed, and the economy never recovered its former trend toward greater prosperity overall.
    There are several proposals to tax net wealth. That will be necessary to restore the4 economy to a more functional balance of wealth - the huge increase in the percentage of wealth controlled by the few is choking the place, and threatening even the political system.
    The oil industry has always been government subsidized - not even counting the wars fought on its behalf.
    There's nothing personal involved in sound economic policy - and trying to make it personal, envy or whatever, is just more wingnut idiocy.
    The rich must be taxed enough to pay for government services, and prevent the otherwise inevitable accumulation of too much of the society's wealth by a small number of people (which wrecks the economy as well as the society).
     
    Last edited: Aug 8, 2019
  13. sculptor Valued Senior Member

    Messages:
    6,416
    Current best tax advantage self employed(sole proprietorship), partnership, llc, S corporation? Other?
     
  14. billvon Valued Senior Member

    Messages:
    16,587
    I don't think they are the "bad" guys. They are merely people who can pay a lot more in taxes without affecting their spending power.
    I know several people who see themselves that way.
    Few people want to pay taxes. Almost everyone wants the benefits that come from paying taxes. So there will always be unhappy people. It's the way of the world.
    Responsible for what?
    Which is why I am for income, not wealth, taxes. If you like, increase income taxes based on wealth _and_ income. But it's not really necessary. We've shown that this can be done with income tax alone.
     
  15. Seattle Valued Senior Member

    Messages:
    5,328
    For themselves.
     
  16. Seattle Valued Senior Member

    Messages:
    5,328
    I agree, I would add that a way to look at income tax (in general) is to not look at it as something of yours that the government is taking away but rather as the government's share in your ability to earn an income.

    Without the infrastructure of roads, electricity and water, safety, laws for property, public education, etc. you wouldn't have an income.
     
    sculptor likes this.
  17. billvon Valued Senior Member

    Messages:
    16,587
    Almost everyone is responsible for themselves. That shouldn't be a criteria for taxation.
     
  18. iceaura Valued Senior Member

    Messages:
    29,642
    After allowing the current level of wealth inequality ? Not shown.
    In historical examples of economies dug into a hole this deep, restorations of balance were products of plague, economic collapse, and war, not just income tax. That includes the US in the early 1900s.

    Without a war, epidemic, or crash, some kind of severe and onerous taxation levied on great wealth seems to be the only available remedy.

    But we are fortunate (and our predecessors wise enough) to have that remedy available. That is, after all, one of the great advantages of market capitalist economies - the owners of great wealth can be taxed, they are not governments or otherwise beyond the reach of power.

    In theory.

    Note that an estate or inheritance tax is one such - an available first step. Inherited wealth is the least defensible kind, being in conflict with capitalist market theory and socialist community wealth theory both, and serious taxation of it would be effective if slow - everybody dies sooner or later, so it could reduce the wealth inequality to less oppressive and harmful levels eventually. It might work, in other words - and that is not the common case.

    Another readily available and likely effective tax would be one levied on multiple residencies - making the third and fourth and seventh houses serious tax liabilities rather than shelters.

    Whatever we do, we need to quit digging this hole deeper: we don't want to end up needing something like the "land reform" necessary in post-colonial South and Central America - that's civil war. And that's where we are headed.
     
    Last edited: Aug 8, 2019
  19. Jeeves Valued Senior Member

    Messages:
    3,871
    A rich person is one who has an income more than ten times the average income of his society. If the peasants in your village earn $2 for a day's work and you get $22, you're a rich man in that village. Regardless of why or how you get the money; regardless of what you do or sell for it, that money gives you unparalleled advantages in that village. You have a better house than everyone else, which attracts more crime, but your less enviable neighbours contribute just as much to the police protection from which you benefit disproportionately. You have the only car in the village, yet you pay only as much as everyone else for the upkeep of the roads and bridges. The village elders defer to you, because they need your disproportionate support of the charities that keep the poorest alive. The small landowners grant you right of way, because they're afraid you'll buy up the water access, or grazing commons. You can afford to send your children to a better school than the local one, so they'll get a head start - as well as an inheritance.
    Wealth always carries privilege; it should carry a corresponding responsibility.
    The way it really works is: the less honestly the wealthy come by their privilege, the less they're willing to give back.
    So, they need a little push.
     
  20. RainbowSingularity Valued Senior Member

    Messages:
    4,421

    Rich people employ people with law degrees and advanced accounting qualifications to divide their income and assets up to make sure they do not get taxed.

    so your asking us to give tax avoidance advice to rich people.

    currently people with shares & stocks & those who buy & sell houses and businesses to make profit pay no tax or only around 2 to 5 % tax, while employees pay around 30% tax

    what is "fair" ?

    ?

    so tax loop-holes were made bigger by lobbyists ...

    the benefits for the sick, young, unemployed and military veterans has been cut back massively...

    the dot-com bubble crash wiped out middle class savings
    then the sub prime mortgage scam wiped out half of middle class retirements savings and threw thousands of family's including children out on to the street...

    benefits continued to be cut...

    government have allowed company's to send all their jobs off shore while keeping their American name like traitors.

    ...

    and all this can be fixed by not taxing the rich more and that somehow is the solution ?
    ...to suggest that personal wealth is to blame but not to blame ?(& its really your own fault because you could be worse off anyway)?

    who regulates the taxation laws ?
    the government
    who makes regulations ?
    the government
    who allows American company's to keep their made in America name while they pay 3rd world children slum wages to make their products then sell them at top end prices as American goods ?
    the Government

    who decided to give billions of working class poor health care and housing money to company's while people were thrown out of their houses on to the street with no health care ?
    the government !


    what is your question ?

    How much money did the American middle class choose to spend on the Cold war ?
    How much money did the American middle class choose to spend on the Korean war ?
    How much money did the American middle class chose to spend on the Vietnam war ?
    How much money did the American middle class choose to spend on the Iraq war ?(all 3 of them)

    who is doing the choosing and with whos money is it being chosen to do it with ?
     
    Last edited: Aug 9, 2019
  21. RainbowSingularity Valued Senior Member

    Messages:
    4,421
    ?
    all power & no accountability ?
    like a military dictator ?

    are you drinking and typing ?

    are you suggesting Hitler should not have faced charges of Genocide & other war crimes ?(theoretical considering he was never found)

    ... everyone was just following my orders, so its not my fault !
    stop complaining about the hotel
    some days you get food and you dont even have to pay for it... if your dead....

    agreed !
    you dont hear the rich business people complaining about the cost of police when they stop a riot from smashing up their business and homes.
    its propaganda
    it has just been domesticated and familiarized and divided into semi religious ideologies to normalize the idea of abandoning community members to starve to death on the street out of view or from lack of medical care etc...
    psychopathic propaganda
     
    Last edited: Aug 9, 2019
  22. billvon Valued Senior Member

    Messages:
    16,587
    We have shown that we were able to pay off the monumental debt we incurred during World War II with high levels of taxation on income.

    I am not in favor of social engineering via taxes. Taxes should be levied in a way so as to not damage the economy. Very progressive income taxes accomplish that.
     
  23. Seattle Valued Senior Member

    Messages:
    5,328
    Your comprehension skills are a little lacking. I didn't say that those responsible for wrong doing shouldn't be held accountable.

    I said that responsible citizens (ones who save money so that they aren't at the mercy of whatever the government does) shouldn't be paying the price of those who weren't responsible in their actions for themselves.

    If someone puts money into a mutual fund every month they aren't the ones who should be taxed higher because someone else didn't save every month. They shouldn't be lumped into the "rich" category just because they put some money into a mutual fund.
     

Share This Page