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The Almighty Buck Government Politics

Richest 2% Own Half the World's Wealth 1330

Posted by kdawson
from the disparity dept.
kop writes "The richest 2% of adults in the world own more than half of all household wealth, according to a new study by a United Nations research institute. Most previous studies of economic disparity have looked at income, whereas this one looks at wealth — assets minus debts. The survey is based on data for the year 2000. Many figures, especially for developing countries, have had to be estimated. Nonetheless, the authors say it is the most comprehensive study of personal wealth ever undertaken." The study itself is available from the World Institute for Development Economics Research.
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Richest 2% Own Half the World's Wealth

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  • by Anonymous Coward on Wednesday December 06, 2006 @08:54AM (#17127452)
    Look at the duck world. Scrooge McDuck had enough money that he could swim in it!
    • by TrisexualPuppy (976893) on Wednesday December 06, 2006 @09:01AM (#17127534)
      And the richest 2% pay 50% of the taxes.
      • Re: (Score:3, Informative)

        by diersing (679767)
        The numbers sound staggering, but the majority of the world's population are dirt poor (of course something should be done about that). If you live the west and don't believe me, enter your income here [globalrichlist.com] and find out for yourself.
        • Re: (Score:3, Insightful)

          by Anonymous Coward
          This site is full of s***. If you enter $250,000, it tells you "You are the 107,565 richest person in the world!" There is no way there are fewer than half a million people making that much in the United States alone.
        • by Bootvis (913169) on Wednesday December 06, 2006 @10:45AM (#17129028)
          This is odd:
          0.001 euro's and you get: You're in the TOP 68.98% richest people in the world!
          Now try 0 euro and the result is: You're in the TOP 68.98% richest people in the world!
          Amazing 31.02% procent of the world population has an income of less than nothing!
          It's the same for negative numbers.
          • by Johnny5000 (451029) on Wednesday December 06, 2006 @11:06AM (#17129488) Homepage Journal
            Amazing 31.02% procent of the world population has an income of less than nothing!

            You don't even need to read the article, but please at least RTFSummary:
            ". Most previous studies of economic disparity have looked at income, whereas this one looks at wealth -- assets minus debts. "

            It's not income, it's wealth.

            So apparently 31.02% of the population owe more than they have.
            I don't know about any other countries, but I know that's fairly common in the US, even among middle-class people with good standards of living.
        • by AliasTheRoot (171859) on Wednesday December 06, 2006 @11:27AM (#17129872)
          That site is bullshit, apparently my wages put me in the top 1% of people on this planet, but I cant afford to buy my own house, i'm constantly juggling money to pay for food and have the bailiffs around to chase on unpaid utility bills. Any simplistic measure of income is absolutely useless without correlating it to the actual cost of living.

          I have a job that puts me in the top percentile of people in the world, but to have that job I have to pay the top percentile of living expenses
      • by Lord Prox (521892) on Wednesday December 06, 2006 @09:41AM (#17127998) Homepage
        Not Quite. Here for more [allegromedia.com]
        The top 1% pay about 30% of all taxes
        The top 5% pay about 50% of all taxes
        and the top 50% pay about 98% of all taxes
        Tax breaks for the rich?! DUH only the rich can get 'em cause the botom 50% is getting the money.

        • Re: (Score:3, Insightful)

          by Rob Kaper (5960)
          And on top of that, the top 2% of the rich probably also fund the employment of half the world.
          • Or (Score:3, Insightful)

            by missing000 (602285)
            You could say 2% make most of their financial gains from the work of half of the rest of us.

            If you put it that way taxing them to a larger degree sounds almost fair, doesn't it?
        • by Big Nothing (229456) <big.nothing@bigger.com> on Wednesday December 06, 2006 @10:27AM (#17128682)
          "Tax breaks for the rich?! DUH only the rich can get 'em cause the botom 50% is getting the money."

          Another interpretation of the statistics would be that the bottom 50% aren't paying much taxes because.... they don't have any money to pay taxes with. But I like your logic better. Allow me therefore to paraphrase:

          Statistics show that the top 50% all die eventually.
          Consequently, the bottom 50% obviously live forever!

          This is A Conspiracy Against Rich People ®. THE GOVERNMENT MUST CUT TAXES FOR POOR, UNDERPRIVILEGED RICH PEOPLE!
        • by mapkinase (958129) on Wednesday December 06, 2006 @10:41AM (#17128940) Homepage Journal
          Am I the only noticing that 1% of the top earners own 40% of the wealth (as in one of the 5-rated comments) and 1% of the top tax payers pay only 30% of all taxes is kind of strange and suspicious?

          Does that mean that 1% of the richest are not quite the same as 1% of the top tax payers? What happened to the progressive tax system?
          • by CrimsonAvenger (580665) on Wednesday December 06, 2006 @11:46AM (#17130264)
            Am I the only noticing that 1% of the top earners own 40% of the wealth (as in one of the 5-rated comments) and 1% of the top tax payers pay only 30% of all taxes is kind of strange and suspicious?

            Does that mean that 1% of the richest are not quite the same as 1% of the top tax payers? What happened to the progressive tax system?

            It means exactly that. We tax based on INCOME, not WEALTH. If I have one TRILLION dollars in assets, but an income of only fifteen thousand a year, I pay no taxes. And that trillion is pretty much meaningless.

            So Bill Gates doesn't pay taxes based on what his Microsoft stock is worth, but rather on what Microsoft pays him (plus what he gets for selling any stock over and above what Microsoft pays him). In his case, wealth and income are totally disjoint.

            Once upon a time, the last time but a few (dozen) that we had a discussion that got around to taxes, I went to the IRS website to get their tax statistics. The "rich" (in terms of income, NOT wealth) pay a higher percentage of their income as taxes than the rest of us do. Not an astoundingly higher percentage, but higher. Which is as it should be - a flat tax is an inherently bad idea, just as an extremely progressive tax is a bad idea.

          • Re: (Score:3, Informative)

            by E++99 (880734)

            Am I the only noticing that 1% of the top earners own 40% of the wealth (as in one of the 5-rated comments) and 1% of the top tax payers pay only 30% of all taxes is kind of strange and suspicious?

            Does that mean that 1% of the richest are not quite the same as 1% of the top tax payers? What happened to the progressive tax system?

            Income tax systems taxes income, not wealth. The top 1% of earners presumably make A LOT less than 30% of the world's income. That said, a progressive tax system is immoral. Ever

  • by eldavojohn (898314) * <eldavojohn@gmFREEBSDail.com minus bsd> on Wednesday December 06, 2006 @08:54AM (#17127458) Journal
    An Italian by the name of Vilfredo Pareto once made the statement that 20% of the population will always own 80% of the wealth (also known as the 80/20 rule of thumb). From a site [newschool.edu] on him:
    In the Cours, his main economic contributions was his exposition of "Pareto's Law" of income distribution. He argued that in all countries and times, the distribution of income and wealth follows a regular logarithmic pattern that can be captured by the formula:

    log N = log A + m log x

    where where N is the number of income earners who receive incomes higher than x, and A and m are constants. Over the years, Pareto's Law has proved remarkably resilient in empirical studies.
    It's not necessarily a bad thing. It's only a bad thing when you need money in order to make money which is often the case. This translates to the rich getting richer while the poor get poorer. If you make sure that those with money don't influence the market so they make more money than Pareto law is actually good for the economy in my opinion
    • Re: (Score:3, Interesting)

      by Elvis77 (633162)
      Good for the economy, but bad for the 80% in my opinion... but then I can joke about it because I live in one of the wealthy countries mentioned, but I guess if I didn't I probably wouldn't be writing this
  • by ReidMaynard (161608) on Wednesday December 06, 2006 @08:55AM (#17127472) Homepage
    It's not an Onion story?
  • But... (Score:5, Insightful)

    by inviolet (797804) <slashdotNO@SPAMideasmatter.org> on Wednesday December 06, 2006 @08:58AM (#17127504) Journal

    ...just because an asset is owned by some over-rich guy, doesn't mean that it is unproductive. Tomorrow we could send Bill Gates the title deed to all farmland in the Midwest, and that land would still continue to grow wheat for everyone's Raisin Bran.

    And even if we then sent Bill Gates the profits from all those boxes of Raisin Bran, Bill would only have a pile of cash. Cash is not an asset; it represents assets, which usually remain in production somewhere.

    No matter how rich Bill Gates gets, he still consumes very little, perhaps a half-million dollars a year in food, real estate, clothing, maids, butlers, and the like. Everything else that he owns is (if he is an even half-wise investor) still producing something elsewhere.

  • by A beautiful mind (821714) on Wednesday December 06, 2006 @08:59AM (#17127516)
    between the current state and the feudal times.

    It is possibly very hard to create such comparison given that probably the definition of wealth changed, the definition of feudal times is loose, the overall human population was much less and the world used to be much more fragmented back then. I think that 500 years is a nice round number, so a comparison between 1500 and 2000 could be made with some difficulty. Hard, but I don't think it's impossible.

    Currently my gut feeling tells me that the "wealth" used to be even more centralized in those times, but we probably made some progress in social equality since then. I'd be interested to see in the amount of progress though.
    • by Carewolf (581105) on Wednesday December 06, 2006 @09:08AM (#17127622) Homepage
      Try comparing with 50 years ago instead of 500. Then we have not made progress, but taken many step backwards in social equality.
      • by ScentCone (795499) on Wednesday December 06, 2006 @09:45AM (#17128060)
        Try comparing with 50 years ago instead of 500. Then we have not made progress, but taken many step backwards in social equality.

        Really? By what measure? More people own their own homes. Unemployment is lower. Even lower income families have things that would have been considered utter luxuries 50 years ago (multiple televisions, cell phones, cable, cheap antibiotics, cheap fresh food of every imaginable kind, etc). What does "social equity" mean to you - that someone who is successful should not have a flatscreen TV until everyone does? Or that incredibly wealthy pro basketball players shouldn't be allowed to spend their cash until everyone can spend the same amount of cash?
    • by Noryungi (70322) on Wednesday December 06, 2006 @09:18AM (#17127726) Homepage Journal
      Remember the definition of "feudal": everything belongs to the local Lord. Meaning: your house only exists because he has let you build it (he can take it or destroy it at any time), the land you work and/or live on -- if you are a peasant -- is his, the grain and animals you grow and take care of are his as well, your physical power belongs to him -- for war (cannon fodder) and peace (let's add a new wing to ye olde castle) -- and he is allowed to kick your ass pretty much anytime he wants to.

      And, to top it all off, he has the right -- nay, the sacred duty -- to report you to the Holy Inquisition for heresy or just not being a good Christian, and woe to you if you actually criticize him. Situations were pretty much identical in, say, China under the Mandarins and during most of the history of the Moslem countries.

      Needless to say, the Middle Ages were not exactly equalitarian: thank the enlightnment for making things change, a little. So comparing, say, feudal Europe with modern-day Canada really is comparing Apples and Oranges.
      • by A beautiful mind (821714) on Wednesday December 06, 2006 @09:32AM (#17127876)
        So comparing, say, feudal Europe with modern-day Canada really is comparing Apples and Oranges.
        No it isn't. I know what feudal means, which still essentially says that the lords owned everything and the rest nothing much. See, you can then take the number of lords and the rest of the population and produce a percentage.

        Another poster made the critique that the wealth distribution doesn't take into account the scientific and social progress since then. Now that's talking about apples and oranges! Yes, I'm aware that those things have changed but they have no relevance here. (Unless you consider scientific knowledge wealth, which I do, but they are usually treated separately from traditional wealth because it is much harder to put into numbers, etc.) What I would be interested in is the change of wealth distribution over a long period of human history. I by no means am saying that the number produced would be indicative of progress as the other poster seems to think. It would be just interesting to see, so you know, you can have another datapoint to put current numbers and trends into context.
        • Re: (Score:3, Informative)

          by ScentCone (795499)
          What I would be interested in is the change of wealth distribution over a long period of human history.

          But that's where such conversations always go wrong. The pie isn't always the same size - it grows through production. We aren't just changing the way the economic pie is distributed, we're producing more pie. And, as you alluded to, we're also putting things like Penicillan into the mouths of dying babies for less than a hamburger costs - and someone from 500 years ago would have considered themselves
      • by tehanu (682528) on Wednesday December 06, 2006 @10:33AM (#17128784)
        Not in China. Peasants were free, and owned their own land which they could buy and sell as they pleased. It was also common for farmers to run their own small business in addition to farmer, most commonly selling the cloth that the farmer's wife weaved.

        Another thing in China helped redistribute wealth. While in most places the eldest son inherited everything, in China, the property was divided equally amongst all the sons. This meant that "rich" families often became "ordinary" over a few generations unless they can produce one or two men of great ability every generation or so. In fact, this custom was deliberated introduced by the Chinese emperors to reduce the chance of feudalism.
  • What's worse (Score:4, Insightful)

    by Moby Cock (771358) on Wednesday December 06, 2006 @09:00AM (#17127524) Homepage
    While it is pretty awful that 2% own 50%. The study reveals that 1% of the population owns 40% of the weatlth. Also the poorest 50% own 1% of the wealth.

    More tax cuts for the rich!!!
    • Re:What's worse (Score:5, Interesting)

      by argStyopa (232550) on Wednesday December 06, 2006 @09:52AM (#17128142) Journal
      Logic check.

      What's better for a group of a million people?
      Each of them get +$5, or one of them gets $5 million?

      If the "one" is an entrepreneur or small businessman, he can likely parlay that $5 million into a significant investment to grow his business, and probably result in at least 5-6 PERMANENT jobs with an annual salary/value of $30k-$40k per year. That additional workforce could allow him to grow his business further, possibly snowballing into more jobs, more business, etc. This ALSO means more tax revenue for the local government, more $ for schools, playgrounds, streets, fire depts, etc.

      This is called growth, and it's a good thing for a community.

      Does it help everyone equally? NO, and that's why it's so offensive to the leftish /. crowd. But it's net benefit (and sustainably so) for the whole community, far, far more than the $5 would help ANYONE.

      Is it possible that the $5 mill goes to some indolent rich person who wastes it? Sure (and this is pretty much what the /. crowd believes of all "rich" people...it's not like they ever work for it, right?), it's POSSIBLE. But where does he waste it? Cars, luxury items, food, drugs - all of which again benefit (to a lesser degree) local businesses.
  • If it's legal (Score:4, Insightful)

    by Threni (635302) on Wednesday December 06, 2006 @09:06AM (#17127596)
    then it must be fair. Well, either that, or bad laws can be passed.

    Still, as long as the issue is `do I cough up for a PS3 or is the Wii good enough` and not `why do millions of people die from easily and cheaply preventable/treatable diseases/issues such as malnutrition, malaria and sleeping sickness` I don't see things changing.

    You still think the `war on terror` is important? Perhaps if the number of deaths on 9/11 we repeated in every country, every day, otherwise no - statistically, not really. And yet, look at the ratio of money spent on that futile little endeavor to money spent on issues that affect millions daily.
  • by nelsonal (549144) on Wednesday December 06, 2006 @09:08AM (#17127606) Journal
    The top 1% only required wealth of $500,000 which a USer making $40,000 annually should easily eclipse with a 5% 401(k) contribution (assuming you have an employer match) and an 8% return. I'd guess that almost all of the college graduates here are above the 10% level (don't forget the value of cars, computers, clothes, any retirement accounts and such).
  • So what? (Score:3, Informative)

    by kspiteri (599317) on Wednesday December 06, 2006 @09:08AM (#17127612) Homepage
    Inequality and Risk [paulgraham.com]
    Mind the Gap [paulgraham.com]
  • How unfair! (Score:5, Interesting)

    by rlp (11898) on Wednesday December 06, 2006 @09:08AM (#17127614)
    For the good of humanity we must take all that wealth and re-distribute it equitably! But before we do, we might want to check out some countries that have tried that. The results aren't pretty (for example Zimbabwe).

    Seriously, the wealthy of the world can be divided into kleptocrats, heirs, and entrepreneurs. As far as I'm concerned, you can shoot the former. Certainly not the second, though you may debate the merits of inheritance tax (which I'm personally against). Mess with the third at the peril of your nations well being.
  • Like (Score:5, Funny)

    by styryx (952942) on Wednesday December 06, 2006 @09:09AM (#17127628)
    Hippy: "Like, you can't OWN property, man!"

    Prof. Farnsworth: "I can. But that's because I'm not a penniless hippy!"
  • by erroneus (253617) on Wednesday December 06, 2006 @09:20AM (#17127738) Homepage
    As I once learned a bit about the development of Japanese culture, the fact that they live on an island with very few natural resources that world considers to be useful or otherwise valuable, much of their cultural values developed around an appreciation for other things which I find not only admirable, but inspiring as well.

    In my own life, I have learned to divest myself of debt financing and to save and survive with more focus on needs and less on wants. I definitely pay a lot less attention to pop culture marketting. Having grown up very poor as a child does make the adjustment easier and somewhat more natural for me, but I am definitely not an unhappy person.

    Among the things that no longer hold any direct personal value for me are things like diamonds, gold or other things that do not directly enrich my life in any meaningful way. In short, I value the practical and all but ignore the impractical, useless shiny things in life. I doubt I'll see the world's culture shift in this direction within my lifetime, but if we were to simply stop valuing many of the things we currently value, much of the world's wealth would simply lose value.
  • by Oz0ne (13272) on Wednesday December 06, 2006 @09:29AM (#17127844) Homepage
    This is to be expected. People work disproportionately as well. High intelligence is distributed in a very similar curve.

    The real reason that it seems to be getting more and more exaggerated is because the overall wealth/economy of the nation has continued to grow. This means that more people are able to afford to survive, to get health care, to be in a place where they can fill out these census instead of working their arses off or just trying to stay warm. Think back to the 1900s, or even late 1800s. People that were just scraping by would often not even survive. But really that's all besides the point.

    Who cares if we have ridiculously rich people? What does it matter? It doesn't stop you from achieving your goals, you have to work to get there and earn your way the same. Just because there are enormously wealthy people doesn't mean you're prevented from acquiring wealth yourself. in fact, it makes you all the more likely to be able to get rich. These people if they want to stay wealthy, or grow their funds, must use it in some way. Maybe just earning interest in a bank, maybe investing in startup companies. Either way that money becomes a tool banks/companies can use to generate more wealth, and you can get in on that.

    Quit being so classist. Just because others have done well doesn't mean you can't, but you surely can't if all you do is gripe about how you deserve more money without doing anything to earn it.
    • Re: (Score:3, Insightful)

      by kahei (466208)
      Article:
      The richest 2% of adults in the world own more than half of all household wealth,

      Parent:
      because the overall wealth/economy of the nation has continued to grow

      Trailer-park libertarian, huh?

      Just because there are enormously wealthy people doesn't mean you're prevented from acquiring wealth yourself.

      Yeah, thought so. In the real world, one of the major uses of wealth is to concentrate and control further wealth. To put it bluntly, that means preventing YOU from getting it.

      Quit being so classist.

      It's
      • Re: (Score:3, Insightful)

        by Oz0ne (13272)
        I am a libertarian, but far from the trailer park. That is near where I started though. I've made a life for myself and am now wealthy. Through my own efforts.

        Coming up from next to nothing and achieving so much, I really fail to see what all this garbage about wealth distribution and "ruling class" is.
    • Re: (Score:3, Informative)

      by StrawberryFrog (67065)
      It doesn't stop you from achieving your goals, you have to work to get there and earn your way the same. ... gripe about how you deserve more money without doing anything to earn it.

      Barbara Ehrenreich called bullshit [nickelanddimed.net]on this attitude. [henryholt.com]
    • by j_f_chamblee (253315) on Wednesday December 06, 2006 @12:25PM (#17130990) Homepage Journal
      It is hard to know where to begin in replying to this post, so I guess we'll just start with the top:

      This is to be expected. People work disproportionately as well. High intelligence is distributed in a very similar curve.

      So, you are assuming that wealth is distributed along some merit based system based on hard work and brains? So, how do explain the railroad moguls who built their fortunes by exploiting immigrant Chinese labor, and forcing small farmers off their land with hired guns and goon squads? How about the textile families who forced women, immigrants, and children to work 10 - 15 hours a day, six days a week for most of the late 19th and early 20th century? How about the British colonial officials who were carried around on litters to supervise the production of Indian tea?

      Looking at the other side of the coin, how do explain Paris Hilton? Are trying to tell me that she sits where she is because she is brilliant and hard-working?

      All this boils down to a fundamentally flawed assumption on your part about great wealth is accumulated. It doesn't happen through hard work. It happens when capital is amassed and then reinvested in the generation of yet more capital. In other words, a cycle of accumulation that can work even if the owner of the wealth doesn't do anything but raise himself up off the couch long enough to say "I pay you to make money, so you better go get more, or I will not pay you again." Since the distribution of wealth has been uneven since before the renaissance, hard work need have little to do with it.

      Think back to the 1900s, or even late 1800s. People that were just scraping by would often not even survive.

      Ok, it is true that in the 18th and 19th century it was even harder to get wealthy (or just get by) then it is today. However, in the 1940s through 1970s, there was a general reduction in the disparity between rich and poor. It was at this time that many fortunes were made in manufacturing, oil exploration, housing, and other war time and post-war activities. But taxes were much higher and the distribution of wealth today is more like it was in the 1900s, when it was very difficult to get rich when, then it is like the mid-20th century, when there was more socio-economic mobility. Uneven wealth distribution and social mobility are inversely proportional, my friend.

      Just because there are enormously wealthy people doesn't mean you're prevented from acquiring wealth yourself. in fact, it makes you all the more likely to be able to get rich.

      Here you make the assumption that everyone aspires to be a multi-billionaire. That seems flawed, as well. Many judeo-christian and non-western moral teachings warn of the dangers associated with accumulating great fortunes. There are many wealthy people who are perfectly decent folks, but, to paraphrase comedian Chris Rock, in many cases, it is true that "behind every great fortune lies a great crime."

      Quit being so classist. Just because others have done well doesn't mean you can't, but you surely can't if all you do is gripe about how you deserve more money without doing anything to earn it.

      Tell me again who's being classist here? Your argument basically affirms socio-economic distinctions - the differences between the rich and poor (also known as classes) - as part of the natural social and moral order. If any argument is "classist," it would be yours.

      And by the way, speaking of people who gripe about deserving more money without doing anything to earn it, may I refer you again to Paris Hilton?

      I've never been 100% certain whether tremendous wealth has positive or negative social consequences, but at least I have some kind of notion of reality.
  • by clickety6 (141178) on Wednesday December 06, 2006 @09:30AM (#17127854)
    ...who bought all the PS3s!

  • Missing econ theory? (Score:3, Interesting)

    by Wylfing (144940) <brian&wylfing,net> on Wednesday December 06, 2006 @09:37AM (#17127946) Homepage Journal

    I might be exposing my ignorance on the subject (I have had hardly any economics education), but it seems to me that there should be something we can do as a pre-emptive release valve for wealth maldistribution. We start out with a relative imbalance, but not too much, say 70/30. This imbalance is not due to unfair advantage. It's just because some people are a more [industrious|clever|capable] than others [1].

    The "problem" starts when the accumulation of assets among the more-capable accelerates, a phenomenon that I believe is due to the selfish exploitation of systems. (This is quite probably an evolutionary strategy, so it may not go away soon.) This, of course, is precisely what Marx was on about, and his prediction is that the imbalance will grow to the point that the have-nots will rise up in arms and simply take back what was taken from them (i.e., the release valve is opened). I think history has shown this to be fairly accurate, the French, American, and Russian revolutions being three recent examples.

    So accepting that this is the inevitable result of accelerating imbalance, an intelligent course of action would be the invention of an economic mechanism that effectively bleeds wealth back to the proletariat, thereby providing release and staving off revolution. This should make sense to the wealthy as well! A stable system in which they are assured their wealth ought to be better than a short-term system that will lead to their heads being cut off.

    Even though there are some mechanisms like this already (e.g., progressive taxation), they are apparently not effective. What's the blockage here? Why can't this be figured out? I am enough of a cynic to think that the main blockage is the arrogant belief of the wealthy that they can suppress revolution indefinitely. However, has there been any good mechanism proposed to address this issue?

    [1] cf. Beggars in Spain [amazon.com] for a good treatment of the economic responsibility of the more-capable viz. the less-capable.

  • by Baldrson (78598) * on Wednesday December 06, 2006 @11:03AM (#17129438) Homepage Journal
    If you google "net asset tax" [google.com] you'll see my 1992 white paper near the top.

    "The rich get richer" is basically a result of something sometimes called the "risk free asset" by modern portfolio theory [wikipedia.org] aka "risk free rate of return" -- generally the interest rate the government pays to borrow money. In classical economics its called "economic rent" or "Ricardian rent" (after the classical economist Ricardo). It results from systemic growth in the economy -- growth that increases the value of assets that do not increase with increasing demand, such as land. If you shove more people onto the Earth, you get higher land prices but you don't get more land. (BTW: This is the real reason guys like Gates, Bush and Kennedy are for immigration liberalization.) In a natural setting, this corrects itself through die-offs and/or fighting over the land -- or whatever the monopoly at issue happens to be (it could be a monopoly on, say, the right to make copies of an operating system that everyone happens to have standardized on, which is what made the present day's richest man). Governments protect wealth holders from this natural redistribution by taxing things to pay for police, courts, military, and other things that protect nonsubsistence property rights. When this service is paid for by taxing things other than those property rights, you have a subsidy of nonsubsistence property rights.

    If you don't tax away all monopoly profits and redistribute it evenly to everyone, then you end up with a class of people who have an incentive to load up the economy with more people, whether through immigration or birth rates, in order to increase the demand for their property. This class can be the private owners of the monopolized rental properties or it can be public officials that reserve to themselves and their special interests the economic rent derived from taxation.

    Think of it as signal processing where you don't subtract out the DC component of the signal before integrating. You end up overflowing your accumulators and losing the information you were trying to extract.

    The only exception you might make is for intellectual property representing genuine invention of technological utility, and subsistence property rights since people will generally fight to the death to retain their subsistence.

    That's why "the money quote" from my white paper says:

    The government should tax net assets, in excess of levels typically protected under personal bankruptcy, at a rate equal to the rate of interest on the national debt, thereby eliminating other forms of taxation. Creator-owned intellectual property should be exempt.

    The levels typically protected by personal bankruptcy can be approximated by the median price of housing an individual added to the median capitalization of a job in the economy. Together, these exemptions add up to between $50,000 and $100,000. Additional but smaller exemptions may be added to represent the lower levels of bankruptcy protection typically extended to children within families.

    The NAT is a self-adjusting system that seeks an equilibrium between government debt levels, current tax rates and private wealth distribution, without attempting to achieve an outright balanced budget or direct intervention in the economy.

    Under current (1992) asset distribution and government debt the NAT would generate between $1 trillion and $1.5 trillion in revenue, thus totally displacing other forms of taxation. ...
    only assets whose existence is legally recorded in titles, insurance documents, etc., or that are currently reported for capital gains and losses would be individually assessed. Since most households own few major assets changing little from year to year, the NAT would greatly simplify tax computation.

    and

    With the exception of basic functions o

  • by cfulmer (3166) on Wednesday December 06, 2006 @11:35AM (#17130042) Homepage Journal
    Beware the erroneous implication -- that because wealth is concentrated, the people at the bottom are in worse shape than they were when wealth is not so concentrated.

    Consider the graduating class of a typical suburban high school as a closed system (ie ignore everybody not in that class). When they graduate, their individual wealths are usually pretty similar since they have very little in their own name. Now, fast forward 20 years -- some of those people will have been extremely successful, some moderately successful, and some will just be getting by. The relative wealth among the graduates has become skewed, yet each is generally better off than they were upon graduation.

    If the pie keeps growing, we don't need to be as concerned with getting a smaller portion of it. In fact, there's a good argument that concentrations of wealth actually help the pie to grow -- when finding a cure for a disease may cost a billion dollars, you need people who have that sort of money and who are willing to put it at risk.

It is not every question that deserves an answer. -- Publilius Syrus

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