How Paul Graham Gets It Wrong in “Economic Inequality”

Re:How Paul Graham Gets It Wrong in “Economic Inequality” by schmichael on Sunday January 03, 2016 @03:33PM (#10832204)

Problems with this:

1. "wage" is ambiguous to the point of useless given: executive compensation isn't solely in the form of salaries, a complex tax code, and wealth begets wealth (it's relatively easy to maintain wealth once you're able to reap more from safe investments than it takes you to live).

2. even if #1 could be solved with some complex formula, it's very easy to argue a maximum imposes a hard limit on how much work a person is willing to do. Elon Musk could surely easily hit the limit without all of his current ventures. What would be the incentive for him to continue to innovate once he's reached the limit?

3. estates are the extreme problem for 1 & 2: if they're counted against maximum wages than recipients of large estates likely have no incentive to ever work. If they're not counted then maximum wages are severely limited in its ability to affect change.

Perhaps a complex enough formula exists to make maximum wages work, but given how easily gamed our complex tax code is in the US, I can't imagine it's feasible.

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Re:How Paul Graham Gets It Wrong in “Economic Inequality” by EliRivers on Sunday January 03, 2016 @03:54PM (#10832322)

Elon Musk could surely easily hit the limit without all of his current ventures. What would be the incentive for him to continue to innovate once he's reached the limit?

As far as I can tell, he does not have a history of taking all the money and blowing it on himself. Whatever he's still working for, it's not because he wants extra money for spending. He clearly has some motive other than just wanting more money to blow.

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Re:How Paul Graham Gets It Wrong in “Economic Inequality” by ZenoArrow on Sunday January 03, 2016 @03:42PM (#10832257)

> "Elon Musk could surely easily hit the limit without all of his current ventures. What would be the incentive for him to continue to innovate once he's reached the limit?"

Whilst I can't speak directly for Elon, it does appear that his work is targeted at benefitting mankind. I'm sure that is plenty of incentive on its own.

> "wage" is ambiguous to the point of useless given: executive compensation isn't solely in the form of salaries, a complex tax code, and wealth begets wealth (it's relatively easy to maintain wealth once you're able to reap more from safe investments than it takes you to live)."

Sure, there will be loopholes, but let's start with the basics and wait for the loopholes to emerge. Tackling wages and inheritance should be enough to start off with.

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Re:How Paul Graham Gets It Wrong in “Economic Inequality” by schmichael on Sunday January 03, 2016 @03:47PM (#10832279)

Perhaps a better critique of a maximum wage would be:

What does it solve that graduated income, property, and estate taxes do not?

I can't imagine it could possibly be any less complex than a tax code since it needs to contain the same estimations of wealth ("wage" in your approach).

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Re:How Paul Graham Gets It Wrong in “Economic Inequality” by ZenoArrow on Sunday January 03, 2016 @04:27PM (#10832510)

Whatever method is used, the important part is in slowing down the rate at which the inequality gap grows. Graduated income, property and estate taxes could do the job, but only if much stronger taxes were brought in, and there appears to be reluctance to raise taxes on the wealthy. If higher taxes end up being the solution, then so be it.

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