Comment by maxerickson
9 years ago
The problem literally is that many people don't have an adequate share of the GDP.
The footnote proposes to tax capital the same as labor.
An interesting thing about Bill Gates is what a tiny sliver of GDP he managed to capture over almost 40 years. Something like $0.1 trillion out of several hundred trillion dollars.
Caveats: GDP is no way to calculate wealth, and comparing the total GDP to any one person's wealth is pretty useless.
Let's say the total GDP over the last 40 years was 300 trillion dollars. Also, let's say Bill Gates's wealth is 100 billion dollars (for ease of calculation).
100B / 300T = 0.003 = .3% of 40 years of GDP
Let's say that the average population of the US during that 40 year period was 170M[0].
170M * 40 years = 6.8B person-years of work (PYoW).
Bill gates contributed 40 PYoW to the GDP, which is 0.000000059% of the GDP.
However, he captured .3% of the GDP as current wealth (not including wealth spent during that 40 years)
That means his wealth capture is 5 million times the "average".
That 'tiny sliver' is anything but.
[0] - https://fred.stlouisfed.org/series/LFWA64TTUSM647S
You are just beating on the fact that I based the comparison on the total rather than the mean GDP available to an individual.
But that was the point of my post, to compare the captured wealth to consumption. People always talk about how the wealthy are screwing the rest of us over and everything would be great if they weren't taking so much, but it turns out that consumption is also a huge portion of the economy. Total wealth in the US is on the order of $100 trillion (this includes all housing and so on). Consumption of several trillion dollars a year adds up to that pretty quick and seizing it all and turning it into circuses isn't going to go very far.
Which isn't to say I am against programs that result in wealth transfer, it just pays to try to look at things clearly.
You are just beating on the fact that I based the comparison on the total rather than the mean GDP available to an individual.
I addressed the comment you made, not the comment you didn't make.
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A single person capturing a few ten-thousandths of a percent in a country of over three hundred million people seems like a pretty large sliver to me, relatively speaking.
Oh of course, I just think people have a tendency to overlook how much of our productivity directly gets consumed.
I'm not strongly tied to the language I used, I just find the comparison interesting.
Wealth is not the same thing as income, like speed is not the same thing as distance traveled.
GDP is the national income.
Mostly agree, though I'd quibble (as did Simon Kuznets) that GDP is a poor metric for national income. The entire field of national income accounting is rather fraught.
Going back to Adam Smith, "Wealth is the annual produce and labour of the nation". Elsewhere he argues that "the sole use of money is to circulate consumable goods". As a man not given to short sentences, I recommend paying attention when he uses them.
https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_II...
Defining, and measuring, and allocating wealth has been a bit of a conundrum for the past 240+ years. And a while before by some reports.