Should there be a wealth cap?

[mindstalk]

Note, not a wealth tax, though one could use one to approximate this, but a cap, an attitude that "enough is enough for one person, we're not acknowledging ownership of any more". You can imagine a hard cap, a progressive wealth tax that strongly discourages further accumulation, or some other mechanism, whatever makes you most comfortable.

Numbers for context:

Average American worker income of about $40,000. (Mean per capita is $46,000, median is rather less, workers have some advantage.)

Lifetime earnings of such a worker: $2 million over 50 years, ignoring taxes or living expenses.

One estimate for total US wealth: $60 trillion. Which leads to about $200,000 per capita.

Income of hard-working and highly-skilled people who provide services on a direct basis, like doctors and lawyers: around $200,000 I think? $400,000, 10x average, is probably a good approximation.

GDP of the US: about $14 trillion

Federal budget: about $3 trillion

Income you can get from having lots of money: 1% over inflation if you play it safe, up to 7% with diversification and risk. I'll tend to use 1-3%.

[Poll #1775671]

$40 billion: I seem to recall when Bill Gates having $10 billion was freakish and unique. Now this is the working megabillionaire level: Gates, Buffett, Soros, Walton. Actually Wal-Mart has produced multiple kids who *inherited* $20 billion. The average worker has to work 1 million years to get this level. You can probably get $1 billion a year in fairly safe interest. You can own and run a small town of 10,000-70,000 servants.

$400 million: If you had 100x the average income, and worked for 100 years, you'd get this. Safest interest is twice the average lifetime earnings. You can have 100 full-time servants, or a handful of high-end lawyers and doctors who exist to attend to your every fart. Note this is only 1% of the megabillionaire level, who can spin this off as interest. This is my upper bound for a cap; it still feels obscene, but if one grants a need for high end incentives, I can't see more than this being useful. Nor see this cap as hurting society.

$4 million: 20x the average wealth. One could argue that having a lifetime's earnings to play with all at once, and the ability to earn average income without working, is reward enough, and wanting more is filthy greed. Probably low enough to be noticeable in effect though, changing urban property value and distribution.

Comments

[nancylebov.livejournal.com]

I believe you're assuming that if there's a wealth cap, the money which is taken will be fairly distributed or used for something benign.

If you've concerned about disproportionate power, the power of the government vs. the average citizen as well as the power of wealthy people vs. the average citizen should be considered.

In completely unrelated news, records about the CIA having rendered people to Libya to be tortured are turning up as a result of the revolution there.

[mindstalk.livejournal.com]

More equal distribution and benign use is certainly a real possibility, especially in a democratic country less distorted by the presence of the ultra-rich. The government has more power but is also more accountable; exactly how much so depends on the government.