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That's because every generation is cyclical. The generation that grew up during the great depression created their wealth through hard work, saving, and investing (and many were entrepreneurs as well). As these others generations inherit that wealth they squander it (i.e. belonging to fancy country clubs, vacation homes, etc) as they didn't understand how their parents built their wealth. The statistics show this so you can't argue it (even though I know it helps you sleep better) something like 67% of those that inherit millions end up spending it so their kids have only a fraction (or nothing) left to inherit.
There are no statistics supporting this fluff. However, there ARE statistics showing that children born in to the top quintile rarely ever fall lower then the next highest quintile in their complete lifetimes.
In fact, the two most important factors affecting a persons income mobility are their initial starting point on the distribution, and marital status. In other words, being born in to wealth, and gold digging someone born in to wealth are the two most effective ways to bounce.
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Originally Posted by hskrfan2187
The free market naturally redistributes the money by people being stupid and worrying too much about their "status" instead of financial independence.
The "free market" does not naturally distribute anything. The wealthy are the owners of capital, and therefore possess the means to continously generate wealth. In addition, the children of the wealthy are far more likely to have a priviledged childhood and be provided the top educational opportunities, which often pushes them in to the top tax brackets independent of their parents wealth.
In reality, there are very few cases of worthless ignorant children blowing fortunes. Normally, if a kid proves to be significantly inept, the parents will set the capital holdings up in competent hands, and the kids live off trust funds.
The Gini index NEVER naturally goes down for any significant time period (although large changes in the stock market can do damage as well as large minimum wage hikes, or tax policy). Significant cultural changes must be made, or a complete political shake up is neccessary.
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Originally Posted by hskrfan2187
And what's this idea that we increase the taxes on the poor? Have you not seen our tax system? The rich pay well over twice as much, sometimes 3x as much (as a percentage), in taxes than do the poor.
Although the rich often pay less as a percentage then middle income people.
If you want your taxes to go down why don't you tell your spend happy politicians to cut spending.
Thats fine, how about we start with the corporate welfare. The first things we can cut are the no bid defense contracts. Then, we can cut out the farm subsidies for huge corporate farms. Then, we can stop dumping in medicare and medicaid money in to the bloated medical complex.
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Originally Posted by hskrfan2187
Oh but wait, you just want the "rich" (most of whom aren't even millionaires but just make a lot at their job) to be taxed upwards of 50%+ because they were in school for 5+ years longer than you,
The only people who went to school 5 years longer then me would be doctors.
Then don't tax the first $30,000 of income...problem solved. Cut government spending and implement a flat tax of 15% above $30,000 of income.
I am actually in support of a similiar system, except I favor a consumption tax rather then an income tax, however, only if vices are legalized and taxed.
Other then that, Id imagine that the flat income tax would be better.
My info comes from the book Millionaire Next Door that surveyed millionaires. I have no idea about the billionaire list but I doubt that's who you were referring to as your rich friends.
Unless you can prove otherwise I call bs on any claim that most wealthy people inherited it, as it's counter to what I've read.
On what planet does Millionaire Next Door count as a qualified source? Mein Kampf is also a book, so is Harry Potter.....should those also be used as factual life guides?
Oh, by the way, in 1996 when the book was published, generation Xers ranged from 15-35, very few to any of them would be old enough at that point to have inherited anything.
According to your bible, the average millionaire was 57 years old around 1996, which places their birth in 1939, which would cleanly place them in the Silent Generation. They were 16 before modern McDonalds came about, and 23 before Walmart was even a thought in Sam Waltons head.
Additionally, on their watch, the US Gini index went from the low 30's to the mid 40's by the time that book was written.
What does that mean? It means that most of the millionaires from the silent generation, and possibly the older ones of the baby boomers, DID make their millions largely through hard work, and most did come from a modest background, since it was infinatley more rare for people to come from great wealth, since income was much better distributed. However, their kids, and their grand children, have increasingly found it harder and harder to gain any ground no matter how much work they put in.
This is EXACTLY why the US is more educated and more able bodied then at any point in its history, yet, amazingly, there have been no gains on median real income in 40 years. How is that possible?
Oh yeah, we are all just spinning our wheels harder and harder for a smaller piece of the pie. Where will that pie be going when the Silent and Baby Boom generations kick the bucket? If you guessed to their children, you are right.
I will promise you that over 75% of all generation Y millionaires will have inherited their wealth.
How can there be a source? Generation Y isnt even 30 years old, and some of them are as young as 9.
However, you cannot deny that the wealth has been doing nothing but gathering in the hands of a few. If you think that wealth is going to magically redistribute without it being taxed or taken away by some other means, you are a bigger idiot then you portray yourself to be.
The Silent Generation and the Boomers have successfully managed to transfer wealth to the top at an alarming rate, and they arent about to see it go back in the pot.
Not any more. Generation X and Y are increasingly inheriting their wealth. In addition, inheritance is still the best way to the billionaire list currently
67% of those that inherit millions end up spending it so their kids have only a fraction (or nothing) left to inherit. The free market naturally redistributes the money by people being stupid and worrying too much about their "status" instead of financial independence.
In turn, the next generation sees how their parents blew all the money and doubles up working hard to make their own.
The of self-made billionaires is higher (and growing) than the inheritance crowd.
And I haven't looked at the list to see the type of inheritance billionaires.
Just a few problems
1. Your article has nothing to do with generation X and Y
2. When talking about billionaires though, there are 6 billionaires under 40, all of them inherited either their entire fortune or massive capital assets outside of the Google founders, Sergey Brin and Larry Page, and John Arnold, who was a commodities trading whiz and parlayed that in to a hedge fund. Out of the ten youngest billionaires, not a single one came from a working class background.
3. Speaking of generation X and Y, why dont you take a look at the companies that are controlled by many of those people on the billionaires list.....you will see that their children are infested in leadership positions, and will likely inherit controlling interests, like Carlos Slims kids.
Because there is no country that ever survives the epic wealth transfer that is and has been going on in the USA.
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