The Super Rich Are Richer Than We Thought, Hiding Huge Sums

[Matt1970]

Each step of the way we take something that was of less value (grain) into something other people want, creating value. That is how wealth is created. It's true, it's not very much wealth, but with enough sandwiches you have something like McDonald's, a mutli-million dollar company!

Ahh, you seem to have the right idea (taking one item and doing something to it to increase it's value) you just used a poor example, the food industry. In your example the sandwich was probably eaten and therefore removed from the market. The guy who made the sandwich now has your $5. Come tomorrow he may still have your $5 yet you will now be hungry again. Something that has such a short life of any value is hardly adding value to the economy. If it stayed around longer and could be traded and really considered an asset, then ya, that would be wealth creation. That's why I think the food industry is a poor example of wealth creation.

 

[glenn1]

Ahh, you seem to have the right idea (taking one item and doing something to it to increase it's value) you just used a poor example, the food industry. In your example the sandwich was probably eaten and therefore removed from the market. The guy who made the sandwich now has your $5. Come tomorrow he may still have your $5 yet you will now be hungry again. Something that has such a short life of any value is hardly adding value to the economy. If it stayed around longer and could be traded and really considered an asset, then ya, that would be wealth creation. That's why I think the food industry is a poor example of wealth creation.

He's cited a customer value-add service and it does add value to the economy, even if it's a one-and-done sale. If the service can be scaled up to business model that supports and drives repeatable sales, that stream of single value-add transactions can legitimately be called an asset.

The question then becomes what would happen if we took money from Rich Person A and gave it to Poor Persons B-Z. Keeping with sandwich example, Kia seems to think that Poor Persons B-Z would use their windfall to open new delis, creating new and sustainable sources of wealth creation. I would argue that at best it would be spend by Poor B-Z on expendable consumer goods, creating no new wealth whatsoever citing Says Law. Basically whether Rich Man A uses $1MM to buy a yacht, or his money is given to Poor People B-Z to buy beer and lottery tickets makes no meaningful difference in the economic sense even if people on the left will complain about it for "fairness" reasons.

 

[Atreus21]

If you're going to make an argument, make an argument instead of asking leading question.

Where you thing the money these people are hoarding is being kept? Do you think they're hoarding it in a matress? Or in a bank account or some other type of account?

I'm going to give you a hint, check the OP and it'll tell you exactly where the money is being kept. But again, YOU make YOUR argument. Don't rely on me to make your argument for you.

The OP link doesn't get specific. They reference "off-shore tax havens". A brief overview of the PDF that Paul Krugman references doesn't give much specificity either.

So what are "off-shore tax havens"? I would assume they are banks of some kind. So, if this is true, what do you suppose the banks do with the money in their accounts?

 

[dmcowen674]

Originally Posted by glenn1
Hopefully OP will get his wish and the rich will all renouce their U.S. citizenship. That'll really teach those billionaires.

These people all think they are so important to the economy. They are not. They can leave and others will fill their roles.

Yes, starting with the rich on here.

 

[BoberFett]

So what are "off-shore tax havens"? I would assume they are banks of some kind. So, if this is true, what do you suppose the banks do with the money in their accounts?

 

[Matt1970]

He's cited a customer value-add service and it does add value to the economy, even if it's a one-and-done sale. If the service can be scaled up to business model that supports and drives repeatable sales, that stream of single value-add transactions can legitimately be called an asset.

I would have to disagree. The problem is the products produced are consumed and then gone. At best the food industry is a zero-sum game, they are mere transfers of wealth, not the creation of it. The problem is with the consumer. They have $5 worth of marketable value in the form of money. The corporation has $5 worth of marketable value in the form of food. After the transaction, and once the food in consumed, the consumer no longer has anything in marketable value.

 

[glenn1]

I would have to disagree. The problem is the products produced are consumed and then gone. At best the food industry is a zero-sum game, they are mere transfers of wealth, not the creation of it. The problem is with the consumer. They have $5 worth of marketable value in the form of money. The corporation has $5 worth of marketable value in the form of food. After the transaction, and once the food in consumed, the consumer no longer has anything in marketable value.

Are you one of those guys who says things like "wealth is only created by farming, mining, or manufacturing"? Hopefully you're not something who thinks services and ideas can't create wealth since that would undermine the entire premise of the division of labor.

 

[MagickMan]

I would welcome that. First though, we confiscate their wealth, beat the ever loving fuck out of them, and let them serve long harsh sentences in America's roughest prisons.

Unfortunately you're much wealthier than the average pleeb, so that includes you too, moron. :thumbsup:

 

[Matt1970]

Are you one of those guys who says things like "wealth is only created by farming, mining, or manufacturing"? Hopefully you're not something who thinks services and ideas can't create wealth since that would undermine the entire premise of the division of labor.

Services absolutely can add value to the market. If you came over and painted my house it would probably make it worth more money than the paint you put on it. You just created wealth. The food industry just isn't one of them. I am not worth $5 more than I was before I stuffed a big mac down my throat, however whoever sold me the big mac is. That's nothing more than a transfer of wealth.

*Edit - And BTW, how can you have farming, mining, or manufacturing without labor?

 

[Matt1970]

Unfortunately you're much wealthier than the average pleeb, so that includes you too, moron. :thumbsup:

He is so out of touch with reality. His salary alone puts him in the top 5%, then you add his wife's and who knows how much higher it really is, and he calls himself middle-class. He has a maid service, but to show you how much of a common guy he is he tipped the maid $150 at Christmas. He is worth well over a million yet out of the kindness of his heart he gave back a whopping .00015% to the common folk.

 

[BoberFett]

Food is wealth. It might be short term, but there is value in not starving.

Toilet paper is wealth. The lifespan is pretty short, but there's value in not wiping your ass with your hand.

Smartphones don't last more than a couple years right now, yet they're wealth even though they don't last as long as a car or a house. Longevity of a good is not a defining product of whether it is or is not wealth.

 

[Matt1970]

Food is wealth. It might be short term, but there is value in not starving.

Toilet paper is wealth. The lifespan is pretty short, but there's value in not wiping your ass with your hand.

Smartphones don't last more than a couple years right now, yet they're wealth even though they don't last as long as a car or a house. Longevity of a good is not a defining product of whether it is or is not wealth.

But once that term is up, so is it's value in the economy.

 

[glenn1]

Food is wealth. It might be short term, but there is value in not starving.

Toilet paper is wealth. The lifespan is pretty short, but there's value in not wiping your ass with your hand.

Smartphones don't last more than a couple years right now, yet they're wealth even though they don't last as long as a car or a house. Longevity of a good is not a defining product of whether it is or is not wealth.

But once that term is up, so is it's value in the economy.

I'm not sure why you're pressing this point so hard. Fine, don't invest in the stocks of McDonald's, Kraft, or other food retailers. Or give them lower valuations than a company that makes durable goods like Ford or Whirlpool. But if there weren't value being created (even if it's of the low profit margin variety), there wouldn't be nearly so many restaurants in the world.

 

[BoberFett]

I'm sure companies like ADM and Cargill would probably disagree with Matt's opinion on food as wealth...

 

[Matt1970]

I'm sure companies like ADM and Cargill would probably disagree with Matt's opinion on food as wealth...

Well, 24 hours after I have had my food and it appears again, you tell me what market value it has. Besides fertilizer.

 

[BoberFett]

Well, 24 hours after I have had my food and it appears again, you tell me what market value it has. Besides fertilizer.

Your reasoning is utterly ridiculous. Junkyards are full of old cars with zero value. I guess cars aren't wealth either.

 

[Zaap]

Glenn is right. Food is a commodity. It has a different measure of value than a consumer item like say a TV, but its entire chain of production and sale of course add value to the economy.

This is kind of like arguing that oil and gas can't add value to the economy simply because it gets put in a tank and burned up.

 

[TurtleCrusher]

Well, 24 hours after I have had my food and it appears again, you tell me what market value it has. Besides fertilizer.

You know, you're really making BoberFett look reasonable.

 

[Matt1970]

Your reasoning is utterly ridiculous. Junkyards are full of old cars with zero value. I guess cars aren't wealth either.

That's depreciation. There is even some value in junkyard cars for parts, however something that loses all it's value sometimes within minutes of it being created is hardly an asset in my book.

 

[Matt1970]

Glenn is right. Food is a commodity. It has a different measure of value than a consumer item like say a TV, but its entire chain of production and sale of course add value to the economy.

This is kind of like arguing that oil and gas can't add value to the economy simply because it gets put in a tank and burned up.

Well, if you use that gas to do donuts in your back yard, then no, but if you use it to transport goods, then yes.

Look, all I am saying is if you want to think that creating $5 worth of sandwich, and having someone pay $5 for that sandwich, then the time of there being $10 worth of assets in the economy is a very short window.

 

[Zaap]

I don't know about you, but I use food to stay alive. That actually has more immediate value to most people than anything else.

 

[Zaap]

Look, all I am saying is if you want to think that creating $5 worth of sandwich, and having someone pay $5 for that sandwich, then the time of there being $10 worth of assets in the economy is a very short window.

I just don't understand you looking at it like this. That $5 sandwich represents everything from the grain, dairy, and produce its made of, bakeries that made the bread, industry that produced the mustard and mayo, to the entire chain of marketing/service it takes to get it to you. Even a 'lowly' sandwich doesn't just materialize out of thin air.

 

[Fern]

The term "off shore tax haven" is a Pavlovian bell for liberals.

The US has tens of thousands of pages of tax law dealing with foreign investments, whether they be in high tax or low tax ("havens") jurisdictions. Contrary to how you've been trained to react, it does not escape taxation.

And there is nothing intrinsically immoral or illegal about in investing in another country. Cheating, or tax fraud, is what is immoral and illegal, and plenty of that goes on right inside our borders.

We need to figure out why people are sending their capital to places outside of the USA, whether they be US citizens or foreigners. We want that capital, we need that capital, that's important to growing our economy.

We need to look at our policies and see what we've done to chase capital away. We need to fix that. We're losing out in the competitive world marketplace. Pro-authoritarian cries from the Left to increase penalties, fines and make things tougher and more restrictive are just going to accelerate the negative trend. Other countries tried that model and failed miserably. It's a proven loser.

Fern

 

[brianmanahan]

I would welcome that. First though, we confiscate their wealth, beat the ever loving f**k out of them, and let them serve long harsh sentences in America's roughest prisons.

you and dave should get married and have little adorable communist children

 

[Fern]

Well, here we go:

Foreign divestment of U.S. investments is a serious risk

The FATCA threat of a 30% withholding tax and the potential exposure to transfer of personal data is inciting foreigners to divest out of U.S. securities and investments. Some foreign banks throughout the world have already indicated their intention to do so and have advised their institutional and private clients accordingly.

• The Japanese Bankers Association stated very clearly: In the event that the implementation of FATCA is not practically feasible for the Japanese financial services industry, it would result in substantial confusion in the industry and could ultimately lead Japanese financial institutions to withdraw their investment from U.S. financial assets. ii)

• The European Banking Federation and the Institute of International Bankers, which in their own words represent most of the non-U.S. banks and securities firms around the world that are affected by the FATCA provisions, highlighted their concerns: many FFIs, particularly smaller ones or those with minimal U.S. investments or U.S. customers, will opt out of U.S. securities rather than enter into a direct contractual agreement with a foreign tax authority (the IRS) that imposes substantial new obligations and the significant reputational, regulatory, and financial risks of potentially failing those obligations, or may disinvest their U.S. customers in order to reduce their compliance burdens under an FFI Agreement. iii)

• This warning from Europe was reiterated in June 2011. George Bock, a Luxembourg-based KPMG partner and head of tax at KPMG, told reporters at a funds event in London that FATCA could cause investors to sell out of U.S. stocks, bonds and other investments, affecting the price of U.S. shares as well as those of other countries in ways that are not yet fully clear. iv)

There's more, I didn't want the post to be too long.

http://americansabroad.org/issues/fatca/fatca-bad-america-why-it-should-be-repealed/

Fern