Enough

by wj

As I noted in a comment earlier, one of my political goals would be
1) equality of opportunity,
2) NOT equality of outcomes,
3) adequate support for those who are struggling, funded by money from those who have been most successful.

But how do we get there? I think that first we have to accept the concept of Enough.

When you have income, what do you spend it on? First, you need food on the table, a roof over your head, and clothes on your back. Once you have funded that, you start on other necessities: e.g. transportation, information, etc. (We can have another discussion about what is and is not a necessity.) And you put money aside, both to deal with emergencies and to fund a tolerable retirement. Also, you start to provide some luxuries to make life more comfortable.

At some point, you’ve got all the necessities covered. And as for luxuries, you are essentially spending as much as you can on luxuries that you have time to actually use. At that point, you have Enough. There is no economic reason* to make more – we’ve already stipulated that you can’t usefully spend any more. So why do so?

I suggest that the only reason to make more is to demonstrate how wonderful/accomplished/important you are to folks who have no clue about the actual, objective, value of what you do. To put it bluntly, incomes beyond that point are nothing but a dick measuring contest. (Of course, some people may consider that to be necessary to their self-image. Tough.)

At that point, there’s no reason not to put the marginal tax rates at close to 100%. You may have a philosophical objection to the idea, but you don’t have a personal economic cause to complain. And that provides funding for a safety net for those who are still struggling with the basic necessities.

* Stipulate that there will be those who end up making more as a side effect of doing the things that they love doing. I would say that Warren Buffet appears to fall into that category. He’s not making ever more money for the sake of the money/status, witness the fact that he isn’t frittering it away on flashy luxuries.

Comments

[Ugh]

So, marginal tax rate of ~90% at anything over $10 million/year, including marking to market financial and real estate assets?

[Ugh]

Or maybe $1 million/year, also cap gains taxed at ordinary income rates and get rid of the new pass-through deduction.

[wj]

Ugh, yeah pretty much.

But I'm mostly focused on the general concept. The details (e.g. the thresholds) are open to discussion.

[Ugh]

That's what you get when you have a tax lawyer as one of your co-front pagers wj!

[hairshirthedonist]

Perhaps whatever income thresholds for whatever tax rates should be determined based on per-capita GDP.

[jack lecou]

I.e., diminishing marginal utility of income, which has always seemed like a fairly incontrovertible fact to me. Possibly to everyone -- which I suspect is why the Right tries to frame opposition to progressive taxation in terms of "[cuckoo] freedom" or "simplicity" or "economic efficiency", etc.

The footnote puts me in mind of running it like a business -- the fetishization of money and profit over everything else, including actual value, which has been bringing about the great hollowing out and gradual failure of not only public institutions like government, infrastructure and universities, but also, increasingly, businesses themselves.

I don't think it'd be too hard to make the point that high incomes -- whose purpose can only be accumulation for its own sake -- is not only excessive, but indeed a negative, inasmuch as it's sort of culturally displacing activity which is done for other reasons - like doing a job well, producing a quality product, etc.

(See also: medicine, where anecdotal evidence suggests that a lot of surgical oncologists and whatnot are maybe in the profession for what one might call the wrong reasons. Millions of wrong reasons.)

[bobbyp]

What Jack said.

[wj]

See also: medicine, where anecdotal evidence suggests that a lot of surgical oncologists and whatnot are maybe in the profession for what one might call the wrong reasons.

So if there isn't the option to make ridiculous amounts in that field, maybe we'd get more people in medicine who are actually interested in medicine? Sounds like a serious win.

[hairshirthedonist]

One of the common arguments against high tax rates is that they reduce the incentive for people to seek additional income, which seems to imply that the seeking of said additional income is desirable for society at large. Once that income is above a certain level, I don't know that it holds true.

If we're talking about a progressive tax system with marginal rates that increase with income, what sort of economic activity are we talking about at the highest levels? If it's truly productive, in the sense of creating real value (see jack lecou above), why not let someone else whose income isn't already as high create that value and seek that additional income?

If it's not truly productive, who gives a sh*t if anyone at all does it?

[jack lecou]

So if there isn't the option to make ridiculous amounts in that field, maybe we'd get more people in medicine who are actually interested in medicine? Sounds like a serious win.

Indeed.

It also works in sort of the reverse direction for the financial industry. How many quant nerds with math and physics degrees are there just because it's the fastest way to pay off their student loans, rather then their actual life passion.

Isn't it likely to be more beneficial to society, in both the short and long term, if they were employed in figuring out protein folding or Navier-Stokes or something rather than the best way to make money off of derived derivative derivations?

[wj]

That's what I love about this blog: I could actually encounter someone who has even heard of the Navier-Stokes equation! Thank you.

[Countme-a-Demon]

Three quotes from works of literature from an essay by Martin Amis on John Updike:

"to surrender the burden of his body utterly, but instead found himself obliged to carry it through it series of fresh efforts -- forms to be filled out, proofs to be supplied of HIS FINANCIAL FITNESS TO BE ILL ..."

.... from Updike's short story, "The City" wherein the prot(agonist) checks himself into an emergency room for stomach pains (which turns out to be appendicitis).

Later, after surgery:

"There materialized a host of specialists in one department of Carson's anatomy or another, so that he felt huge, like Gulliver pegged down in Lilliput for inspection. All of them paid their calls so casually and pleasantly -- just dropping by, as it were -- that Carson was amazed, months later, to find each visit listed by date and hour on the sheets of hospital services billed to him in extensive dot-matrix printout -- an old Centronics 739 printer, from the look of it."

from "Lolita", by Nabokov:

"As in any American hospital, every tear-stained pillowslip, every scrap of soiled paper tissue, has eventually to be answered for."

My apartment rent in Denver just took its percentage biggest jump in years, after rising every year for the past nine.

I asked why such a big rise this year, partly tongue-in-cheek, because I knew at some point someone would explain patiently to me that "it's the market, you know, supply and demand", (followed by a shrug) like folks in primitive times waving away reality's events by noting the alignment of the stars or the random arrangement of the viscera of chickens after slaughter.

Sho enough.

Here's the thing, many, many hundreds of fairly high-rise apartment units have been constructed across the street during the past year, so supply is flooding the market, but yeah, folks are moving to Denver in droves.

Still.
Rental units are going up willy-nilly, but they aren't marketed to mid-to-lower income residents, but rather up-market, and no pigfucking government any longer wants to subsidize housing for mid-to-lower income residents shut out of the housing market.

Like night follows day, the reasonably-priced units in town then raise their rents to compete for higher prices, not lower prices, not unlike the market for medical care.

Supply-side fuckyounomics.

America makes up shit as it goes along and then mouths the word "markets" to justify fucking everyone below a certain socio-economic level.

I have the freedom to move out of Denver, don't I realize?

You mean, I have the freedom to be forced to move?

That's what passes for rational in totally rationalized America ... every aspirin, every bullet, every square inch a profit center.

What a bunch of fucks we've become.

Yeah, Costa Rica looks pretty good, but fortunately, unlike many, I can afford for the time being to tell the market that wants me to move to go fuck itself.

Maybe I'll join the Incel cult devoted to parsing out shelter more fairly, while conservatives spend their time rationalizing the sexual marketplace.

[CharlesWT]

So if there isn't the option to make ridiculous amounts in that field, maybe we'd get more people in medicine who are actually interested in medicine? Sounds like a serious win.

Or more people who are actually interested in something besides medicine.

[Countme-a-Demon]

"Or more people who are actually interested in something besides medicine."

Teaching school, perhaps, and having their summer vacations maligned?

Inside every oncologist, there is a boardwalk water colorist trying to get out.

[Countme-a-Demon]

https://www.vox.com/explainers/2018/3/21/17101260/trump-labor-department-tip-rule

Restaurant workers everywhere were ready to quit their jobs and either hit the beach or become oncologists.

[Countme-a-Demon]

It used to be that doctors would say "Whaddaya think, I'm in this for my health?"

Now patients day it.

[Countme-a-Demon]

say

They were patients undergoing surgery to correct speech impediments.

[CharlesWT]

Teaching school, perhaps, and having their summer vacations maligned?

It's not like careers are not fungible. Otherwise, the number of women in STEM wouldn't have declined when other career opportunities became more readily available in western countries.

[CharlesWT]

..., the number of women in STEM...

Perhaps ", the percentage of women in STEM" would be more accurate.

[wj]

"fungible"?

I don't think that's quite the word. Too much difference in skills required. There are choices, alternatives. But not unlimited, interchangeable ones.

Still a career certainly shouldn't be a life-long straitjacket either. And clinging to the illusion that, once embraced, a career ought to last forever is pretty much a guarantee of disappointment in today's economy.

One (of many) challenges for those who would reduce poverty and inequality is to help people see what alternatives they might have. Which would be not only acceptable but enjoyable. And then show them how to acquire the skills needed to grasp the opportunity.

[Hartmut]

That's what I love about this blog: I could actually encounter someone who has even heard of the Navier-Stokes equation! Thank you.

My choice of professor for one of my chemistry (oral) finals was influenced by the goal of avoiding those that expected the examinees to know all of them by heart in spherical coordinates. Viscosimetry in cylindrical coordinates for non-Newtonian fluids was bad enough (and I got lucky enough to be left off with the basic principles on that. I would have totally failed deriving the equations).

[JanieM]

Thanks to both wj and jack lecou. Great, thought-provoking stuff. "Enough" is a great concept, and unfortunately one that our current zeitgeist never seems to have encountered.

wj's post reminds me that I sometimes think of money as being like water (n.b. I am not an economist ;-). That is, there are oceans and lakes and rivers and streams of it, and we -- and all living beings -- need it for life.

I would like to think of wj's plan not so much in terms of high marginal tax rates, but in terms of the community at large saying: no one is allowed to wall off so much water for themselves that other people are deprived of a life-sustaining supply.

If we could collectively agree on some "enough" that would let people live in comfort and dignity, even the least capable of us, then we could let the dick-measurers have their stupid contest among themselves with what's left over.

If it's not truly productive, who gives a sh*t if anyone at all does it?

No NBA, no rock stars... I don't know if LeBron would still play basketball for our entertainment, but I bet great books would still get written.

[JanieM]

Andrew Sullivan in his slimy way used to say that higher tax rates would "punish the successful." (I stopped paying attention to Andrew a long time ago; for all I know he's still saying it.)

I always wanted to ask: successful at what? As wj's framing suggests, there's a point after which the accumulation of more and ever more money is a matter of being successful at ... accumulating more and ever more money. It isn't "punishment" to say you don't get to concentrate vast, outsized proportions of the world's wealth in your hands. The world was here before you, it will still be here after you're gone, and it doesn't belong to you. It belongs to all of us.

[wj]

I don't know if LeBron would still play basketball for our entertainment

I would bet that most of the NBA (don't know about LeBron specifically) would be fine with playing for a merely high (net) salary. They're happy to be well paid, but they are there in significant part because they love what they do. (Otherwise they would retire as soon as they had socked away enough to never have to work again.)

[JanieM]

wj, you're probably right. I remember an anecdote in Sports Illustrated many years ago in which an NBA star who had been heavily recruited said something to the effect of: They don't seem to realize that I'd play this game for nothing.

Not that he was complaining.

[Countme-a-Demon]

I've been PAYING to play baseball since I was a kid.

There's a joke in there somewhere, but I'm pretty good in my small world.

Professional athletes were paid chickenfeed, with the exception of a few superstars, for decades.

Most worked second jobs, like teachers.

After Curt Flood and collective bargaining, sports franchise owners claimed it was the end of the world, how's a guy spose to make a living if we have to pay labor what they deserve.

Now the Yankees are worth half a billion dollars. Cities pay teams to stay in town.

The baseball minor leagues are full of guys who are paid next to nothing, but they stick to it for years, even after the possibility of a call up to the Show is out of the question.

Artists, musicians, hundreds of thousands of them toil away for decades without shaking the money tree.

Maybe money ain't what drives them.

Poets? Jesus H. Christ!

Most of them have to teach, maybe at the university level and be called elitists by conservative cocksuckers and worse, they might receive a government grant and be called even worse by cocksuckers the same.

New York and LA are full of actors working as servers and clerks for nothing.

Hell, two low-paid, not very successful actors had to act in a commercial in the 1990s denigrating their opportunity to receive medical care under HillaryCare, because some conservative assholes paid them a little bit of money to do so.

They were interviewed later and said they could have used medical insurance given the part-time nature of all of their jobs.

Ya think many oncologists would give a shit one way or another if those two actors showed up in a hospital emergency room with a tumor the size of Wyoming and no insurance?

If I give them subsidized care, says the oncologist, then I have to give others subsidized care. Where does it stop?

I might as well become a poet, the oncologists would protest.

America is a wondrous place.

Any kind of bullshit will fly to keep the money in the hands of them that has it.

[Countme-a-Demon]

Vincent Van Gogh wants to know when he gets his cut from his paintings that Hollywood plastic surgeons and hedge fund managers purchase at auction.

I expect he wonders why he ever put forth the effort on "Starry Night".

I coulda been an oncologist, he raves to himself.

[jack lecou]

wj's post reminds me that I sometimes think of money as being like water (n.b. I am not an economist ;-). That is, there are oceans and lakes and rivers and streams of it, and we -- and all living beings -- need it for life.

An analogy that's been playing in my head recently is that of the economy as a machine, like, say an airliner.

This touches on the 'efficiency' argument against higher progressive tax rates. Tax rich people too much and they won't perform, they say. We must have hedge funds and bankers and gazillion-dollar CEO compensation packages in order to 'grow the economy'. The more the better, if they're rich and growing richer, they must be doing something right!

The problem is, these folks (and all of the others who let this sort of framing of the issue pass unchallenged) have lost all sight of what that growth is actually for.

It's like this group has taken it in their heads that they need to make the aforementioned jet PLANE faster and more powerful and more 'efficient'. The trouble is, the point of a passenger jet is passengers, which they ditched, along with the seats, at least a dozen streamlining and weight reduction cycles ago.

That's our economy. An ostensibly ultra powerful passenger jet that left all us actual paying passengers back at the terminal sometime in the 1970s, and has been doing nothing but carting around a couple of airline executives with ever increasing comfort and rapidity ever since.

But heaven forbid we do anything about that little problem. It would "cost too much" and/or "discourage performance"...

[jack lecou]

(Weird. PLANE should not be capitalized. Oh well. At least I didn't have caps lock on for the whole thing. Don't want to come across as an angry lunatic or anything.)

[hairshirthedonist]

No NBA, no rock stars...

My thought process was more along the lines of (most) people not bothering to make more than some largish number of dollars per year because marginal tax rates would make it not worthwhile (to most people). Either way, sports and music are productive. They make people happy.

But I can imagine agents not fighting as hard for the heavily taxed dollars above whatever largish number. Still playing sports and music, just for somewhat less. (And those aren’t the kinds of things you can simply leave for someone else in a lower tax bracket to do. Most people kind of suck at them, relatively speaking at least.)

[JanieM]

Either way, sports and music are productive. They make people happy.

No argument there.

[JanieM]

Most people kind of suck at them, relatively speaking at least.

Or there either. ;-)

[bobbyp]

They make people happy.

As opposed to sports franchise owners, coddled by anti-trust exemptions (this is a public policy...look it up!) who are basically economic squatters, getting richer off of economic rents.

Our public policies dictate the actually experienced economy we observe, not some imagined 'natural' economic laws.

Thus endeth today's lesson.

[bobbyp]

wj's post reminds me that I sometimes think of money as being like water (n.b. I am not an economist ;-). That is, there are oceans and lakes and rivers and streams of it, and we -- and all living beings -- need it for life.

jm,

The government creates money out of thin air. Therefore, this creative process should be subject to democratic control.

'nuff said.

Thanks.

[wj]

You can characterize what the government does as "creating money out of thin air." But the implication that it can do so without limit (which I have seen asserted; not here, I hasten to add) is simply wrong. One need only look at the hyperinflation that has afflicted the countries which have tried it to see that.

I understand that this may not have been what Bobby was suggesting. But it's a subject on which I get twitchy real fast.

[sanbikinoraion]

Two points:

1. Why this incessant addiction to talking about taxation of *income* instead of taxation of *wealth*...? It is surely accumulated wealth that allows people and corporations to corrupt democracy, not income. Yes, income adds up to wealth, but wealth persists. Tax income and not wealth, and the rich stay rich, and the poor can never be rich. Tax wealth!

2. What happens to all of this additional tax revenue...? Will the government use it to balance the books by, er, cutting taxes? Or will it be hoovered up by the military-industrial complex and "special interests"...?

[Countme-a-Demon]

Never enough.

https://www.motherjones.com/kevin-drum/2018/05/zte-lives-thanks-donald/

[JanieM]

What happens to all of this additional tax revenue...?

Did you notice wj's point #3?

3) adequate support for those who are struggling, funded by money from those who have been most successful.

It's hardly likely that a society that had come so far as to design a system like the one wj is talking about would leave those loopholes gaping wide.

[Pro Bono]

I'm one of those quant nerds someone mentioned. I did it because it was what I was best at. But being very well paid for it was gratifying.

My late wife was an oncologist. She did it to help the sick.
__

If you're going to have highly progressive tax rates, there should be a rebate so that you end up paying based on average rather than peak income.

[Countme-a-Demon]

"(Weird. PLANE should not be capitalized. Oh well. At least I didn't have caps lock on for the whole thing. Don't want to come across as an angry lunatic or anything.)"

You can hire people to do that. ;)

https://talkingpointsmemo.com/livewire/wh-aides-write-tweets-errors

[hairshirthedonist]

If you're going to have highly progressive tax rates, there should be a rebate so that you end up paying based on average rather than peak income.

Why? You won't pay the higher rate on income to which it doesn't apply, even in your highest-earning years. If you are paying a very high rate at some point, it's because you made a lot of f*cking money that year.

[Pro Bono]

Why should I have a higher after-tax income over a ten-year period if I earn $1m a year for ten years than if I earn $2m a year for five years, then not much after that? For example if I'm a sportsman at the top of his game for a relatively brief period.

[liberal japonicus]

wj, not to step on your post, but Calvin Trillin discussed his late wife's principle of 'enoughness' a number of times, something he termed the Alice Tax. Googling, I found this, where it's discussed in section V of his remembrance of her.

https://www.newyorker.com/magazine/2006/03/27/alice-off-the-page

[hairshirthedonist]

Why should I have a higher after-tax income over a ten-year period if I earn $1m a year for ten years than if I earn $2m a year for five years, then not much after that?

Because you, like everyone else, would get taxed on a annual basis. That's how it works. If your income fluctuates, that might happen. It seems workable enough not to make it overly complicated by trying, in effect, to average out everyone's income over however many years. (Maybe we should consider present value while we're at it.)

Be happy you made $10M. If these are your worries, consider yourself lucky.

[russell]

see also, the title of the post

[sanbikinoraion]

> Be happy you made $10M. If these are your worries, consider yourself lucky.

Yeah, that's the answer. Sports stars are not entitled to retire after their "career" finishes, just like I'm not entitled to retire after my first career finishes either.

[Pro Bono]

ok, but you'd find a lot of sports contracts structured to smooth out income.

[wj]

Why this incessant addiction to talking about taxation of *income* instead of taxation of *wealth*...?

I think at least part of the reason for taxing income rather than wealth is that taxing income provides government with an on-going income stream. Whereas taxing wealth would be a one-time thing.

Also, taxing wealth provides a huge incentive to stash said wealth somewhere else. Whereas taxing income means that you can tax it at the source.

Note, also, that taxing inheritances, while it can be seen as a tax on the heirs income, actually is a tax on wealth.

[wj]

Why this incessant addiction to talking about taxation of *income* instead of taxation of *wealth*...?

I think at least part of the reason for taxing income rather than wealth is that taxing income provides government with an on-going income stream. Whereas taxing wealth would be a one-time thing.

Also, taxing wealth provides a huge incentive to stash said wealth somewhere else. Whereas taxing income means that you can tax it at the source.

Note, also, that taxing inheritances, while it can be seen as a tax on the heirs income, actually is a tax on wealth.

[wj]

lj, thanks for the reference.

I'm pretty sure mine is a case of "independent invention." Certainly I don't claim exclusiveness. ;-)

[Countme-a-Demon]

Pro Bono, of his late, beloved wife:

"She did it to help the sick."

Precisely.

There is more to the human world than economic and tax incentives and disincentives, though American conservatives do their best to convince everyone those are the behavioral science straight jackets, even slightly applied, that form the basis of all human motivation.

When Ayn Rand hooked up with Medicare via her husband's account, she went right on condemning gummint.

A poet doesn't say, "When I write a poem that earns me my first million, that's it, I'm outta here. You wouldn't believe the tax burden."

True, the poet might succumb to alcohol and other of the sybaritic pleasures, which might in turn give him/her a case of writer's block, but such are the real pitfalls of success, money, and fame.

[hairshirthedonist]

ok, but you'd find a lot of sports contracts structured to smooth out income.

I can live with that.

[hairshirthedonist]

Whereas taxing wealth would be a one-time thing.

Not necessarily. My property taxes (on wealth I don't even own entirely!) happen every year just as sure as the earth goes 'round the sun.

So - it depends.

[cleek]

hey, remember when everybody buts its members agreed that the Stupid Party's tax cuts weren't going to do anything but increase corporate profits?

https://www.vox.com/policy-and-politics/2018/5/22/17350180/harley-davidson-tax-buyback-kansas-city-factory

[Countme-a-Demon]

That's why this happened:

https://www.usnews.com/news/best-states/wisconsin/articles/2018-05-10/no-media-being-allowed-at-harley-davidson-annual-meeting

[Countme-a-Demon]

https://www.marketwatch.com/story/households-lose-out-on-hundreds-or-thousands-of-dollars-due-to-slow-pay-gains-2018-05-22?siteid=bigcharts&dist=bigcharts

Being Americans, however, all of these folks are gratified to NOT receive wage increases, because it might kick them into higher tax brackets.

Corporate America is colluding with the filthy republican party by not increasing wages, so that revenue via the income tax to the government does NOT increase, thus bankrupting the government during the next economic downturn.

If their wages do rise, given prevailing conservative behavioral economic claptrap, expect tens of millions of Americans to quit their jobs wholesale and become front-porch whittlers and yarn-spinners, because what is the point in working.

Just like Warren Buffet, Bill Gates, and Paul Ryan gave it all up after their first $200,000 and stowed their effort and talents under a rock in Galt's Gulch.

[Countme-a-Demon]

It's no coincidence that Vlad Putin owns a Harley.

[Countme-a-Demon]

John Bolton:

"I think one advantage of having this meeting between President Trump and Kim Jong Un so soon, in effect, without months and months and months of preparation, is that President Trump will be able to size Kim Jong Un up and see whether the commitment [to denuclearization] is real."

Hillary Clinton seemed over-prepared during the 2016 campaign.

That definitely would have led to nuclear war with North Korea, unlike the seat of mp's pants cosseting his fat behind.

[Michael Cain]

Why this incessant addiction to talking about taxation of *income* instead of taxation of *wealth*...?

My wife and I have spent 40 years of our adult lives paying our taxes like good citizens, in particular providing for our grandparents and parents generations' pensions and health care in their old age. At the same time, we lived below our means and accumulated a modest amount of wealth to supplement our public pension and health care now that we are almost old.

One side tells me that we can't have the public part of the promise. This kind of remark strikes me as saying we can't have the private part. A pox on both positions -- the US can afford to support its oldsters, and we don't have to threaten to tax their wealth to do it.

[CharlesWT]

the US can afford to support its oldsters, and we don't have to threaten to tax their wealth to do it.

With the declining birthrate and restrictions on immigration, this isn't going to last. In a few decades, we could be where Japan is now.

[hairshirthedonist]

One side tells me that we can't have the public part of the promise. This kind of remark strikes me as saying we can't have the private part.

I would suggest that this depends on what levels of wealth would be taxed and how much. Perhaps those would depend on some small number of life circumstances, possibly addressing your concerns.

[McKinneyTexas]

Part I

Sometime back, I did a drive-by to the effect that 90% of the equipment for LJ's prostate cancer treatment (I think that was the context) would be the product of the private sector, which Russell pronounced to be 'horseshit' and now we have WJ opining that there is a point at which any rational person has enough.

These are related points. There isn't a single piece of medical equipment--or anything else manufactured that I can think of--that is actually produced by a government in the western world. Cars, airplanes, toasters and so on into material infinity, every damn thing we use, wear, eat, drink (except water up to a point) is the product of the private sector and more to the point, capitalism.

If 'enough' became the law via the tax code, we would unemploy millions overnight. Private airplanes, high end cars, second and third homes, homes of certain size, all kinds of luxury items which have multiple layers of suppliers, assemblers, manufacturers, etc would be out of business because 'enough' is a limit on what people can make and therefore, what they can buy.

There would be no new industrial or other innovations. Who would ever have the vision and be willing to execute on the next Microsoft if the rest of us take away everything they make over X amount?

And, really, why does anyone give a shit how much someone else makes?

Does anyone believe that the money I make is money I take away from someone else? Who did Bill Gates and Warren Buffet rob to get their billions?

The answer is 'no one.'

The other piece of this 'enough' business is that, if it had been in place 100 years ago, what we think of as the modern world would not exist. Capital formation and investment is the only proven method of producing material goods at an affordable cost. There are no artisanal cars or washing machines or MRI machines. It is the only system that, over time, have consistently delivered progress and innovation.

Capital, however, does not have agency. Only people with the vision and creativity to employ and direct resources make these things happen. Many fail, some don't.

People are, to a degree, fungible. Pretty much anyone can wash dishes. Not anyone can be an oncological surgeon. For those who think oncological surgeons should make less money and care more about their patients, why not get your own ass into med school, take out a fuck load of loans, burn the midnight oil for years and years, go through more years of specialized training and then work for 120K a year--or whatever amount the Council on Fair Compensation for All decides is right for that specific job. Here's another bit of info, not all surgeons of whatever specialization are fungible. Some are demonstrably better than others. As a result, they get paid more. Go figure.

I'm having dinner tonight with a retired orthopedic surgeon. Because of the number of years he trained and the physically grueling nature of orthopedic surgery, he was able to practice only 27 years. His best year was a bit over 500K. He put two kids through college, made thousands of lives better because he was an unusually good cutter but had a limited professional work life because of the time it took to train and the physical limits we are all born with. He was and is a great doctor but he was also motivated by the pay.

In an 'enough' world, why would anyone bother to do what he did?

Part II

In a world of 7 or so billion people, what person has the necessary knowledge to determine how much is enough? Because that is what is under discussion. Whether it's the electorate led by the political class (there's a productive group for you) or some appointed body of Wise People, someone is going to have to make that call. Anyone thinking they have the chops for that job is probably the last person who ought to be doing it.

Part III

This discussion is one of several areas in which the Progressive Left's views are really quite scary. There is virtually no hesitancy in deciding for other people what they can and cannot have, what they must and must not do. All in the name of fairness, of course. With the Progressive Left deciding what's fair. Damn.

[JanieM]

wj's proposal is a broad-brush thought experiment, not likely to be implemented in the real world in any future that's foreseeable.

In regard to almost any topic actually in the news today, I could write this:

This discussion is one of several areas in which the Reactionary Right’s views are really quite scary. There is virtually no hesitancy in deciding for other people what kind of a Dickensian world they must live in. All in the name of liberty, of course. With the Reactionary Right deciding what constitutes freedom. Damn.

Hey, wj, I asked you last night how you can go on calling yourself a Republican with views like these. Now we know the truth: you're part of the "Progressive Left." And that's definitely meant to be a dirty word.

Welcome to the barricades! Did you bring plenty of hats?

[JanieM]

Who would ever have the vision and be willing to execute on the next Microsoft if the rest of us take away everything they make over X amount?

Kind of an amazing view of human nature that no one would ever do anything good or useful without the possibility of getting rich from it. Damn.

[hairshirthedonist]

His best year was a bit over 500K.

Then he probably wouldn't see much of a difference in his tax outlay under what wj brought up and the rest of us are discussing. And I don't think anyone is suggesting that people shouldn't be allowed to reach any income level they want. It's a question of whether they would find whatever additional income worth obtaining under a given tax regime.

You can ignore the actual high concentration of income and wealth going on right now. You can ignore the fact that it wasn't always this way and that things were fine (at least economically, in general) when they weren't. You can ignore the bad sh*t that happened in the particular times in the past when similar concentrations of income and wealth occurred. You can mischaracterize what we're discussing by assuming specifics that would make it unworkable and that no one has put forth.

You can do lots of things.

[JanieM]

1. Sir Tim Berners-Lee

Perhaps the most famous inventor not to earn cash from an invention that fundamentally changed how we see the world is Sir Tim Berners-Lee - inventor of the World Wide Web. The first website was built at CERN in 1991, and from there the internet was developed. But Berners-Lee put no patent on his idea, so was due no royalties. He decided that his invention should be freely available. We thank you, Sir Tim.

https://www.mirror.co.uk/news/top-tens/10-inventors-who-never-made-2646656

I might add, as far as government contributions go:

The Advanced Research Projects Agency Network (ARPANET) was an early packet switching network and the first network to implement the protocol suite TCP/IP. Both technologies became the technical foundation of the Internet. The ARPANET was initially funded by the Advanced Research Projects Agency (ARPA) of the United States Department of Defense.[1][2][3][4][5]

(from Wikipedia)

[bobbyp]

You can do lots of things.

Only if the money is right.

[hairshirthedonist]

For those who think oncological surgeons should make less money and care more about their patients, why not get your own ass into med school, take out a fuck load of loans, burn the midnight oil for years and years, go through more years of specialized training and then work for 120K a year--or whatever amount the Council on Fair Compensation for All decides is right for that specific job. (Emphasis added.)

The bolded part probably wouldn't be necessary if we had a sane public-funding regime.

And, again, no one is trying to decide what income-level anyone can reach. We're talking about at what point people might decide for themselves that the next dollar isn't worth going after, if dollars are what motivates them.

[JanieM]

Albert Einstein

Marie Curie

Charles Drew (AFAICT)

All sorts of things with origins in government work. The NSF hasn't exactly sat on its hands all these years, nor of course has the DoD.

[cleek]

whew. that pile of straw burned really brightly!

[JanieM]

Damn.

[hairshirthedonist]

The notion that there's even a clear line between government and the private sector when discussing something as diffuse as technological innovation is fundamentally wrong. It's like arguing about whether runners use oxygen or their legs.

[Priest]

Deferred income in sports contracts is nothing new. Bobby Bonilla has not played baseball since 2001, but the New York Mets are paying him $1,193,248.20 every July 1st through 2035.

http://www.espn.com/mlb/story/_/id/16650867/why-mets-pay-bobby-bonilla-119-million-today-every-july-1-2035

[bob mcmanus]

There is a strong case to be made, apologies if wrong but I think Yglesias plays with it, for not taxing the rich at all. A combination of MMT and very high taxes on the 99%, distributed by the state in the form of goods and services (free healthcare, free college...NOT checks, tax breaks or credits) will create a public independent of the 1% and a self-sustaining economy with just enough 1% investment to fund innovation and growth.

Marxist rule #2*: Labour makes capital.

Keynesian or Kaleckian reformist corollary:

Jobs, wage-share create investment.

*Marxist rule #1: People gather together, eat,do drugs (coffee, alcohol, sugar), listen to music, flirt and flatter, and talk shit. Someplace in between gossip and jokes work gets done for capitalists.

In the gathering and bullshit history happens. Ain't no stopping it, no point encouraging it.

The historical materialist looks to where the conversation is most intense and does not try to for instance force it onto a factory floor.

[Ugh]

I note wj does mention a close to 100% marginal tax rate in the post.

[bobbyp]

In a few decades, we could be where Japan is now.

It's no longer off the eastern shore of Asia? Where have they put it? And if we are going to be in the same place, I'd like to know what the weather is like.

[wj]

Who would ever have the vision and be willing to execute on the next Microsoft if the rest of us take away everything they make over X amount?

My observation, having been in IT for some decades now (including working at a couple of start-ups) is that lots of people would. In addition to the examples already offered, you might consider the enormous amount of time and effort that goes into "open source" software. That is, software that is made publicly available, and which anyone can download and use without charge.

Not to say that there aren't those who are motivated primarily by the possibility (although anyone in the business knows that the odds are quite poor) of getting rich. But that's probably not the majority, let alone a substantial one.

And as for the next Microsoft, there are other operating systems out there. (Many, but not all, based on Unix.) Microsoft's dominance is based on great marketing, not on exceptional technology.

[wj]

Just one other small FYI. You know how critical the Internet is to moddern economies. Janie mentioned its origins in a US government project. What you may not know is how it is managed today.

All those protocols that Janie mentions, and more besides (including the security protocols) are created entirely by volunteers. The IETF, which provides what management structure there is, makes its decisions via "rough concensus" -- the folks who happen to me in the room hum (rather than vote or something) and that's how decisions get done. And nobody gets paid based on the work that they put in.

[McKinneyTexas]

You can ignore the actual high concentration of income and wealth going on right now. You can ignore the fact that it wasn't always this way and that things were fine (at least economically, in general) when they weren't. You can ignore the bad sh*t that happened in the particular times in the past when similar concentrations of income and wealth occurred. You can mischaracterize what we're discussing by assuming specifics that would make it unworkable and that no one has put forth.

When were those good times? Are you saying there was a time when the average person was better off than the average person is today? As opposed to there being a larger gap today between the average person and the top tier than at some point in the past?

Do normal people give a damn how much money someone else has? Why the interest in capping what someone makes or can keep? To what end? Do people really think that if one person makes less then someone else makes more?

We're talking about at what point people might decide for themselves that the next dollar isn't worth going after, if dollars are what motivates them.

I see no practical difference. You are using the tax code to decide how much of what someone earns they can keep. Once you decide that, in addition to imposing what is effectively a cap on earnings, you limit the amount of capital that can be accumulated and invested, in addition to taking away the very incentive to do something large.

The NSF hasn't exactly sat on its hands all these years, nor of course has the DoD.

Nor did anyone say otherwise. Read what I wrote. Conceiving of an MRI machine, building the first experimental model, all of that may well have been done at a hospital or through governmental grants (but odds are, more likely as a DOD spin off), but there are millions of us and only one experimental machine. Someone had to put together the money to build a bunch of MRI's and to gamble that there would be enough of a market to cover costs and make a profit. Ditto TV's, razor blades and toilet paper.

The notion that there's even a clear line between government and the private sector when discussing something as diffuse as technological innovation is fundamentally wrong. It's like arguing about whether runners use oxygen or their legs.

You are confusing innovation and production. Converting theory into commercially available reality is the point here. Capital, i.e. excess money available for investment in the hope of generating a return commensurate with the risk, is the only proven method of producing virtually anything. Capping income via confiscatory tax rates because someone decides what is 'enough' brings all of that to an end.

Capital doesn't necessarily invent stuff, but inventions alone don't do anyone any good unless they can be converted into something accessible. That's what capital does.

Please note: I am not saying the process is pretty, that it is perfect, that it is benign or that it doesn't produce its own share of problems. It is, however, essential to past, present and future progress and maintaining was reasonable standard of living.

[McKinneyTexas]

And as for the next Microsoft, there are other operating systems out there. (Many, but not all, based on Unix.) Microsoft's dominance is based on great marketing, not on exceptional technology.

And yet, Microsoft dominates. But leave aside software per se. The industrial base that is an essential condition precedent to the internet and a computer based society is the end product of 6 decades of post WWII, capital-driven investment. The composites that make up the computer screen I'm looking at right now didn't exist 30 years ago, or if they did, they were so hugely expensive, they were inaccessible to normal people. It was only through the market that costs were driven down by innovation and competition.

Impose caps and all of that goes away. But regardless. Even if income caps were somehow societally-neutral, why screw with other people? Who has the right to disapprove of what someone else makes if they want to work hard enough, of if they have a good enough idea?

[wj]

It was only through the market that costs were driven down by innovation and competition.

Impose caps and all of that goes away.

I may have missed something, but I don't see much support here for eliminating the market.

The market does drive some innovation. But anyone who has worked in a large company can tell you that getting agreement to implement an innovation is a HUGE effort. Implementing an innovation that a competitor has proven out already? Sure. But being first? Not so much.

And I'm missing the link between high marginal taxes on extremely high individual incomes and disincentives on companies when it comes to innovation. Or are you arguing that companies would stopp competing if CEOs couldn't become multimillionaires? (Might want to ask the Count if his baseball team competes. Even though none of them are getting rich off their efforts.)

The fact is, money isn't necessarily the only driver of innovation and competition. (I confess that I'm not familiar with the law as a business. Perhaps things are different thete.)

[Tony P.]

If you are one of the fat-dumb-and-happy 9.9%, e.g. a successful lawyer or a dedicated orthopedic surgeon, you can easily fool yourself into thinking that you are not "working class". Even though "working" is what you do to earn your comfortable living, you can fall into the error of identifying with the 0.1% despite the fact that they can buy or sell you 10-100 times over. You might even imagine that any discussion of "enough" is a commie plot against you.

But let's get down to brass tacks.

McKinney: Do people really think that if one person makes less then someone else makes more?

No. But there seem to exist people whose idea is that if someone else makes more, their own fortune becomes worth less. There's some truth in that. "Rich" would lose its cachet if janitors and lettuce-pickers could afford to eat at expensive restaurants or buy the services of top lawyers and orthopedic surgeons.

McKinney: Capital, i.e. excess money available for investment in the hope of generating a return commensurate with the risk, is the only proven method of producing virtually anything.

What the hell is "excess" money? Is it money over and above what is "enough"?

Anyway, is there a difference between "capital" and concentrated "capital". If working people like janitors, lettuce pickers, lawyers and surgeons (with their subjective but finite notions of "enough") could save up some money, would that money NOT be "capital" available to be pooled into promising enterprises?

McKinney: Who has the right to disapprove of what someone else makes if they want to work hard enough, of if they have a good enough idea?

This is the working-class view of how the super-rich generally get to be super-rich. What was Paris Hilton's "good enough idea"?

--TP

[JanieM]

What the hell is "excess" money? Is it money over and above what is "enough"?

LOL.

[hairshirthedonist]

Supply-side dogma will never die, no matter the empircism to the contrary. What I think we’re saying here, many of us at least, is that a thousand millionaires would be a lot better than one billionaire.

[wj]

What was Paris Hilton's "good enough idea"?

The obvious answer: Being the great granddaughter of Conrad Hilton. (Wonder why more people don't choose to do that...?)

[Michael Cain]

I would suggest that this depends on what levels of wealth would be taxed and how much. Perhaps those would depend on some small number of life circumstances, possibly addressing your concerns.

Indeed, such details might address the concerns. I haven't seen any yet. I'll also point out that one good-sized chunk of our wealth is already taxed -- the property tax bill on our house is larger than our income tax bill now that we're retired and sufficiently old.

Myself, I would like to see a progressive consumption tax in place of an income tax. The government(s) already collect almost all of the information to do that.

[liberal japonicus]

Sometime back, I did a drive-by to the effect that 90% of the equipment for LJ's prostate cancer treatment (I think that was the context) would be the product of the private sector, which Russell pronounced to be 'horseshit' and now we have WJ opining that there is a point at which any rational person has enough.

Just for reference, the comment is here
http://obsidianwings.blogs.com/obsidian_wings/2018/01/your-obwi-hospital-report.html?cid=6a00d834515c2369e201b7c94583fd970b#comment-6a00d834515c2369e201b7c94583fd970b

1. Virtually every device and medicine used in modern medicine is the product of free enterprise and the profit motive.

It's good that you've now limited it to 90% and my prostate cancer treatment. I still think it is debatable, but it is always good to see you soften a claim. I just wish you could maybe start off with the softer version rather than try to draw people out with the outrageous statement and then backtrack. As everyone's mother used to say, it's great fun until someone gets an eye poked out...

[Pro Bono]

A couple of observations on motivation, apropos of nothing in particular:

1) In my peak earning years, I was paying tax at 52 pence in the pound on my marginal income. The first 50p I didn't begrudge the government, but the last 2p (which was called 'National Insurance') I thought a bit rude.

If there were occasions when I went home to my family rather than earn more money for the chancellor to waste, I regret that not at all.

2) When my wife got sick, I quit, because I didn't really need the money but I did need the time. So high pay caused me to work less, not more.

[bobbyp]

So high pay caused me to work less, not more.

Per the concept of diminishing marginal utility, that's how it is supposed to work.

[bobbyp]

Myself, I would like to see a progressive consumption tax in place of an income tax. The government(s) already collect almost all of the information to do that.

I could go along with this. However, other public policies we have adopted concentrate incomes and the associated wealth and political power in a very small slice of the population....wealth to such levels, that actually spending it on 'consumption' is simply not possible.

So we either change these policies (my preference) or levy taxes on the concentrated wealth and income (huge incentive for political corruption & creating the tax avoidance industry).

If you want a list, I'd be happy to oblige in a drive by response!

[jack lecou]

When were those good times? Are you saying there was a time when the average person was better off than the average person is today?

Depending on how you count it*, very possibly.

There are various non-GDP based (or not-primarily-GDP-based) measures of median national well being. Many of those peaked as early as the early seventies.

This is remarkably consistent with other observations about the subsequent period. E.g., stagnant wage growth, the fact that people born in the 80's or after face more precarious situations in all kinds of ways, are expected to be unable to accumulate anywhere near as much lifetime wealth as their parents, etc.

----
* I simplifiy, but it often sort of comes down to whether you consider cars with airbags and cell phones with the latest facebook app loaded to be an acceptable tradeoff for, say, homeownership and a secure pension plan. They probably aren't, and it's kind of a false dichotomy anyway. Contra, well, yourself, there's not actually any evidence whatsoever that an 80% marginal top rate would have resulted in a world without iphones.

[jack lecou]

Do normal people give a damn how much money someone else has? Why the interest in capping what someone makes or can keep? To what end? Do people really think that if one person makes less then someone else makes more?

Nobody really cares what anybody else makes. There's a certain sort of person who always cries 'jealousy' whenever anyone dares to suggest that maybe the ultra rich could afford to pay a little more taxes or whatever, but that's obviously a red herring of an argument (if not simply projection...). I'm sure you'd never take that tack!

So that leaves your basic question of why. I thought this was pretty well covered in the OP and some of the comments above the point where you came in, but let me hit some of the high points as I see them:

1. Redistributing money from someone who literally has more than they can put to any practical use can nevertheless be great help in providing important things for people who have less, and thus make the average person better off (see the above about how on average, Americans have not been getting better off - and very possibly have been going backwards - for several decades).

This was, I think, the main thrust of the OP. And it's an extremely salient point.

2. The valorization of accumulating wealth for its own sake has an incredibly distorting effect on the arrangement of society.

It's bad enough when a CEO gets a 10 million dollar bonus for doing a job not demonstrably any better than any of his/her peers could, while an adjunct professor somewhere supplements their grocery budget by literally prostituting themselves out of the car they are forced to live in because their below-poverty-level teaching salary can't even buy them an apartment in a mid-western college town.

What's even worse is that our society has come to deem the former's utterly pointless -- and possibly more than a little pathological -- pursuit of another million or ten as not only somehow admirable, but possibly more worthy and admirable than the professor's passion for learning and teaching.

Money has become not just a scorecard in our society, but the most important scorecard. Maybe the only scorecard.

This is, without overstating in the slightest, a deeply insane path to go down.

3. (or perhaps 2a): this applies to businesses and business-people too. When I mentioned doing a job well and producing a quality product, I didn't have in mind 'artisanal pocket watch making' or whatever - which is possibly the impression you had.

No, I meant even actual, bona fide, major industries.

Imagine businessperson A who builds an enterprise around a product they know and care about. Who makes sure that everything they sell is of a high quality, that their customers are happy, that their employees are well-compensated and leave work with a sense of accomplishment.

Well, businessperson A is obviously an idiot.

Because it's all about making money don't you know. Businessperson B would never be such a sucker. For one thing, they'd never bother to build a business in the first place -- they'd buy it from a sucker like A, or better yet, one of A's cheaper competitors. Then they'd sell off any valuable assets, branch off into more lucrative lines of business like financing shopping malls or something, burn the pension plan to the ground, cut compensation, job training, and coffee breaks because who cares about workers or turnover costs, and anyway, the old line of business isn't anywhere near as profitable as the new divisions, so it'll need to be offshored somewhere cheaper if it's to stay around at all... And, well, you get the idea. It'll all be fantastically profitable for a couple of years, and the shareholders will love it. Then it can be sold on to businessperson C, who really knows how to make money off the former shell of something that actually did something real once...

4. There is an actual social cost to wealth concentration. I don't think anyone has mentioned this yet, but it's certainly out there in the 'literature' as it were.

Simple analogy: imagine our society and economy is like a pizza pan with a bunch of little marbles or ball bearings happily rolling around on it. We roll and bounce around in our little circles, going about our business. Then along comes a smart ass marble who figures out how to grow bigger. Like, exponentially bigger. Pretty soon, we're not all just rolling around in our own little way -- we're all stuck in one corner of the sheet, involuntarily nuzzled up against Mr. Fat Marble and the giant dent he's pressing into the pan.

Note that the little marbles being dissatisfied and wanting to fix that situation nothing to do with wanting to be bigger marbles our, or thinking that Mr. Fat Marble has necessarily stolen any mass from us. The dissatisfactoriness exists quite independently of jealousy or any fixed-size-pie fallacy.

[Michael Cain]

I would suggest that this depends on what levels of wealth would be taxed and how much. Perhaps those would depend on some small number of life circumstances, possibly addressing your concerns.

Indeed they might -- if someone had said something beyond "tax wealth". I will point out that in our current situation, the largest single tax bill we pay is already a wealth tax -- property taxes on our house. That's saying a lot. This is a state where increasing tax rates (eg mill levies) requires a vote of the people, and where residential property tax collections are pretty sharply controlled relative to total property taxes.

[hairshirthedonist]

Michael Cain, I live in New Jersey. See my comment in response to wj’s about wealth taxes being a one-shot deal. We both know property taxes are an annual (or quarterly, really) occurrance. Mine are in excess of 10% of my pre-tax household income. I know from property taxes.

[CharlesWT]

1. Redistributing money from someone who literally has more than they can put to any practical use...

I suspect that very, very little of the money of the very rich is residing in mattresses doing nothing. Instead, it's in checking and savings accounts, stock, bonds, venture capital, etc. where it's being used by others to create products and services, jobs, increasing the sum total of wealth.

The question then becomes one of opportunity cost. Can the government create a net positive benefit by taking the money away from its owners instead of leaving it in the private sector?

[russell]

I did a drive-by to the effect that 90% of the equipment for LJ's prostate cancer treatment (I think that was the context) would be the product of the private sector, which Russell pronounced to be 'horseshit'

I ask one and only one thing of the commentariat: do not mischaracterize things I say to make your own points.

stand on your own two feet, please.

your claim was not limited to "the equipment for LJ's prostate cancer treatment", it extended to virtually all medical advances.

which was, and is, horseshit.

tell lies if you like, don't enlist me in them.

[hairshirthedonist]

Can the government create a net positive benefit by taking the money away from its owners instead of leaving it in the private sector?

You mean leaving it where it is in the private sector, rather than putting it somewhere else in the private sector, perhaps even after putting it where it was in the private sector to begin with.

Hey, where did Lockheed get all this money, anyway?

On another note, I’ve decided that my property taxes are only as high as they are because people with less-valuable houses are jealous of me.

[russell]

Kind of an amazing view of human nature that no one would ever do anything good or useful without the possibility of getting rich from it

indeed.

people do things for all kinds of reasons. sometimes they're motivated by money, sometimes they're not.

most people, by far, are happy to make enough that they can live a basically comfortable life and not be in peril of financial disaster.

a small number of people are driven to accumulate much more - more wealth, more stuff - than they can make any practical use of. i.e., their basic quality of life is not significantly improved by it.

i frankly don't give a crap how much people make. live your life. i do care that so much of our public policy is focused on enabling the accumulation of ridiculous amounts of money, and i do care that people with great wealth are in many ways "more equal" than the rest of us in areas of public life.

and for what it's worth, capitalism, with it's insistence that capital be a privileged factor of production, is not a requirement for a market economy, nor for that matter for capital formation.

[Tony P.]

CharlesWT: Can the government create a net positive benefit by taking the money away from its owners instead of leaving it in the private sector?

This question is not stupid. It IS ill-posed. One might say it's not EVEN stupid.

Where to start?

First, no substantial chunk of wealth (denominated in "money") can exist without "the government". I mean, if you own a piece of real-estate and would like me to pay you money to build my house on it, how can you force me to? Duels having fallen out of favor, I say you'd have to convince The Government that you own that land, by virtue of some title document filed in some Registry of Deeds. If you own a factory and hire me to run it, what forces me to operate it for your profit instead of my own, aside from the fact that you can show The Government records that demonstrate you (and not I) paid for that factory? Your "wealth" (or anybody else's) consists entirely in the fact that The Government knows about it and acknowledges its ownership.

Second, it's hard to know what "instead of leaving it in the private sector" means. What exactly can The Government do with "money" other than spend it in "the private sector"? I mean, even if it takes your money and mine and hires vast armies of civil servants with it, their salaries become "private sector" money the minute they cash their paychecks. When a bureaucrat buys a coffee at Dunkin Donuts she is making a private-sector transaction the same way a coal miner or an investment banker would be doing. When The Government buys a highway, an aircraft carrier, or a month's groceries for a million indigent people, in what possible sense is the money not spent in the private sector of The Economy?

[wj]

My property taxes are in excess of 10% of my pre-tax household income

I wouldn't be surprised if that's true for many of us in the 9.9%. But I strongly doubt it applies to the top 0.1%. At that point, most wealth isn't in real estate. Except, perhaps, as an investment, versus a place to live personally.