Hacker News Reader

Comment by dep_b | Hacker News Reader

I think the golden age of the US lasted between the beginning of the 30's until the end of the 70's and especially that period was a time of higher taxes for the rich and a rapidly growing middle class. With the current lack of well paying middle class jobs together with high barriers for studying for the jobs that do poor people don't really have a chance to emancipate like they did until the 80's: work hard, earn enough money to send your kids to university and see them doing better than you did.

View on HN

It’s really hard to draw any conclusions about the 1940’s to 70’s “golden age”, since during this time, the US was the only intact industrial power in the world. Of course this was very profitable, and it was a situation in which American workers had a lot of power. It’s unclear whether taxes had much to do with anything at all.

Well considering, in the past, the the only way to wage war was to pay for it with increased taxes (ie, prior to deficit spending). So high taxes and being the only industrial power are correlated due to the US winning the war.

> between the beginning of the 30's

Yeah right. [1]

[1]: https://en.wikipedia.org/wiki/Great_Depression

Much of the 70's wasn't too great either.

The Great Depression lead to the rules that made the US prosper in the decades after. The Great Depression is the start of a long increase.

According to Piketty, Nixon suppressing the inheritance tax lead to more money and power hoarding and generational partial reshuffling stopped.

There is undoubtedly more to the end of this golden age but it's a credible factor.

> that period was a time of higher taxes for the rich and a rapidly growing middle class

Tax revenue as a fraction of GDP is flat since the 60's, and the fraction of tax revenue paid by the top 1% was much lower in the 60's than it is today.

Effective tax rate is more important than overall tax percentage here. Remember, the rich keep getting richer. the share of income going to the top 0.1 percent of the income distribution "was around 2.5 of total income in the 1970s and reached a peak above 9 percent of total income in 2000

Anyway, in 2020 payroll taxes make up 1340 billion vs 1620 billion in ‘income taxes’ and 221 billion in corporate taxes. So, overall talking about the percentage of income tax paid by the rich is misleading. https://www.usdebtclock.org/

Largest difference is the vast reduction in corporate taxes and the explosion in payroll taxes. https://www.nbcnews.com/id/wbna29861648. But, critically the burden wasn’t handed to the top 0.01% but rather the top 20% as payroll taxes have a cap.

Sure - if you concentrate a higher proportion of income into fewer people, you would hope the tax burden should follow that income redistribution.

> fraction of tax revenue paid by the top 1%

So you're saying that the rich have gotten so massively richer that despite the ridiculously low taxes, which they often manage to evade as well, their overall contribution is still more.

> was a time of higher taxes for the rich

Correlation vs. causation. The sources I've seen all have said that no one of the rich paid those high taxes, and the same will happen when Biden and his gang will attempt to increase taxes now. There will be loopholes and a million other things the rich can use to reduce taxes.

The problem lies elsewhere, but no one seems to discuss it. It's not for no reason that Islam, Judaism, and Christianity prohibit lending money with interest. We look around us and see a debt heavy and debt ridden society, because it's easy to lend money with interest. The modern usurious economic system is inherently going to favor the rich. Ban interest and other usurious immoral and parasitic practices (e.g. stock shorting) and things will improve quickly.

How the hell is Europe getting by with their high social welfare and limited high knowledge industries (tech)?

They must have wildly different expectations. Do they all expect to be a homeowner and have a nice salary? Our expectations might be out of whack in the states.

> Europe [and their] limited high knowledge industries (tech)

Huh, where’d you get that idea?

Their salaries suck. I would love to be told I’m wrong about this, and that parts of Europe are up there with tech hubs like NY and Cali.

The same global companies exist in both places, for example Facebook Dublin: https://www.irishtimes.com/business/technology/facebook-irel...

Even within the US, it's been the case up until 2020 that the premium for having a worker in SF or NY was absolutely huge. Now that everyone has been forced to manage over Zoom for a bit, is that sustainable? I genuinely don't know.

(I have a 97th-percentile UK salary living in Scotland from an employer based in Austin, but that still probably doesn't compare to SF numbers)

California tech hubs are not a common US thing either. There's only one silicon valley and it comes with its own numerous issues. The actual cost of living and services is also very different. Pointing just at the salaries in SV won't give you a good comparison. (In the same way that pointing out lack of them in Broken Bow, Nebraska doesn't make the US as a whole bad at tech)

Contracting salaries are much more similar. Not the same, but in the same ballpark. The ability to fire people easily, less holidays and less perks leads to higher salaries in the US but contracting jobs pay relatively bad.

The US is a lot bigger than just NY and SF/LA. Further, there is a tremendous amount of poverty and near-poverty in these cities as costs like housing continue to rise. It is a great setup for software engineers at top companies being paid hundreds of thousands. It is less good for the restaurant chef or the retail worker or the car mechanic.

Regular reminder that Europe is huge and diverse, just as the US contains both extreme wealth and extreme poverty. It also has a lot of tech industry in it, just not high-visibility names that dominate the Internet discussion of "FAANG".

It's not so much that everyone expects to be a homeowner as that it's easier to have a nice life without being a homeowner in many places. Long-term secure tenancies, acceptable quality social housing, that kind of thing. American housing tends to be much larger, though, unless right in middle of the very densest cities.

The UK is backsliding on living standards and social welfare to the point that UNICEF have stepped in.

Indeed your expectations about Europe are way off.

Reply on news.ycombinator.com