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Comment by munificent | Hacker News Reader

> What happens when USA taxes billionaires out of existence?

This is a really good question.

I believe the answer is that the USA will be better able to outcompete those countries that do have them. History has shown time and again that massive inequality is a huge barrier to maximizing the productivity of all of a society's members.

It leads to cynism and corruption and breaks down cooperation. It forces a society to spend valuable resources on policing in order to keep the poor taking from the rich. It's just economically incredibly inefficient. You need some level of inequality to incentivize people but once you go beyond that, it's a net harm.

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> believe the answer is that the USA will be better able to outcompete those countries that do have them

Based on what? The US already outcompetes these other countries in business success and average citizen income. What countries don’t have billionaires that are competitive?

> History has shown time and again that massive inequality is a huge barrier to maximizing the productivity of all of a society's members.

History has literally never shown this. This is the first time we’ve had massive inequality while still having a solid middle class. The jury is still out on whether the instability of the past was just because of excessive poverty and no upward mobility or because wealthy people were there.

> History has literally never shown this.

Empirically, this is actually beyond doubt by now. Piketty et al. were in the news 10 years ago with this very topic, showing that inequality is detrimental to growth, for many countries and over very large periods of time. And there has been a bunch of additional studies after that publication that support these findings.

No, that’s not what Piketty showed. I suggest you re-review their work.

There is no evidence about it stifling growth in the US in his work nor any follow-up work.

For every localized case, including critical ones such as the army, historically super rich and powerful people would distort the system.

There are countless examples of rich or powerful and connected people buying officer posts, for example, and meritocracies (= equality of chances) stomping all over these corruped systems.

There's little reason to believe rich people willingly or not, do not distort every market they're in. That's why they become rich, to be powerful.

> History has shown time and again that massive inequality is a huge barrier to maximizing the productivity of all of a society's members.

Has it? Restricting what opportunities individual people are permitted to follow would I assume both reduce productivity and increase inequality, but that doesn't have the inequality being the cause of the lower than theoretically possible productivity.

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