Rich Smart & Isolated: Meet the New Aristocrats

...and I note the article suggests that people be taxed on their IQ!

Good grief! Who is going to do all those IQ tests? Psychologists!!!! Bring it on baby!:D

Fortunately....it will never happen.:)
 
...and I note the article suggests that people be taxed on their IQ!

Good grief! Who is going to do all those IQ tests? Psychologists!!!! Bring it on baby!:D

Fortunately....it will never happen.:)

As was commented, IQ tests are pretty much a sham and only have much correllation with success in ... well ... doing IQ tests. The more IQ tests one does the more one's IQ rises since the common techniques of some questions are rote learned through repeated testing.

However there might be a very tenuous link with academic achievment, which may be linked to career, which may be linked to income, which may be linked to wealth, but each link is so tenuous that in the end it means very little!

I think the comment of testing was made in jest; smart people are able to fudge IQ tests on demand if required (as they can see the faulty assumptions of 'wrong' answers, so they can tick them).

Peter
 
smart people are able to fudge IQ tests on demand if required (as they can see the faulty assumptions of 'wrong' answers, so they can tick them).

Peter
Spiderman....tacky IQ tests can be fudged and certainly fall into the tick and flick category. Certainly the ones I used profesionally do not include "ticks".
 
An interesting account of wealth v's income is the book "The Millionaire Next Door" by Stanley & Danko. (1996?) While this is a USA produced book the information is concerned with real people and comes from 20 years of research.
If wealth building is of interest and you have not come across this book it is worth a read. I have just reread it after 5 years and found it worth a second reading. I don't know if it is still in print but as it was popular some libraries will have a copy. (ISBN 0 7322 6759 5)
 
Sorry wrong ISBN -- should be 0 7322 6753 6 for "The Millionaire Next Door".

(The other number is for a follow up book the Millionaire Mind which I am rereading now more detail but not as readable)
 
If IQ was the sole determinant, maths professors would all be millionaires. Many successful businesspeople did badly at school.

There is no doubt a new professional 'knowledge' class (lawyers, bankers, etc) has developed. Ironically it's because of world trade, which was supposed to make the world fairer as each society does what its good at. Traditional labourers and manufacturing salaries are declining as overseas labour competes with them. Relatively free movement of goods and capital means local manufacturing decreases, while 'knowledge' intensive roles such as lawyers, accountants, bankers, etc to facilitate that trade increases. Foreign exchange, foreign trade laws, international accounting standard, cross-border M&A, offshore stockmarket listings, multiple-jurisdiction tax, etc. World trade has created massive need for people in these areas, with the result that such people are paid more and more while unskilled labour, which is still plentiful, get paid less and less.

All you can say is that the development of world trade means income distribution is actually getting less fair on a local level. Arguably without world trade, incomes in China would be fairer (though almost everyone would be poor) while in the US or Australia, it would be more like the 50's where more people were employed in manufacturing and generally things were 'fairer'.

The only way you can impose fairness (as Japan managed to do during the decades after the war: even now Japanese pay is relatively fair in that income ranges are narrower than in the West) is if government controls wages and curtails world trade. As John Meynard Keynes said, (paraphrasing) a government that insists on equality over freedom ends up with a society that has neither equality nor freedom. Japan is one of the most controlled industrialised societies.

In any case, Australia already taxes the more financially successful (at least when it comes to salary) more than the less so: we have progressive income tax. Of course the truly rich and savvy use trusts, etc to minimise that tax. So all you do is end up taxing the middle class more and more.
Alex
 
An interesting account of wealth v's income is the book "The Millionaire Next Door" by Stanley & Danko. (1996?) While this is a USA produced book the information is concerned with real people and comes from 20 years of research.
If wealth building is of interest and you have not come across this book it is worth a read. I have just reread it after 5 years and found it worth a second reading. I don't know if it is still in print but as it was popular some libraries will have a copy. (ISBN 0 7322 6759 5)

I have issues with that book. Too one-sided, since the 'answers' to questions like 'how to be successful' comes from the interviewees themselves. What's a middle-aged successful businessperson going to say when you ask him the secret of his success? Will he say 'I cut every corner and pushed my partners to the wall and forced my employees to give up their lives for me?' (Might not be a war crime, but hardly what a grandparent and leader in his society wants to be known as, anonymous interview or not).

Naturally he will say 'I treated people fairly and with integrity'. Hindsight is always rosier than reality.

The Millionaire Next Door is an interesting book and well worth reading, but take it with a big dash of salt. It shows a certain type of millionaire, whitewashed by the subjects themselves. You don't have to be like them to be rich, and besides they are most likely glossing over a lot. The thing I most remember about that book is one guy who said he only drinks free beer or Budweiser (for those that haven't drank it, it's crap). Being a tasteless tight-as* isn't the only way of being a millionaire, nor should it be the goal of anyone wanting to be a millionaire.
Alex
 
Interesting comments Alex, almost as if we read different books.

More that I'm reading more behind the people making those comments. I always think about what is motivating them and the REASONS people say what they say. Just because someone SAYS something doesn't mean it's true. I hear too many people tell me things that are clouded by their own misconceptions.
Alex
 
Alex,

I agree. I've always said the majority of tax is paid by the middle level PAYG employee. People earning around $60 - $150K in tax as an employee pays far more taxes than the average business owner with net profits of the same amounts (assuming no psi issues :D)
 
Alex,

I agree. I've always said the majority of tax is paid by the middle level PAYG employee. People earning around $60 - $150K in tax as an employee pays far more taxes than the average business owner with net profits of the same amounts (assuming no psi issues :D)

Exactly. Business owners have more leeway to manage taxable income. Employees who actually make hundreds of k would have structures in place to manage that, and investors will also make use of trusts, companies, etc.
Alex
 
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