51–60 of 1001 posts
As others pointed out, equity returns are 5-6% so if you do something with your money this won't be the case and you'll actually increase your wealth a lot.
Assuming 5% return, this is an 18x return over 60 years.
What we need is inheritance tax. If you've made money, you can keep it. But you can't live for free just because some guy 100 years ago made money and you won the genetic lottery.
Would anyone else go for a deal like that?
Yeah, if you don't work or even invest and do nothing for your whole entire life, while sitting on a pile of cash larger than you could ever use (and note: we specify you are NOT USING IT) you could end up dying (in a presumably stable society that hasn't itself killed you) sitting on a pile of cash only half larger than you could ever use (and we specify that you are NOT USING IT). So persuasive. Gee, I'm really con…
You might be suggesting a tax on liquid cash, which would target way fewer people.
For a guy who's always railing about the value of honest, rational discourse, he's unbelievably misleading and political in this post. He ignores asset growth and the fact that all the wealth tax proposals have a very high floor for the tax. Saying the government will take 45% of your wealth above $100M is very different than saying the government will take 45% of your wealth.
>"Even a .5% wealth tax would start to keep founders away from a state or country that imposed it. That's more than a quarter of your stock."
The wealthiest top 0.1 percent is fewer than 200,000 families. source:
> Warren would put a 2 percent tax on every dollar of net worth above $50 million and a 3 percent tax on every dollar of net worth above $1 billion.
https://www.wealthypersons.com/paul-graham-net-worth-2020-20... https://www.politifact.com/factchecks/2019/jan/31/elizabeth-...
IMHO wealth tax is not optimal way to distribute wealth, but it's not as pad as PG tries to make it.
This ignores the fact that everywhere (including countries where wealth taxes are implemented today), there is a floor below which the tax does not kick in.
I’m still not sure why the debate has converged around a wealth tax rather than just making the income tax rate on every dollar above $1 billion 100% (or close to 100%). That way, on the day that the super rich decide to liquidate their assets, they only get taxed on the capital gain, and for billionaires that means they only keep some small portion of it in liquid cash. You also wouldn’t have to amend the Constituti…
Equity returns are on average 6% above inflation, so with a wealth tax of below 6% your wealth can still grow year on year indefinitely. EDIT: Source: https://www.frbsf.org/economic-research/files/wp2017-25.pdf . The precise number is real returns of 6.89% on equity, 7.05% on housing
PG is talking about investing in companies, not general funds. For a founder to invest (eg., $1m) in starting a company, there is of them losing their total investment. The expected ROI needs to be fairly high to offset that. The only people who /could/ make money under such a scenario are super-rich investors making many bets that average out risk. And they wouldnt, given -- as you say -- general equity would perfor…
Do you mean founder, or investor? I don't know any founders who invest that much into their startup.
Startups are high-risk, high-return investments. If a wealth tax was introduced, wealthy people would need higher returns (as others have pointed out) to cover their tax obligations and so would invest in riskier investments. Like startups. So startup investment would increase.
Wealth should be taken into account when income tax is calculated. It's not fair that someone who earns 100k with no assets pays as much tax as someone who earns 100k but also inherited a 1mn house and has a whole load of cash reserves from not paying rent/mortgages for years. It's doubly not fair when the wealthier individual can divert most of their salary into a pension and not pay tax on it, because they can affo…