Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Modeling a Wealth Tax

paulgraham.com

Post reply on HN
Print view View original

271–280 of 1001 posts

Re: Modeling a Wealth Tax

#271

Post by eanzenberg »

troughway wrote: post #252
andrewtbham wrote: post #238

Earlier quoted context omitted.

You're cherry picking. France imposed a wealth tax and they repealed it. "At least 10,000 wealthy people left the country to avoid paying the tax; most moved to neighboring Belgium" https://www.bloomberg.com/opinion/articles/2019-11-14/france...

Not to derail the topic but “taxing the rich” was one of the bullet points that was supposed to answer where the money for a UBI system would come from. This is exactly how globalization will impact UBI as well, because at the end of the day the manufacturing firms, big corporations and everyone else who is vested in making money will uproot and go elsewhere, where they won’t be taxed so harshly. And just to add, tha…

I believe UBI zealots moved passed trying to explain how to fund it and now don’t really care.

Re: Modeling a Wealth Tax

#272

Post by yalogin »

czbond wrote: post #202

Unpopular opinion: Near 50% of American pay ZERO tax whatsoever. The top 10% of all Americans pay 69% of all taxes currently. This is a point 'left out' of current discussions. How about instead of increasing entitlements and stealing more from people that created wealth - we lower the size of the government spending UNTIL it matches where most people pay for the services received in a more scaled manner. https://tax…

This is just a political distorted stats view of the reality. It doesn’t help encourage discussion. You very well know that the wealthy pay a larger share because they own the larger share of the wealth. The 50% pay zero as you claim because those poor suckers don’t even own enough to qualify for the tax bracket.

Re: Modeling a Wealth Tax

#273

Post by carlob »

gabaix wrote: post #48

Thomas Piketty's Capital in the Twenty-First Century advocates for a wealth tax of up to 2%. This is the only remedy to combat the structural rising inequality in capitalism. He also admits the tax would be difficult to implement. He should know. France wealth tax has existed for more than 30 years. It was not a success, in part because the wealthy found ways to avoid it. It was as simple as moving residence to Belgi…

His newest book goes much further, if you read Capital in the XXI Century you should give it a try.

My takeaway from this blog post and his book is that:

1. we should have way more transparency on who owns what: currently information about who owns what stock is in the hands of private companies and it's not disclosed to the public. One of the effects of having an income tax is that we have very detailed information about income. I would argue that measuring inequality is a good thing for a society.

2. we really really need to stop fiscal dumping and fiscal competition among countries. There are a number of ways to do that: stronger transnational organizations, more transparency and collaboration among countries (like what the US imposed to Switzerland), exit taxes (proposed by the US)

Overall pg's post ignores the fact that 1950-1980 saw the largest growth and the highest income and succession taxes in the US (also in Western Europe, but one might argue that reconstruction might have played a role in this)

Re: Modeling a Wealth Tax

#274

Post by leetcrew »

mrfusion wrote: post #52
LatteLazy wrote: post #23

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.

I’d gladly pay 100% inheritance tax on exchange for zero taxes during life. Would anyone else go for a deal like that?

interesting idea, but I think I would decline. I don't plan on having children, but I would like the primary beneficiaries of my excess productivity to be my friends and family. plus, I think it sets up a weird incentive to spend as much of your money as possible before you die, which causes a big problem if you live longer than you planned.

I actually think the current US estate tax rules (minus the loopholes) are pretty reasonable. you get to pass on $10mm or so to your beneficiaries untaxed, but any wealth past that is subject to a steep tax. if you remove the basis step-up for assets and somehow prevent super-wealthy people from avoiding the tax altogether, I think it would be a pretty good system. enormous estates would decay quickly through the generations, but ordinary to upper-middle class folks could still leave their life's excess productivity to people they care about.

Re: Modeling a Wealth Tax

#275

Post by 54mf »

Being an expert in one domain (pg: startups, presumably) doesn't make you an expert in all domains (finance, tax systems). I'd be more interested to hear from someone who true expertise, as opposed to a guy terrified of losing a small fraction of his wealth.

[Edit] "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."

Oh, the horror of only keeping ~75% of your wealth, at the expense of supporting the society that made your wealth possible. The horror.

Re: Modeling a Wealth Tax

#276

Post by IkmoIkmo »

sethbannon wrote: post #102

Let's look at what a 1% US wealth tax would mean for Jeff Bezos. He founded Amazon 26 years ago. A 1% wealth tax means he keeps 99% of Amazon stock each year. .99^26 = .77 = 77% So he'd currently be worth $145B instead of $188B. PG is saying Bezos would have left the US because of that? Edit after twitter conversation with PG: He doesn't believe Bezos would have not started Amazon in the US if there was a wealth tax.…

> He doesn't believe Bezos would have not started Amazon in the US if there was a wealth tax.

Did he elaborate? That seems like such a joke to me. Denying yourself access to the world's biggest market because, if you make it big, you'll only have $145 billion instead of $188 billion...

Although it is interesting of course that Amazon was founded/located right from the start in part on a tax optimisation. I can imagine say a French entrepreneur may choose to incorporate in Germany to launch his EU startup (though even here, extremely skeptical) based on a (hypothetically) better personal tax system. But skipping the US? Highly improbable.

Re: Modeling a Wealth Tax

#277

Post by learc83 »

andrewtbham wrote: post #238
thomasdullien wrote: post #93

Perhaps notable: Switzerland has a wealth tax (of up to 0.3%), and there is zero evidence that this has any deterrent effect on wealthy people settling in Switzerland or startups being created in Switzerland. Other features of the tax system more than offset the 0.3% wealth tax. Personally, I am a bit disappointed by the lack of depth of the discourse: Wealth taxes and their effect have been studied quite a bit in ec…

You're cherry picking. France imposed a wealth tax and they repealed it. "At least 10,000 wealthy people left the country to avoid paying the tax; most moved to neighboring Belgium" https://www.bloomberg.com/opinion/articles/2019-11-14/france...

1. The French income tax and wealth tax was extraordinary high.

2. France is part of the EU, there are dozens of countries that French millionaires can move to with almost zero friction.

Moving to neighboring Belgium is like moving from New York to New Jersey.

Re: Modeling a Wealth Tax

#278

Post by nybble41 »

wycy wrote: post #184
smileysteve wrote: post #134

I agree with Paul here; A Wealth Tax adds a seemingly arbitrary additional rule that is based on less than liquid assets; It also adds significant complexity to the system. Versus, a progressive income tax is less arbitrary and less "complex" (though many people do not comprehend the concept.) To take the simplicity further; we should eliminate capital gains and qualified dividends special tax rates coordinated with…

There's nothing wrong with a tax on non-liquid assets. We already have taxes like that: property tax.

Property taxes are routinely pointed out as examples of highly regressive taxes which cause numerous issues for those who can least afford them.

Re: Modeling a Wealth Tax

#279

Post by awb »

bhupy wrote: post #157
another-dave wrote: post #108

Earlier quoted context omitted.

Exactly — I've always thought that what drives multi-millionaires and billionaires isn't really the monetary value of the extra money that they make. To the extent they care about money at all anymore, surely it's only as a relative measure of success? I can't see many people that have already accrued personal wealth of $50M but choose to keep working suddenly being turned off because of a wealth tax.

> I can't see many people that have already accrued personal wealth of $50M but choose to keep working suddenly being turned off because of a wealth tax. That's not the argument. If you accrue a wealth of $50M because you own half of your $100M company (or 100% of your $50M company), then a wealth tax will — over time — force you to give up ownership in your own company. An income tax or a capital gains tax on the ot…

> If you accrue a wealth of $50M because you own half of your $100M company (or 100% of your $50M company), then a wealth tax will — over time — force you to give up ownership in your own company over time.

Why? There's a floor that below $50M you don't need to pay a wealth tax. In a worst case scenario where your entire wealth is tied up in stocks of a single company you own and you have 0 cash to pay your wealth tax, your ownership gradually approaches $50M.

They're are very few people who end up controlling 50+% of a $50M+ company at 20 and keep their 50+% stake for the 60 years pg references. Anyone who did that didn't take VC money.

Re: Modeling a Wealth Tax

#280

Post by zeveb »

sethbannon wrote: post #102

Let's look at what a 1% US wealth tax would mean for Jeff Bezos. He founded Amazon 26 years ago. A 1% wealth tax means he keeps 99% of Amazon stock each year. .99^26 = .77 = 77% So he'd currently be worth $145B instead of $188B. PG is saying Bezos would have left the US because of that? Edit after twitter conversation with PG: He doesn't believe Bezos would have not started Amazon in the US if there was a wealth tax.…

> So he'd currently be worth $145B instead of $188B.

> PG is saying Bezos would have left the US because of that?

I think most human beings would do most things for $43,000,000,000. Whether they morally ought to or not is beside the point: almost anyone would do almost anything for 43 billion dollars.

Post reply on HN