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Modeling a Wealth Tax

paulgraham.com

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Re: Modeling a Wealth Tax

#411

Post by dodnest »

ibigb wrote: post #399

Would a wealth tax benefit society? It would seem that if an individual was creating wealth, other individuals would be wise and say: "you keep going!" How would it profit society to interfere with the genius who was creating lots of wealth? Perhaps a better way to add richness to society would be to examine the use of an inheritance tax. When a genius wealth producer dies wouldn't it be in society's best interest to…

It's more important to look at why the rich might be a problem than why their money might be useful to us. I know a lot of non-billionaires spend their lives defending them, but there is a case to be made for why their industries and disproportionate social power have been hurting society and a wealth tax is a small way of balancing out wealth inequality which, yes, is a bad thing, and you can do a thorough read of wikipedia if you don't think it is a bad thing.

Re: Modeling a Wealth Tax

#412

Post by zaroth »

dalbasal wrote: post #332
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…

I'm not sure european examples are a great comparison. First, most european wealth taxes (including recently defunct ones) have much lower floors than US proposals. $1m instead of $100m. That changes a lot. France did experience "capital flight," famously Gerard Depardieu. Second, "capital flight" has always been present in Europe. There's a long history of it, and practical realities make it relevant. I do agree abo…

Think about how hard Founders work to efficiently divide up the equity pool of their company in order to entice and retain top talent. Consider that the State and Federal government is already a silent partner to the tune of ~20% of the company profits, and then again ~20% on capital gains. Every little bit more carved out for the government is just reducing the portion left which has to justify the risk/return proposition.

There's another problem which I'm surprised PG didn't address. Liquidity. A wealth tax means valuing property before it's even perhaps practical to sell it, and while the government might take your last 409a valuation as the means to valuing your net worth, they aren't accepting your shares as payment, only cold hard cash.

If you have a large private holding, now you are forced to find ways to throw off cash against that notional value, e.g. by arranging loans against your holdings to pay the tax man. Shares that ultimately never sell could end up being taxed for more then they are ever even worth.

Re: Modeling a Wealth Tax

#413

Post by Zak »

dalbasal wrote: post #332
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…

I'm not sure european examples are a great comparison. First, most european wealth taxes (including recently defunct ones) have much lower floors than US proposals. $1m instead of $100m. That changes a lot. France did experience "capital flight," famously Gerard Depardieu. Second, "capital flight" has always been present in Europe. There's a long history of it, and practical realities make it relevant. I do agree abo…

> One point that PG does address which is often skipped over is that a wealth tax is a "deplete billionaires" policy

It has long been my impression that eliminating or reducing billionaires is the primary goal of wealth tax advocates other than those whose advocacy primarily consists of sharing memes on social media. Raising revenue is largely a red herring.

Re: Modeling a Wealth Tax

#414

Post by damnyou »

rtx wrote: post #236
calyth2018 wrote: post #121

Earlier quoted context omitted.

"the Silicon Valley crowd is strangely avoidant of examining evidence or explaining their opposition with real-world data. It's all 101ism and polemics." It's not strange at all. It's self-interest.

Wealth tax is majoritism and nothing else. And we all know how that ends.

Majoritarianism is bad because it can oppress powerless minorities. The wealthy are not a powerless minority.

Re: Modeling a Wealth Tax

#417

Post by theplague42 »

zeveb wrote: post #280
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.

When you already have another 145 billion? More than you could possibly spend in your lifetime?

Re: Modeling a Wealth Tax

#418

Post by chii »

cowpig wrote: post #223
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…

The wealth tax is aimed at the billionaire class. That class paid less than the working class in taxes last year[1]. [1] https://www.washingtonpost.com/business/2019/10/08/first-tim...

using the effective rate is misleading because by absolute amounts they paid more.

Re: Modeling a Wealth Tax

#420

Post by eanzenberg »

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…

I never understood..what’s the fascination in turning one county into another? We have Switzerland, France, Belgium, Germany. Why force America to become one of these? Those countries already exist. Turning one country into another doesn’t make sense and isn’t what makes America unique.

Imagine I moved to Germany and kept stating “Germany should be more like America because X Y and Z.” Can you imagine how offensive that would be?

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