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Modeling a Wealth Tax

paulgraham.com

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Re: Modeling a Wealth Tax

#461

Post by refurb »

sam_lowry_ wrote: post #354
dalbasal wrote: post #332

Earlier quoted context omitted.

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…

Gerard Depardieu and Bernard Arnault returned their assets to France, and their flight was not without scandals. Their reputation shattered.

Did they return their assets before or after the tax was rescinded?

Re: Modeling a Wealth Tax

#463

Post by rswail »

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 France imposed a wealth tax and they repealed it.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…

Is anyone proposing a wealth tax on corporate entities? Not that I've seen.

Firms/Corporations already engage in massive profit shifting to avoid taxation. That's without any corporate wealth taxes.

So why do you think a wealth tax on an individual's wealth would cause corporations to "uproot and go elsewhere"?

Re: Modeling a Wealth Tax

#464

Post by mrlala »

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 argument I would make is that it's a LOT easier to just move to another european country and you are still very close to your home country.

Capital flight in the US is logistically much more difficult than in europe I would imagine.

>"are billionaires bad for the rest of us?" That is the premise of a wealth tax, at least the currently popular one.

I don't think that's very accurate.. the wealth tax is saying "billionaires have so much excess money that they should be contributing on another layer than the rest of the population". While you can ALSO say "there should be no billionaires / they are bad", that is not what the wealth tax does.

Re: Modeling a Wealth Tax

#465

Post by dragonwriter »

pampersluxer wrote: post #454
3pt14159 wrote: post #409

What I want is a tax on wealth gain, even unmaterialized, with a floor based on what you've previously paid. Essentially a capital gains tax as it is implemented in most developed countries but applied to unrealized gains as well. So if your wealth goes from $60m to $100m I want the tax to apply to the $40m delta. If the next year you lose $20m, then make it back the following year, no tax applied. I also want it to…

Taxing unrealized capital gains is incredibly harsh. Basically cuts your yearly returns in half, and that completely destroys your returns over long periods of time (30 years). Out of all the proposals, this seems the most insidious.

Taxing unrealized capital gains (provided you also allow deduction of unrealized losses) is equivalent to taxing net realized gains except in effect on the power people holding large unrealized gains can exercise over society. It doesn't have any effect on net, after taxes returns.

Re: Modeling a Wealth Tax

#466

Post by andrewtbham »

cycomanic wrote: post #370
dalbasal wrote: post #332

Earlier quoted context omitted.

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…

The question if billionaires are bad for society is pretty much the same question as asking if the aristocracy was bad for previous societies. The existence of billionaires clearly undermines the core principles of democracy which is that all people have essentially the same political power. The existence of many laws which clearly aim to benefit billionaires only is enough evidence that this power balance does not e…

Billionaires are good for society. elon musk and jeff bezos are leading the way into space and that is huge for humanity. If you tax them you will literally stop humanity from becoming multi-planetary.

The comparison to aristocracy is absurd. The US was founded abolishing the class system because the wanted equal opportunity, not equal outcome.

Re: Modeling a Wealth Tax

#467

Post by nickalaso »

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…

No offense, but I personally hate it when someone online mentions the existence of scientific research supporting their position, and then doesn't post a link to said research.

I'm personally interested in reading the papers you mentioned, could I get the link(s)?

Re: Modeling a Wealth Tax

#468

Post by O_H_E »

doukdouk wrote: post #376
msoad wrote: post #182

This is pg's privilege to be able to write such a shallow article and get this much attention. There has been so many studies on this topic. There are places with Wealth Tax. France experimented with it and kind of failed. Switzerland has Wealth Tax. None of that was mentioned. Just a 4th grader math and a basic HTML table. God damn it I wish I was VC. Anything I say would be gold. This is pure @VCBrags material

> I actually worry a lot that as I get "popular" I'll be able to get away with saying stupider stuff than I would have dared say before. This sort of thing happens to a lot of people, and I would really like to avoid it Paul Graham, as quoted in Maciej Cegłowski's blog post "Dabblers and blowhards" - https://idlewords.com/2005/04/dabblers_and_blowhards.htm

Ouch, that hurt. I hope he can see himself in a mirror soon.

Re: Modeling a Wealth Tax

#469

Post by pc86 »

Reedx wrote: post #428
dalbasal wrote: post #332

Earlier quoted context omitted.

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…

In the case of billionaires like Musk, Bezos, Gates... It's unrealistic to think that the government would make better use of that capital. It'll absolutely be wasted in comparison. Taking ever more capital from the most effective/productive allocators and giving it to one of the least effective doesn't strike me as a good strategy. A case like the Walton heirs is another story. I suspect we'd be better off taxing mo…

"I like Elon so he should keep his money."

Re: Modeling a Wealth Tax

#470

Post by nybble41 »

54mf wrote: post #257
nybble41 wrote: post #224

Earlier quoted context omitted.

> It makes it seem really bad when you say "Government takes". Sure, but it's also perfectly accurate. > … you're contributing back … You contribute back by running the business successfully and providing things that people value. Any taxes you pay are above and beyond that. Society creates government, not the other way around, though the government loves to blur the line between itself and society and thus claim cre…

"Society creates government, not the other way around..." And government supports and enriches society. It's symbiotic, not parasitic. "claim credit for what people have created on their own" Nobody creates anything on their own. Full stop. Every single citizen is supported by countless public infrastructure initiatives, from transportation to safety to education to etc etc, without which no significant achievement w…

> Every single citizen is supported by countless public infrastructure initiatives, from transportation to safety to education to etc etc, without which no significant achievement would be possible.

And who do you think is paying for all those initiatives? The government doesn't create, it only redistributes. Transportation, education, etc. would exist perfectly well without the government getting involved. Their "contribution" consists solely in taking the money that would have gone to those things—or other things that people considered even more valuable—and channeling it through their own programs. There is no value-add, just concentration of power, curtailment of viable alternatives, and a much increased scope for corruption and general inefficiency.

> And government supports and enriches society. It's symbiotic, not parasitic.

It's not a pure parasite, true, but even if a symbiote happens to perform some necessary function for the host as a side-effect that doesn't imply that the host wouldn't be better off fulfilling that need some other way. This is not a healthy relationship. The point is to maximize the value to the host. The needs of the "symbiote" are irrelevant, yet it actively discourages competition and violently resists being removed or replaced.

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