Totally ignores the likelihood that wealth tax will almost certainly be progressive: likely with a limit ignoring all wealth less than a few million.
Modeling a Wealth Tax
661–670 of 1001 posts
Re: Modeling a Wealth Tax
#662Oh my, more state money would mean probably a more equal society - more money for roads, schools, teachers, research labs, health care, infrastructure and much more. All things by the way any entrepreneur is happy to "take" or accept as given. Forgive me, but watching extremely privileged people's viewpoint, that they are so genius is so much missing the point (of luck, and of course a society that nourishes and carr…
> more state money would mean probably
more corrupt goverment officials and more money spent on buying heroine for drugsters and repeat offenders on e.g. SF and Seattle streets.
Re: Modeling a Wealth Tax
#663Perhaps 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…
Keep in mind that the Swiss model would be analogous to the US charging wealth taxes at a State level. One can move between cantons to reduce the tax.
Re: Modeling a Wealth Tax
#664Perhaps 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…
It's honestly embarrassing that PG would even post this. The post strikes me as particularly lazy and dismissive because it doesn't engage with any of the arguments for a wealth tax or the motivations behind one. As other comments have pointed out, the example is not even close to a good "model" of a real-world wealth tax. It's a straw man. I would expect an overconfident high school student who just finished The Fountainhead to make this kind argument but not a successful and supposedly smart venture capitalist.
I've seen this pattern from PG and other people in tech over and over. They assume their expertise in one domain translates into other fields in which they have no special knowledge. Underlying a post like this is the arrogant assumption that nobody smart has ever thought of calculating .99^60, and that PG knows what's best.
Paul Graham is hopelessly out of touch.
Re: Modeling a Wealth Tax
#665After being one of the top-rated commenters on HN for some years, I have not commented in a long while. For what it is worth, here is my two cents on a topic - a wealth tax - that may seem on the surface to be benign but that is in fact just the opposite. Silicon Valley was founded in a spirit of freedom and flexibility but that spirit is clearly and dangerously on the wane insofar as the political environment surrou…
Inequality in your country has risen dramatically the past 30 years. That's what your legislators are trying to address. A lot of value is created in the early stages. Should that be exempt? Remember, companies don't exist primarily to pay back investors, their first objective is to contribute to society. My €0.05
> Remember, companies don't exist primarily to pay back investors, their first objective is to contribute to society.
If a company does pay back investors, that almost always means that it has contributed to society on net. Let me explain.
If people don't pay for a company's products, that company will go out of business. Unlike a government, a company has little coercive power. If I refuse to use Facebook, Mark Zuckerberg can't send men with guns to my home and force me to create an account. Even companies that benefit from network effects (such as social media companies) must build compelling products that people want to use.
Now one could claim that most people are mistaken in what they want, or that they lack the knowledge to understand what they're really getting into, but that would also mean that you disagree with the notion of democracy (since those same mistaken, ignorant people will pick the policies and leaders that control our lives).
There are only a few ways that a company can capture value without creating it. The first is fraud, which is illegal. The second is coercion. That means using violence (or the threat of violence), blackmail, or if they lean upon the state to coerce people. This is usually illegal, though there are some exceptions such as patent trolls. The third way is if they create negative externalities. For example: if I buy a car from a car company, I am better off but everyone else is slightly worse off from the pollution I create and the increased risk of being run over. The way we solve externalities is through insurance and taxes. If I'm required to have liability insurance for my vehicle, and I'm required to pay taxes based on how much my vehicle pollutes, then I pay the costs of my externalities and am properly incentivized to alter my behavior. Perhaps I drive less than I otherwise would. Perhaps I buy a vehicle that pollutes less.
As long as we ensure that parties pay the cost of the externalities they create, we can be confident that any profitable firms are creating more value than they capture. That means they're a net benefit to society.
Of course if we follow this logic, this means that some rather ridiculous firms are beneficial to society. Is World Wrestling Entertainment, Inc beneficial to society? As far as I can tell, WWE is a way to get people to pay outrageous amounts of money to watch roided-out actors pretend to fight. But if WWE pays for their externalities (such as actors' medical bills), who am I to judge? Everyone involved knows what they're getting into and consents. So what if I think the whole enterprise is a colossal waste of time and resources? I'm sure those people think the same of some of my interests.
The alternative to this is a world in which the majority decides for everyone what is beneficial to society or not. Considering the competence of the average voter (and the competence of our government), I'd prefer to err on the side of non-intervention.
Re: Modeling a Wealth Tax
#666Software guy performs extremely simplistic model of a field outside of software and makes simplistic conclusions, news at 11.
Wealth taxes can be graduated and have a wide 0% bracket. They are graduated on a dollar basis, not a share-count basis.
Yes, 1-2% is about the upper practical limit of the highest bracket rate. 3-5% is absurd and wouldn't work.
Re: Modeling a Wealth Tax
#667Perhaps 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…
> See also https://twitter.com/halvarflake/status/1295283922117566464?s.... - I tried to ask @rabois for the source of a claim, and got crickets in return
My twitter client shows a reply from him yesterday, mentioning you, that points to an NPR link, which in turn cites this article: https://www.france24.com/en/20150808-france-wealthy-flee-hig...
Re: Modeling a Wealth Tax
#668Perhaps 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…
> Switzerland has a wealth tax (of up to 0.3%
Switzerland has no wealth tax. Individual cantons and municipalities in Switzerland have wealth taxes, and set the rates and exemptions.
The rates actually go much higher than 0.3%, up to 0.7% - 0.8% in some places.
> there is zero evidence that this has any deterrent effect on wealthy people settling in Switzerland or startups being created in Switzerland.
There is evidence that wealth moves between cantons to minimize the amount paid in wealth taxes (cf. https://voxeu.org/article/wealth-taxation-swiss-experience).
Not strictly contradicting what you said, but I take the implication of your statement to be "the wealth tax actually doesn't change people's behavior", but it seems to in some cases.
Re: Modeling a Wealth Tax
#669Perhaps 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 t…
If you offer compelling arguments for changing certain aspects of a country to be more similar to another country that handles things better (in your opinion), then I don't see the problem. Sure, some people will always be offended if you propose to change amything about their country, but many more people are open to suggestions for specific changes. Very few people, on the other hand, are actually proposing change just for the sake of "turning one country into another". If that were the case, then I would think it a very weird fascination too.
Re: Modeling a Wealth Tax
#670Good. What's the complaint? It seems like the tax compounds exactly as designed. I don't see why this is even being pointed out.