Modeling a Wealth Tax • Hacker News Board

Re: Modeling a Wealth Tax

#901

Post by fidlestix » Wed, Aug 19, 2020, 1:20 AM UTC

macspoofing wrote: post #758

patmcc wrote: post #704

This is simplistic to the point of absurdity, and doesn't model how any sensible wealth tax would be implemented or paid. First, any wealth tax being seriously discussed has a floor and/or has marginal rates, probably starting at 1 or 5 or 10 million (or higher). Second, taxes don't disappear into nothingness - they pay for civilization. It is clearly beneficial to everyone to live in a society where people are well…

>First, any wealth tax being seriously discussed has a floor and/or has marginal rates, probably starting at 1 or 5 or 10 million (or higher). Uh huh. >Second, taxes don't disappear into nothingness - they pay for civilization. But there are bad taxes. There is such a thing as too much tax. So you have to justify the wealth tax on its own merits instead of trying to pull a motte-and-bailey fallacy by pushing a wealth…

What about

> Fourth, this effectively ignores that wealth is a thing that grows and compounds.

You absolutely will not "lose control at some point" so long as the value of your company/stock keeps pace with inflation + wealth tax.

It's the simplest, most straightforward reason this "modeling" is bunk.

Re: Modeling a Wealth Tax

#902

Post by AdrianB1 » Wed, Aug 19, 2020, 1:23 AM UTC

Whatever people think about this tax, I think it is basically immoral. This is why:

- people say it is good because it brings more money for the government to spend and wealthy people have money, so they are the easy target to get money from. That makes them just an obvious victim, not the right thing to do. It's a thug mentality to pick the old lady as a victim because it's the easy thing to do.

- it is discriminating. To the extreme, if the country has X needs divided by Y people, each person should pay X/Y to cover it. One man, one vote, égalité, fraternité, whatever slogan you want to use means equal rights but equal responsibilities too.

- it comes with the justification that the (US or Cali, I am in Europe so I am out of it) government needs more money. That is the rapist argument, someone's needs does not imply someone else's obligation to fulfill the needs.

- it comes with the justification that it can be done legally by voting. That is the group rapist's argument, no matter how many people vote it does not make it automatically morally right.

- it justifies that the result will be better services. Well, if money is what is needed for better services then why not put a direct payment for the services? Some people would not afford it, so going for someone else to pay for it will make it possible ... not morally right.

- the argument that a filthy rich person can pay and still be filthy rich. That is very true, but it is still morally wrong to take someone's money (or wealth or whatever) just because they can afford the loss or they have plenty. My neighbor have several bicycles, does it means it is fine if I take one?

Re: Modeling a Wealth Tax

#903

Post by mrnobody_67 » Wed, Aug 19, 2020, 1:23 AM UTC

ggreer wrote: post #665

mazspork wrote: post #583

Earlier quoted context omitted.

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 Zuck…

"If people don't pay for a company's products, that company will go out of business."

The problem is that capitalism has broken down.

20% of publicly traded companies are zombies. Their earnings are below what they need to pay INTEREST on their debt.

Government is bailing out inefficient companies, whose assets would otherwise be sold off to more efficient operators.

Re: Modeling a Wealth Tax

#904

Post by DINKDINK » Wed, Aug 19, 2020, 1:24 AM UTC

TrackerFF wrote: post #854

DINKDINK wrote: post #820

Earlier quoted context omitted.

>Penalizing static value seems almost reasonable. Ah yes, the economic argument of "punish savers and people refraining from consumption will lead us to our Centrally Planned Utopia" >If you have a bucket of money that isn't doing anything, then what value does it actually bring to the economy? Do you and I live in the same reality? When a global pandemic has shown almost every single person on earth that cash balanc…

You're confused. We're talking about multi-millionaires, often in the tens of millions, and more. No-one is saying that regular Joe's with $800 in their savings account should be penalized for just letting them sit.

>No-one is saying that regular Joe's with $800 in their savings account should be penalized for just letting them sit.

Does no one in this thread understand that there already exists wealth taxes in countries without explicit wealth taxes?

While many countries have explicit wealth taxes (Government agency that will demand you pay x on y), many (almost all) countries have wealth taxes that tax "regular Joe's with $800 in their savings account". The central bank in the USA literally has a charter to print enough money so that asset prices rise at a nominal 2%PA. If a central planner confiscates $16 in purchasing power from regular Joe does it matter if its done through direct taxation (taking the $16 dollars) or indirectly (printing enough money so that his future value of $800 will be only $784)?

Re: Modeling a Wealth Tax

#905

Post by alentist » Wed, Aug 19, 2020, 1:25 AM UTC

dmode wrote: post #888

misun78 wrote: post #843

Earlier quoted context omitted.

People can question all they want about why wealth is not trickling down but that doesn’t change the underlying analysis or outcomes around why this is a bad idea. You may get income redistribution and trickle down but if it changes the underlying systems that create wealthy, those same people will just end up poorer but more equitable.

Is there any evidence for that assertion ? I mean you take any European country such as Norway, Denmark, Netherlands, Switzerland, UK, and even France. Where taxes are remarkably high, and definitely far fewer billionaires per capita. Europe has better health outcomes, better income equality, and extremely low poverty rate compared to the US. [1] [1] https://data.oecd.org/netherlands.htm

Note: Income inequality [0] and poverty rate [1] are in-distribution relative measures, not absolute measures. You could “improve” these measures by making everyone worse off (i.e. a Pareto worsening).

[0] https://data.oecd.org/inequality/income-inequality.htm

[1] https://data.oecd.org/inequality/poverty-rate.htm

Re: Modeling a Wealth Tax

#906

Post by CarbyAu » Wed, Aug 19, 2020, 1:31 AM UTC

Why "wealth tax"? Why not "income boost" by taking some % (20%? 50%? 80%?) of the dividends and dividing it equally to the people who work there as well as pay their salary.

The company does well - you get a bonus! The company does not so well - no bonus, you better work smarter/harder/different.

1. Motivation directly tied to productivity. 2. Team/community feel when you "win". 3. CEO really IS working for you! 4. Less money for the rentiers. But they still get money. 5. More money for "the workers". 6. Still get your salary to distinguish between high value and less value jobs. 7. Still can buy shares in whichever company floats your boat, including your own.

Clearly, the job market and the share market would change significantly in how they value things and new ways to abuse things would emerge (people working many "full time" jobs at once?) but I can't see how it would be worse.

Ultimately, take some money from the "rentiers". People who make money because "they own something" not because "they do something". Rentiers are non-productive leeches on society.

Re: Modeling a Wealth Tax

#907

Post by filoeleven » Wed, Aug 19, 2020, 1:38 AM UTC

imgabe wrote: post #838

cies wrote: post #778

Earlier quoted context omitted.

> the idea that people [read: super rich] "will just move to another country" is very silly. This is a recurring theme in owners/investors: they always have some story that they will be forced to leave or close shop if some labour-proteaction-laws (like weekends, or 8h days, or banning of child labour), or taxes are implemented. It's a very old story, there's a history to it. Please note that we have weekends/8h work…

Then why are all the manufacturing jobs in China and other countries without those labor laws? The remaining jobs in the US are salaried position where "8 hour workday" and "weekend" are often meaningless. Plus we're talking about a wealth tax in California. You can start a company in Nevada and still access the market of California just fine.

This is about startups, which are very rarely about manufacturing. Most of the “information economy” startups are still in the US.

Re: Modeling a Wealth Tax

#908

Post by culturestate » Wed, Aug 19, 2020, 1:38 AM UTC

pydry wrote: post #857

nordsieck wrote: post #851

Earlier quoted context omitted.

> Please note that we have weekends/8h work day/ban on child labour and also still have the super rich. They never left. Some didn't leave. There's a reason why Singapore has the highest concentration of millionaires in the world, and it's not because of their school system. I'm not saying that all will leave, or even that most will, but some will.

Money laundering. Singapore exists at the behest of the United States. Its sovereign wealth fund is heavily invested in the United States and its geopolitical precariousness on the straits of malacca is predicated upon the implicit protection of the United States Navy. It's a political choice to let millionaires flee there, just as it's a political choice not to tax them at home. A snap of the US's fingers will chang…

> Like when Wrigley sent a US Congressman to visit - he snapped his fingers and chewing gum was no longer banned.

He must not have snapped very loudly, because the only way to buy chewing gum to this day is as medicine (e.g. nicotine gum) from a doctor or pharmacy.

Re: Modeling a Wealth Tax

#909

Post by zxcvbn4038 » Wed, Aug 19, 2020, 1:43 AM UTC

Stuff like this only works if done universally, otherwise people will just go where the taxes aren’t.

At one point the US was looking to curtail oil speculation, I think the idea was you would have to accept delivery of what you traded, but they backed off because the Dubai exchange took the opposite position and all the major US financial firms were gearing up to move their oil commodities trading to UAE.

Re: Modeling a Wealth Tax

#910

Post by prawn » Wed, Aug 19, 2020, 1:44 AM UTC

marakv2 wrote: post #878

coryfklein wrote: post #552

Graham does the classic magician's trick of showing you something shiny so you don't see what he's doing with his other hand. In this case, the shiny is the scary 45% figure. What he draws your attention away from is the bizarre hypothetical: > Suppose you start a successful startup in your twenties, and then live for another 60 years. How much of your stock will a wealth tax consume? Who is this hypothetical 20 year…

This. The author is playing the typical Rich man's game. Oh woe is me, look at these poor people who this tax will destroy! The fact that so many people here are defending them, is maddening and disheartening. Arguing that anyone with a value of over 50mm can't pay a higher tax rate on those funds is disengenous at best.

I find PG interesting to follow on Twitter in that I don't always agree at first with what he says, but it can lead me to investigate and confirm or adjust my position. But on these topics I often get the vibe that he's leaking personal concerns.

Maybe it's not purely selfish but the idea that he's looking out for his cohorts of young motivated founders, yet even that feels off. I doubt many start a business desperate for tens of millions; I'd guess the primary motivations are control of work schedule and basic FU money.