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How to convert between wealth and income tax

paulgraham.com

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Re: How to convert between wealth and income tax

#31

Post by wat10000 »

kingstoned wrote: post #2

If you want to understand why someone would even propose taking from the rich and complain about inequality, this post titled "Inequality Talk Is About Grabbing " is illuminating: https://www.overcomingbias.com/p/inequality-is-about-grabbin...

I can't speak for others, but this doesn't match my thinking at all.

I want to heavily tax the ultra rich because money is power, and vast inequality in power is undemocratic and just plain dangerous.

I don't really care if somebody buys ten massive yachts. It's annoying and seems wasteful but it's not worth too much of my attention.

But it's another matter if somebody buys politicians, laws, social change. The issue with someone like Elon Musk isn't that he owns a private jet, or even that he owns a rocket company, it's that he bought his way to taking an axe to major parts of our government by pouring unimaginable amounts of money into buying a presidential election.

It's not about grabbing stuff, it's about preventing people from accumulating too much power. The ultra-wealthy should be heavily taxed for the same reason the President shouldn't be given unlimited power to do whatever they want.

Re: How to convert between wealth and income tax

#32

Post by pydry »

>It's clear that politicians don't get this from the way they talk about a "mere 1%" wealth tax. None of them would speak of adding a "mere 20%" to the income tax rate, even though that's mathematically the same thing.

His core point seems to be that taking $20 from him is mathematically equivalent to taking $20 from a homeless girl's hat.

I guess mathematically it is the same number if you dont normalize for that, which he wont.

Re: How to convert between wealth and income tax

#33

Post by meta_gunslinger »

futter9 wrote: post #14
ceejayoz wrote: post #5

Earlier quoted context omitted.

> People usually become billionaires via having “super-powers,” i.e., very unusual abilities, at least within some context. If you count luck, maybe. > But what if most billionaires had super-powers of the traditional comic book sort, like x-ray vision or an ability to fly, etc.? That is, what if people with physical super-powers earned billions in the labor market by selling the use of these powers? Would folks be j…

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Re: How to convert between wealth and income tax

#34

Post by gr_norm »

kingstoned wrote: post #2

If you want to understand why someone would even propose taking from the rich and complain about inequality, this post titled "Inequality Talk Is About Grabbing " is illuminating: https://www.overcomingbias.com/p/inequality-is-about-grabbin...

> People usually become billionaires via having “super-powers,” i.e., very unusual abilities, at least within some context.

There are certainly sometimes unusual abilities in a positive sense, but the common case likely falls closer to having an unusual degree of sociopathy. It is unclear to me how else one could view the state of perfectly solvable human suffering in the world and continue to prioritize accumulating wealth over all else, moreover and overwhelmingly at the cost of being party to the suffering itself. Indeed, I suspect having such callous disregard for your fellow person is prerequisite to encountering these unfathomable sums.

When people with an intact capacity for empathy come into huge amounts of money I think it's far more common to give a large proportion of it away (say, Jane Street workers have a culture of doing this). And thus you only stay 'comfortably' wealthy, rather than accumulating so much that it distorts society around your singular existence.

Re: How to convert between wealth and income tax

#36

Post by deathanatos »

> It's clear that politicians don't get this from the way they talk about a "mere 1%" wealth tax. None of them would speak of adding a "mere 20%" to the income tax rate, even though that's mathematically the same thing.

Uh … sure I would? Why not? The top bracket was 70% in the 80s. So that 61% is still a fair bit short of what it was then. (And the 80s isn't the highest point, either.)

IDK if it would be a good idea or not, but I'd entertain the debate, certainly. To state that this is unarguable, though, well…

Re: How to convert between wealth and income tax

#37

Post by Matheus28 »

You obviously can’t convert between the two directly and suggesting that is disingenuous.

Income tax doesn’t affect unrealized capital gains (where the rich “hide” most of their income).

A wealth tax (even without a minimum threshold) doesn’t apply to the poorest who can’t accumulate enough to even have any savings.

This conversion only works for income that is entirely saved and reinvested, which the majority of people can’t afford to do.

Re: How to convert between wealth and income tax

#39

Post by wat10000 »

philipallstar wrote: post #13
lowbloodsugar wrote: post #4

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This seems like such a poor understanding of reality. If you want to rank order people who contribute net taxes, you would put billionaires at the top, as they not only pay taxes themselves, but their businesses pay taxes, and their employees pay taxes, and their customers potentially pay taxes (VAT) as well. The bottom of the list would be anyone who works for the state, as they are a massive net tax negative, follo…

Get rid of the employees and the taxes no longer get paid.

Get rid of the billionaire and the taxes still get paid.

Why do we credit those taxes to the billionaire rather than the employees?

Re: How to convert between wealth and income tax

#40

Post by zedpm »

Are there serious proposals to just add a wealth tax on top of the existing income tax that would apply to the sort of people who actually pay much in income tax vs capital gains? It's an honest question; I haven't seen proposals of that sort, so I'm skeptical that the arguments are meaningful here. For an individual like Jeff Bezos, he's paying virtually no tax under the normal income tax rates referenced in the article, but rather capital gains tax, which tops out at 20%, not 37%.
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