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American Equity

blog.samaltman.com

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Re: American Equity

#101

Post by maxerickson »

dsp1234 wrote: post #70
maxerickson wrote: post #24

Earlier quoted context omitted.

The problem literally is that many people don't have an adequate share of the GDP. The footnote proposes to tax capital the same as labor. An interesting thing about Bill Gates is what a tiny sliver of GDP he managed to capture over almost 40 years. Something like $0.1 trillion out of several hundred trillion dollars.

Caveats: GDP is no way to calculate wealth, and comparing the total GDP to any one person's wealth is pretty useless. Let's say the total GDP over the last 40 years was 300 trillion dollars. Also, let's say Bill Gates's wealth is 100 billion dollars (for ease of calculation). 100B / 300T = 0.003 = .3% of 40 years of GDP Let's say that the average population of the US during that 40 year period was 170M[0]. 170M * 40…

You are just beating on the fact that I based the comparison on the total rather than the mean GDP available to an individual.

But that was the point of my post, to compare the captured wealth to consumption. People always talk about how the wealthy are screwing the rest of us over and everything would be great if they weren't taking so much, but it turns out that consumption is also a huge portion of the economy. Total wealth in the US is on the order of $100 trillion (this includes all housing and so on). Consumption of several trillion dollars a year adds up to that pretty quick and seizing it all and turning it into circuses isn't going to go very far.

Which isn't to say I am against programs that result in wealth transfer, it just pays to try to look at things clearly.

Re: American Equity

#102

Post by joncalhoun »

> cost of living crisis

I know this is a major issue in CA, NYC, and probably a few other cities, but I'm not really well versed on how much of an issue it is elsewhere. Where could I learn more about this? Preferably sources with data and not just journalistic fluff.

Re: American Equity

#103

Post by pc86 »

maxxxxx wrote: post #11

He could start with his companies giving out a much larger share of equity to their employees. I always find it fascinating when VCs advocate for things like UBI or this American Equity plan while at the same time being a major contributor to income equality. They could do a lot right now bit instead they make some vague proposals while keeping their money.

"Now that I'm rich you people should do _________."

Re: American Equity

#104

Post by tlb »

whataretensors wrote: post #44
ameister14 wrote: post #39

Earlier quoted context omitted.

That already happened, though, didn't it? JOBS Act III?

It did not. No company I know of seriously implements it. I'm consulting for a startup now. I suggested they implement it and got laughed at.

Enough do that you can build a solid portfolio of startups. https://wefunder.com/ (YC W2013) has many to choose from, and they make the mechanics of investing easy (it is a substantial amount of work if you invest directly).

Re: American Equity

#105

Post by benmanns »

dv_dt wrote: post #71
koolba wrote: post #20

Earlier quoted context omitted.

> Bill Gates' (to name a random American citizen) has a far larger share in the GDP than most other Americans. If you want to solve that raise your taxes on the rich and lift up those that are at the lowest end of the scale. That will have a lot more effect than some fiction where you get to do a bunch of make-believe bookkeeping. Or go a step further do what nobody has the balls to do: tax wealth That's what all the…

We do tax wealth in a very limited way in the form of real estate property taxes. Though I would note that it hits the middle class and poor more disproportionately than the extremely wealthy. And I'd note that the tax cuts in front of congress propose making that scheme land even harder on the middle class by eliminating or curtailing the state/local tax (including property tax) exemptions from federal taxes.

Capital gains tax + inflation is a wealth tax. Each year you have to grow your money by inflation for it to maintain buying power. 2% inflation * 20% top rate LTCG tax means the wealthy pay a deferred 0.4% wealth tax yearly.

Re: American Equity

#106

Post by cryptonector »

jacquesm wrote: post #16

People already have a share in the GDP. That's what it is, the total domestic product, the sum of all the little parts. The problem is not that people don't have share in it (and this goes for every country, not just for the USA), but that they have a disproportionate share in it. Bill Gates' (to name a random American citizen) has a far larger share in the GDP than most other Americans. If you want to solve that rai…

+1.

And whence the money for the share? Taxes. So this is just a UBI.

This, like all UBI proposals, seems like a way to dress up a massive tax hike: "but you'll be getting your share of GDP!". The only way to get me to like a UBI is to have UBI replace absolutely all (and I do mean all) welfare programs so that we can just haggle at every election over one headline UBI number + necessary taxes. And the initial UBI and tax rates would have to be no more burdensome than the current total of welfare it would replace, and preferably significantly less burdensome than that. Many UBI proponents, of course, would not mind this because they'll aim to ratchet up the UBI and taxes for it in a way that becomes culturally irreversible -- and that's a reason to be against UBI.

And incidentally, all instances of "soak the rich" in American history have actually been "soak those who aren't rich but have high incomes". The truly wealthy have no income as such -- instead they have capital. And why don't we just tax capital? Well, because every time it's been tried anywhere it's been a disaster for the overall economy: capital (and wealthy people) flees.

I'm ready for the downvotes, by the way.

Re: American Equity

#107

Post by benmanns »

conductr wrote: post #79
RivieraKid wrote: post #46

Earlier quoted context omitted.

The drawback of taxing wealth is that it distorts markets, it discourages saving. EDIT: Can't comment ("You're posting too fast, blah blah blah"). Here are some replies to the comments bellow: > It's encouraging people to make their money be productive instead of stashing it under a mattress. When you have money in the bank, you're effectively lending most of it to other people. Your money is "productive", which is e…

It's encouraging people to make their money be productive instead of stashing it under a mattress. That doesn't sound like a bad thing to me.

Inflation does that. Cash in your mattress loses 2% a year. A wealth tax would presumably tax productive wealth as much as unproductive wealth.

Re: American Equity

#108

Post by toomuchtodo »

cperciva wrote: post #92
toomuchtodo wrote: post #82

Earlier quoted context omitted.

Taxing consumption is regressive; as your wealth increases, the amount of dollars spent relative to your wealth continues to decrease.

In the long run, every dollar of wealth gets spent. As a practical matter, consumption taxes can be made progressive by combining them with a low-income tax credit or a universal basic income.

> In the long run, every dollar of wealth gets spent.

Not necessarily.

"Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Cisco Systems (CSCO) and Oracle (ORCL) are sitting on $504 billion, or 30%, of the $1.7 trillion in cash and cash equivalents held by U.S. non-financial companies in 2015, according to an analysis released Friday by ratings agency Moody's Investors Service. That's even more cash concentration than in previous years, as these five companies held 27% of cash in 2014 and 25% in 2013. Apple alone is holding more cash and investments than eight of the 10 entire industry sectors." [1]

Also, the top 1 percent owns 90 percent of wealth in the US [2].

"First, economic inequality has worsened significantly in the United States and some other countries. The richest 1 percent in the United States now own more wealth than the bottom 90 percent. Oxfam estimates that the richest 85 people in the world own as much wealth as the bottom half of humanity.

The situation might be tolerable if a rising tide were lifting all boats. But it’s lifting mostly the yachts. In 2010, 93 percent of the additional income created in America went to the top 1 percent."

> As a practical matter, consumption taxes can be made progressive by combining them with a low-income tax credit or a universal basic income.

I agree that a consumption tax can be combined with other policy to prevent the regressive nature of a consumption tax alone. This requires wealth be taxed in various forms (ownership of investments, land, etc).

[1] https://www.usatoday.com/story/money/markets/2016/05/20/thir...

[2] https://www.nytimes.com/2014/07/24/opinion/nicholas-kristof-...

Re: American Equity

#109

Post by ronnier »

chollida1 wrote: post #3

Can someone actually explain what Sam wants to do here? I've read the post 4 times and I still can't see an y sort of plan, numbers, etc to actually critique, Which is odd because he specifically ask you to give feedback but never follows through on presenting the actual idea. He does motivate why he thinks a share of the GDP is so he gets the why, but never actually gets into the what, and how. I mean the GDP isn't…

He wants to share your money that you've worked for.

Re: American Equity

#110

Post by newmanships »

conductr wrote: post #79
RivieraKid wrote: post #46

Earlier quoted context omitted.

The drawback of taxing wealth is that it distorts markets, it discourages saving. EDIT: Can't comment ("You're posting too fast, blah blah blah"). Here are some replies to the comments bellow: > It's encouraging people to make their money be productive instead of stashing it under a mattress. When you have money in the bank, you're effectively lending most of it to other people. Your money is "productive", which is e…

It's encouraging people to make their money be productive instead of stashing it under a mattress. That doesn't sound like a bad thing to me.

The rich aren't stashing most of their money under a mattress. Gates, Bezos, etc are worth billions, but that wealth is almost all based off of the stock prices in the companies they own percentagess of.
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