Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea • Hacker News Board

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#111

Post by tw04 » Thu, Oct 22, 2020, 6:08 PM UTC

tonystubblebine wrote: post #6

As a business owner, when taxes are low, I see that as an incentive to pocket profits. But when taxes are high, I see that as an incentive to hide the profits by investing in the future. I know this isn't always the case with everyone. And especially investors have a case that higher corporate taxes reduce the value of their investments, possibly to the point of not making them. But this incentive is so blatantly obv…

>And especially investors have a case that higher corporate taxes reduce the value of their investments, possibly to the point of not making them.

I know you aren't arguing against higher taxes, but my response to that is... and? Does Target benefit more from some random hedge fund buying up $20 million of their shares? Or from consumers buying $20 million in goods from them? Once a company has gone public, unless they're trying to do another round of funding, the share price is almost meaningless beyond the ghost of being taken over by another entity.

This belief that institutional investors mean more to the health of a business than ACTUAL SALES is baffling to me (not saying that's your stance).

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#112

Post by lapetitejort » Thu, Oct 22, 2020, 6:08 PM UTC

brundolf wrote: post #4

[deleted]

NPR? It's a non-profit.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#113

Post by oehtXRwMkIs » Thu, Oct 22, 2020, 6:09 PM UTC

No one has mentioned that wealth taxes that have been tried before in other developed countries have not gone well, so based on that alone I'm skeptical. And I heard about this from Planet Money (NPR) so I don't think this is some idea planted in my head by "media owned by wealthy".

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#114

Post by jquery » Thu, Oct 22, 2020, 6:09 PM UTC

coliveira wrote: post #53

tonystubblebine wrote: post #6

As a business owner, when taxes are low, I see that as an incentive to pocket profits. But when taxes are high, I see that as an incentive to hide the profits by investing in the future. I know this isn't always the case with everyone. And especially investors have a case that higher corporate taxes reduce the value of their investments, possibly to the point of not making them. But this incentive is so blatantly obv…

This is so hidden in the debate that it is almost like a "secret". The more taxes you have on corporate income, the higher the incentive for corporations to invest in the company, so they can avoid paying taxes. This is good for the economy. On the other hand, lowering corporate taxes also generates a cascade of tax avoidance, since you have higher profits that generate the need for more complex tax avoidance schemes…

> This is good for the economy.

Not at all clear to me this is the case.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#115

Post by el_nahual » Thu, Oct 22, 2020, 6:09 PM UTC

throwaway2048 wrote: post #32

el_nahual wrote: post #21

Classic circular fallacy. "Wealth taxes are good. Wealthy people don't like wealth taxes, and that's how you know they are good." Or is it an ad hominem even if the "hominem" is a class (wealthy people) instead of a person?

Its not making the argument that wealth taxes are good because wealthy people oppose them, only that their point of view on the topic is deeply self serving and masquerading as an objective analysis.

Fair, but that's a weak stance. We should debate the consequences, implementation, and rationale of wealth taxes, not ascribe motivations to their supporters/dissenters.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#116

Post by coliveira » Thu, Oct 22, 2020, 6:09 PM UTC

mikepurvis wrote: post #27

muststopmyths wrote: post #15

Earlier quoted context omitted.

My guess: because they hope to be wealthy some day.

A famous formulation of that is: "John Steinbeck once said that socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires."

It is typical of Americans because most of their families came to the country with the allure of becoming wealthy. So it was important for them to tell themselves this story.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#117

Post by maxharris » Thu, Oct 22, 2020, 6:10 PM UTC

LambdaComplex wrote: post #110

maxharris wrote: post #86

Wealth taxes are a bad idea because they target everyone with wealth, regardless of the actual views they hold, regardless of the degree to which they have personally contributed to the collapse we are facing. The real inequality we have today is being perpetuated by outdated regulations, primarily from the 1930s. It's also being perpetuated by people that invest in Warren Buffet-style "value" stocks, which extract a…

> we have to stop making it illegal to build enough homes for people that need them There's already enough homes (in the USA, at least) to house all the homeless people in the country. Unfortunately, giving homes away wouldn't be profitable, and profit is all that seems to matter.

What about the fact that those homes are not equally distributed geographically? There are reasons people prefer to live near their families, workplaces, places with good weather, etc.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#118

Post by ceejayoz » Thu, Oct 22, 2020, 6:10 PM UTC

maerF0x0 wrote: post #88

I will say that this article points out a CNBC article on "$400k in a big city...". And FAIR seems to be missing that both earnings _and expenses growth_ have been growing very fast for those in cities. Progressive taxation of someone earning $100k per year in San Francisco or NYC is hardly fair. At least prior to covid19 causing a crash in the rental market one could expect to pay ~$2500 a month to share a 2bedroom…

> That's spending 42% of take home pay to have roommates!

So, probably not affected much by a wealth tax.

> $400k per year is about what it takes to run a middle class family w/ 2 kids in such a city.

What? The median household income in NYC is about $63k.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#119

Post by beardedetim » Thu, Oct 22, 2020, 6:10 PM UTC

throwaways885 wrote: post #24

muststopmyths wrote: post #15

Earlier quoted context omitted.

My guess: because they hope to be wealthy some day.

Doesn't everyone? Plus, there's other reasons to be skeptical of wealth taxes, capital flight is a real thing.

> Doesn't everyone?

God I hope not. How empty would we all be if we all wanted to have more money than the next guy.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#120

Post by nostrademons » Thu, Oct 22, 2020, 6:10 PM UTC

tonystubblebine wrote: post #70

nostrademons wrote: post #60

Earlier quoted context omitted.

I think the OP is talking about investing within the business. The business is a separate legal entity with its own income, expenditures, and assets that is under the control of its owner. Assuming that you want to continue owning the business as a going concern, it makes sense to maximize expenditures (by investing in the future) and minimize profits when tax rates are high. But if you're happy entering and exiting…

Exactly. Corporate taxes are an incentive for businesses investing in themselves but, as I understand it, an disincentive for investors to invest in businesses. I'm mostly just bothered by how simplistic the debate is and how most people don't even understand this detail.

Interesting. This also implies a shift from financial capital (VCs, hedge funds, private equity) to production capital (reinvested profits) when corporate tax rates go up. In the Carlota Perez model, this is the shift from the "frenzy" phase (of huge valuations, founders entering and exiting startups, bubble mentality) to the "deployment" phase (where the technology diffuses through the economy and is adopted as part of the fabric of many companies). I never thought of tax policy as helping drive that, but it seems to correspond pretty well.

My other big question is how this interacts with monetary policy. Inflation tends to preference financial capital by a.) lowering the real cost of outside credit and b.) causing dislocations within the economy that create opportunities for new startups. That could offset higher corporate taxes to some extent, while if combined with low corporate taxes it could spark a mania.