Meta says it's facing $1.4T in penalties in teen mental health case • Hacker News Board

Re: Meta says it's facing $1.4T in penalties in teen mental health case

#21

Post by ElProlactin » Thu, Jul 09, 2026, 1:59 AM UTC

conception wrote: post #19

ElProlactin wrote: post #7

Earlier quoted context omitted.

First, for accuracy: the personal top marginal income tax rate during the Reagan-era was not 90%. When Reagan took office, it was 70%, which is where it had been since the 1960s. The Economic Recovery Tax Act of 1981 dropped it to 50% and when he left office it was at 28%. Basically nobody actually paid the top marginal rate because there were so many exclusions, deductions and shelters. Many of the biggest went away…

I just want to chime in. “Basically nobody” is not nobody. Usually when people speak about these tax rates they are looking at too 1% tax receipts but the ultra wealthy .01% certainly got a payday with Reagan subsequent tax cuts have benefited them tremendously. https://economicsinsider.com/us-wealth-inequality-1965-2025/ has a nice graph. The paydays for the extremely wealthy do not tend to pop up on reports because…

The actual data: in 1963, 501 out of around 50 million filers were affected by the top marginal rate.

According to the Tax Foundation, the actual average effective tax rate for the top 1% of earners in 1962 was only ~16%. That's because, again, there were massive legal deductions, exemptions and shelters that were permitted to basically ensure that very few people actually paid this rate of tax.

You are correct that the wealthiest of the wealthiest (the top 1% of the top 1%) have seen their fortunes explode in recent years, and there are big issues with this.

But when you're talking about Facebook's despicable behavior and how to deal with it, I don't see how "bring back a marginal tax rate of 90%!" is a viable solution to this problem. The obvious solution is to ensure you have strong consumer protection laws and enforcement and a functioning tort law system.

I do think there is obviously an issue with the influence the wealthy have on regulators and their ability to play the court system, but here's a problem: the wealthiest of the wealthy are still going to be the wealthiest people even after you tax them, and the government's dependence on their wealth for tax revenue can become its own problem.

Taking the 1998 Tobacco Master Settlement Agreement as an example, you now have state and federal governments that rely heavily on continuing tobacco revenue because the hundreds of billions of dollars of settlement payouts are directly tied to the future sales of cigarettes. Therefore, the state and federal governments want people to keep smoking because if they don't, the tobacco companies wouldn't be able to keep up the settlement payments. It's quite perverse actually, and we should be wary of a similar Big Social Media settlement wherein the government has reason to push for Facebook's continued financial success.

Re: Meta says it's facing $1.4T in penalties in teen mental health case

#22

Post by reinitctxoffset » Fri, Jul 10, 2026, 3:39 AM UTC

ElProlactin wrote: post #7

antonvs wrote: post #6

> a figure the tech giant blasted as “outlandish.” Conforming to society's expectations can feel outlandish if you've never been subject to it before. This is why Reagan-era 90+% top marginal income tax and strong antitrust measures are important - it prevents companies getting to the point when it feels "outlandish" to them to be punished for trying to destroy the society that granted them their wealth.

First, for accuracy: the personal top marginal income tax rate during the Reagan-era was not 90%. When Reagan took office, it was 70%, which is where it had been since the 1960s. The Economic Recovery Tax Act of 1981 dropped it to 50% and when he left office it was at 28%. Basically nobody actually paid the top marginal rate because there were so many exclusions, deductions and shelters. Many of the biggest went away…

Your comment starts off strong with real facts that are a little cherry picked but not outright gerrymandered, segways smoothly into a controversial if not outright false water down ("...basically nobody paid...") before accelerating out of the corner into just stating a position on hotly contested stare decis as flat fact ("Corporate tax is meant to...").

Easy there rude boy, this is under dispute. There are many of us who think that punitive taxes in the top bracket brutally enforced are far better represented in the history of far more prosperous eras than the present than your characterization. Mostly we think that marginal wealth far detached from any realistic consumption of that wealth has basically nowhere to go but pricing tangible assets ever further out of reach for most everyone at an accelerating rate via capture further inducing market failure.

Neither side of this debate has conclusively prevailed, I'm going to be honest about that in the hopes of setting a better example than you have, but I'm still entitled to remind people reading this that the debate exists.

Re: Meta says it's facing $1.4T in penalties in teen mental health case

#23

Post by ElProlactin » Sat, Jul 11, 2026, 3:43 AM UTC

reinitctxoffset wrote: post #22

ElProlactin wrote: post #7

Earlier quoted context omitted.

First, for accuracy: the personal top marginal income tax rate during the Reagan-era was not 90%. When Reagan took office, it was 70%, which is where it had been since the 1960s. The Economic Recovery Tax Act of 1981 dropped it to 50% and when he left office it was at 28%. Basically nobody actually paid the top marginal rate because there were so many exclusions, deductions and shelters. Many of the biggest went away…

Your comment starts off strong with real facts that are a little cherry picked but not outright gerrymandered, segways smoothly into a controversial if not outright false water down ("...basically nobody paid...") before accelerating out of the corner into just stating a position on hotly contested stare decis as flat fact ("Corporate tax is meant to..."). Easy there rude boy, this is under dispute. There are many of…

> segways smoothly into a controversial if not outright false water down ("...basically nobody paid...")

501 returns out of 50 million filers in 1963, with the top 1% paying on average just ~16% in 1962.

> before accelerating out of the corner into just stating a position on hotly contested stare decis as flat fact ("Corporate tax is meant to...").

The purpose of corporate tax in the US is to generate public revenue. The history shows this very clearly.

And just to be clear: the original comment conflated individual and corporate tax, and there's still an element of conflation in your comment.

C corporations, which most big businesses are organized as in the US, are taxed on their profits. If and when profits are distributed to shareholders, the shareholders pay tax on the dividends. This is double taxation. Owner-employees are taxed on their salaries. And when they dispose of their shares, they pay tax on the capital gains.

There are legitimate discussions to be had about wealth inequality, whether the current tax regime is suitable for the world we live in, etc., but the idea that punitive taxation (at the individual or corporate level) would be the best way to prevent exploitative business models and practices is dubious. This is exactly what tort law and consumer protection regulation is for.