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American Equity

blog.samaltman.com

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Re: American Equity

#201

Post by gozur88 »

xapata wrote: post #89
gozur88 wrote: post #37

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. I don't understand why this is something people believe needs "solved". Did you build Microsoft?

> Did you build Microsoft? Yes. I purchased several of their products, thereby increasing the capitalization of Microsoft. I expect you intended the answer to be "No," implying that Bill Gates (and a few others) built Microsoft. However, that rests on a specific understanding of ownership and causality that not everyone shares.

>Yes. I purchased several of their products...

Which is "no". Buying and building are two different things. So I guess you were right about what I intended.

Re: American Equity

#202

Post by TimPC »

maxerickson wrote: post #38
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…

The estate tax is a tax on wealth.

It's actually a tax on wealth transfer, and it has far more favorable terms than tranferring wealth above gift limits while still living. In some sense, the entire estate process is a massive loophole that allows wealth transfer without realizing any income, but a fairly understandable one given the nature of family relationships.

Re: American Equity

#203

Post by wavefunction »

icebraining wrote: post #164
pascalxus wrote: post #17

He's proposing UBI but with a better name. But, before we go with that approach, let's just create wealth out of thin air. It really is possible. Just take all the land in CA that is locked up and undevelop-able and give it to the people. Those people can then sell it to developers and earn a huge amount of money. Now, I know, the way I've laid it out, has a lot of problems to overcome: mostly logistical and politica…

Is a lot of rural land locked up? By whom/what?

Presumably they're referring to lands held in public trust, like National and State Parks, National Forests, BLM land, and National Monuments.

I question the sense in developing large stretches of arid wastelands (among other biomes) that feature beautiful, unique and delicate ecologies.

No, it makes far more sense to appropriate all existing developed land and rebuild as extreme density. The original owners can inhabit the top floor of each new building.

We could even graduate the heights of each new building according to existing property values, ensuring the continuity of our arbitrary class system. The taller the building you inhabit and the further up it, the more remarkable you must obviously be as a person.

My modest proposal maintains these unique landscapes held in public trust for future generations while ensuring that the wealthy can continue to look down on the rest of us.

Win-win!

Re: American Equity

#204

Post by vec »

slimshady94 wrote: post #119
xapata wrote: post #89

Earlier quoted context omitted.

> Did you build Microsoft? Yes. I purchased several of their products, thereby increasing the capitalization of Microsoft. I expect you intended the answer to be "No," implying that Bill Gates (and a few others) built Microsoft. However, that rests on a specific understanding of ownership and causality that not everyone shares.

Would Bill Gates have worked so hard (presumably) if he didn't have that specific understanding of ownership and casuality? Isn't that type of motivation and incentive necessary, to grind through the obstacles?

I expect this is intended to be a rhetorical question, but there's a lot of hidden premises here.

First, it assumes that Bill Gates did in fact work hard. Please define exactly what you mean by "work" and "hard", since I'm not sure there's an obvious thing that he could have done more of, even if he were so inclined.

Second, it assumes there exists some direct relationship between Bill Gates's personal work ethic and Microsoft's outsized success. Maybe all Microsoft needed was a good idea at the right time and would have succeeded about equally well with any minimally competent execution. Maybe they would have done even better had Bill Gates founded the company and then retired at 30.

Finally, it assumes that Bill Gates work ethic had some direct relationship with his financial compensation level. It is quite possible that he would have been more than happy to still give his best possible effort in return for being, say, a mere hundred millionaire. Moreover, plenty of people do hard work for all sorts of other reasons, from duty to boredom to artistic vision. Why do we assume that Bill Gates's internal motivation is predominantly financial in the first place?

None of those premises appear obviously and indisputably true to me. Maybe they are, but it'd be nice to see the case actually made (and made about real humans in the real world, not about perfectly rational actors in an idealized market).

Re: American Equity

#205

Post by gozur88 »

pc86 wrote: post #62
gozur88 wrote: post #37

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. I don't understand why this is something people believe needs "solved". Did you build Microsoft?

My React todo app is just as important as Microsoft.

That's why we have money - so people can say things like "No it isn't, because if it were people would have given you billions for it."

Re: American Equity

#206

Post by touchofevil »

frgtpsswrdlame wrote: post #191
touchofevil wrote: post #172

I completely support this idea. Additionally, I think the USA needs to move away from anything that doesn't reflect majority rule. For example, abolish the Senate, end the electoral college, end gerrymandering, and reform campaign financing. The USA could be a lot more democratic than it is at present and until that is fixed, you will keep seeing a minority of the population control policies that affect the whole nat…

>For example, abolish the Senate, end the electoral college, end gerrymandering, and reform campaign financing. I can get behind a lot of those but the Senate? What's your problem with it? Seems like the founders had very good reason to create it.

The Senate doesn't reflect majority rule based on population. California has 38.3 million residents, Wyoming has 600K residents [1] but both states have 2 senate votes. Due to this, Wyoming residents have much greater voting power in the Senate than residents of CA.

Edit: And since bills must be passed by both the House and the Senate, Wyoming residents have much more power over what becomes law than CA residents do. [1] http://www.enchantedlearning.com/usa/states/population.shtml

Re: American Equity

#207

Post by duderific »

beebmam wrote: post #33
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…

Without a doubt, a global wealth tax would significantly improve the quality of life for every human on this planet; even those with the large amounts of wealth being taxed.

Only if the tax revenues are spent wisely. In the US, some 42% - 57% of the tax base goes to defense spending [1]. It's extremely arguable if that is a good way to spend such a large quantity of tax dollars. One could argue "we should elect representatives who make better spending decisions," however the defense lobby makes sure to get involved with all lawmakers. Once again it comes back to campaign finance reform as the necessary first step to straighten out the political system.

Re: American Equity

#208

Post by jamestimmins »

There's an interesting precedent to this: Biblical Israel. Individuals/families within tribes received an allotment of land, which they were free to trade or sell over time. But every X number of years, the land would revert back to the family of the original owners. The idea here was that everyone had a stake, with an upper bound on how long they could lose that steak. It also set an upper bound on the corresponding wealth inequality that resulted directly from the land.

Seems like there's two primary considerations when looking at a concept such as this. The first is how to implement within our current political climate. The second is how it aligns incentives moving forwards. The first is an obvious challenge, so let's assume for the moment that it is solved, and only worry about the second.

Ideally we want incentives aligned in such a manner that citizens:

1) focus on long term health over short term benefits. It may be tempting for people to reject immigrants because of the perceived cost of a bigger denominator, without appreciating the long term numerator upside.

2) recognize that all benefit from the success of everyone. Put differently, suddenly I care about the state of the individual with limited opportunities on the other side of the country, because it could impact my own wallet in future years.

3) don't somehow become more disenfranchised or powerless through a secondary market of these "shares".

I think it's wise not to ascribe direct political purpose to the various shares. It would be tempting to try to address power inequality directly via share ownership, but that seems misguided.

I assume there's many more incentive issues to consider, but that's just an initial list. I don't know what the answer is to any of these, but if I were to do a full analysis, I would continue to ask questions about what we wanted to incentivize, and what we wanted to de-incentivize. Then whether this actually addresses/mitigates those considerations in a realistic manner.

Re: American Equity

#209

Post by throwaway8184 »

To make this proposal make sense, we need to rephrase it in financial terms that Sam and HN readers would understand.

GDP is a revenue number. Roughly speaking, it's the aggregate sales of all American businesses. Or the aggregate spending of all American consumers.

Obviously there's no sense in which you can "own" a share of revenue. You own capital, not revenue.

So a workable translation of this idea into financial reality might be: every public company dilutes itself by 20%; the new shares are assigned to the government; the new shares are distributed to all Americans. Not unlike the voucher side of the Russian post-Communist privatization scheme.

Then the fun begins. Do the recipients actually own these shares? For instance, can they sell them? In theory, shares should produce dividends, but our tax system has made dividend distribution mostly a thing of the past. Profits are more likely to go through buybacks. You earn returns from capital by selling shares.

But if people can just sell the shares, what stops them from selling them all, and ending up right back where we started? A study of low-income lottery winners and their financial behavior would add a lot, I think, to our understanding of this and similar UBI schemes.

Re: American Equity

#210

Post by TimPC »

majjam wrote: post #162
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…

The economist wrote an article on this recently discussing how the United States raises a lot of money from rich citizens compared to other countries, but redistributes relatively little of this money to poorer citizens: https://www.economist.com/news/united-states/21731642-how-am...

This article cherry-picks a lot and makes quite a few distorted comparisons. To prove the rates on rich citizens are high, they show the rate on low-income citizens in America is lower than other countries, and that the tax curves upward in the US. They use this to argue that the government could spend money differently, but if you look at the numbers in detail you might see tax burden being roughly 20% higher on the poor and roughly 30% higher on the rich in some countries with huge social services. You might also see that 20% being negligible for that poor single mom given that she spends more than that on healthcare that's instead state provided, but not going bankrupt because of broken underfunded healthcare provided by the 30% for the rich might be important for her. Or having public transit so she doesn't have to own and maintain a car on a low income job, etc. Even just using the percentage of income coming from which demographics while ignoring the services provided creates a lot of skew because for instance higher taxes on the poor replacing an insurance mandate with services might end up with the poor spending less total money for better healthcare.
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