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American Equity

blog.samaltman.com

371–380 of 552 posts

Re: American Equity

#371

Earlier quoted context omitted.

Well, the real question to me is do we think of people who live in Wyoming as "Wyomingers" and those in CA as Californians? I don't think so. We just think of everyone in the USA as Americans. So why should it be that some Americans (those who live in Wyoming) having outsized voting power over national laws? A minority of Americans is controlling the country via the methods I mentioned. It doesn't seem to be working…

>Well, the real question to me is do we think of people who live in Wyoming as "Wyomingers" and those in CA as Californians? I think we talk about it that way all the time, both where I live (which is a lot closer to Wyoming than California) and in places which are closer to California that Wyoming. The common issues of the day are all ones of class division and I think that geographical division really plays into it…

This whole idea of "coastal elites" and "flyover states" is just a tool that those with real power (corporations and special interests) are using to divide Americans so that they are easier to control. If you were the NRA looking to make sure that "bump stocks" don't get banned after a gunman shoots hundreds of people in Vegas using them, where would you focus your resources? On the Senate, of course! Because the House can't do anything without the Senate's approval and influencing 41 Senators is a lot easier than trying to influence hundreds of members of the House.

It's the same with the presidential election. If you're the NRA, what's easier for you to influence? A popular vote or our current electoral college system where only a few swing states matter?

If you're saying that the electoral college and the Senate are a means of protecting those in the "flyover states", then I would just you how that's working out? Do you think "Wyomingers" are the ones who are going to benefit from repealing the estate tax? The House, Senate, and Executive branch are all controlled by Republicans who should, in theory, be advocating for "Wyomingers" and yet they seem to only be working on behalf of the interests of the wealthy, special interests, and corporations.

Just abolish the states all together as far as I'm concerned and let's have one unified America, which would be much harder for special interests and corporations to influence.

Re: American Equity

#372
post #369

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 proposes a soft version of Socialism [1]. You can own a company but you will have to pay additional 20% income tax or 20% VAT (I am not sure how to gather in taxes 20% of GDP). [1] https://en.wikipedia.org/wiki/Socialism "There are many varieties of socialism and there is no single definition encapsulating all of them, though social ownership is the common element shared by its various forms"

It's remarkably similar to market socialism, discussed briefly by Matt Levine here: https://www.bloomberg.com/view/articles/2017-11-22/uber-hack...

and Matt Bruenig here: https://peoplespolicyproject.org/2017/08/17/index-funds-are-...

Re: American Equity

#373
post #176
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…

From the perspective of trying to get the budget balanced, taxing wealth is probably the single most efficient way to do it. From the perspective of the tax code as an incentive system , taxing wealth is a strange thing—it makes people feel less interest in becoming wealthy, and thereby causes fewer GDP-building things to happen! (This is also, for a similar reason, why economists don't like corporate taxes or trade…

Since a couple years back, we have a 1% tax on wealth in Colombia, which applies to anyone who has above approx. 330,000 USD in assets

I don't think it has disincentivated anybody from becoming less wealthy and/or working less. It just incentivizes tax evasion, but even that is not significant.

On the other hand, a large number of social programs have been built around this new tax. Anybody in the country could get cancer and would get free decent healthcare.

Re: American Equity

#374
I like the general idea. However, the problem with giving people a share of the GDP is that GDP is a terrible measure of useful economic production.

As a trivial example: GDP goes up if I sneak into a car lot one night and set fire to all the cars.

We need a better measure of "useful" economic production.

Re: American Equity

#375
As a tax reform idea this is extremely promising.

I hope that one or more silicon valley billionaires run for national office on this kind of platform.

Sam is smart to point out that one of the main friction points is how this kind of thing pertains to immigration.

What's missing is an updated version of the narrative behind give us your tired, your poor, your huddled masses. Instead we get the vile rhetoric of Donald Trump that blames immigrants and minorities for all sorts of problems.

The American version of this sort of program needs to be fundamentally different from the "stipend" given to Saudi citizens by their elitist monarchs, and it cannot be designed to serve a similar political function (keeping the masses content).

Instead, we must view basic income as a system of positive and negative taxation that preserves the incentives individuals have to work hard to improve their own outcomes.

It must also eliminate the many perverse incentives and psychologically defeating categorizations (welfare, workers comp, etc.) that assault the dignity of those receiving income from the state today.

There are many costs of poverty that are not typically accounted for properly -- the harm done to children whose parents can't manage adequate prenatal or early childhood care, the human capital wasted by those who experience a setback that makes their planned investment in their own skills financially unwise, the time and energy wasted attempting and policing all sorts of major and minor fraud related to state payments, etc.

The biggest enemy to progress in America is the zero-sum mindset that plagues so many people and fuels their resentment toward immigrants. The areas of the nation facing the most decay and the least hope are the ones that seem to have adopted this mindset.

Re: American Equity

#376

Earlier quoted context omitted.

Universal basic income. He wants to (numbers _entirely fabricated here_) tax 20% of US GDP and then give that money evenly to all adults, therefore giving every adult American an equal share of 20% of the GDP (which would be about $14,000 per year per adult).

You can't tax the GDP, it's a calculation on the state of the exonomy not a cash flow to the state.

Of course you can tax GDP, every country in the world already does it. Surprisingly few people seem to be aware that GDP is the same thing as GDI, the sum of all income earned in a country in a year, the vast majority of which is already taxed.

About 60% of all US income (GDI) is compensation for labor (salaries, wages, benefits), 40% compensation for capital (dividends, interest, rents). Both parts are already taxed, at varying rates. The total amount of taxation is about 33% of GDI, while total spending is about 36% (the deficits is filled by borrowing).

Since the entire article looks like a big tax and transfer proposal, it's pretty bizarre to omit almost all basic government accounting, except for a throwaway footnote. The analogy with joint-stock companies or Homestead acts are neither here nor there. The government owned a lot of American land back then. It doesn't not own a large share of of current American corporations, nor many laborers. So the way to pay any significant "citizen's dividend" is boring old taxes.

A much better discussion with concrete numbers and speculation on incentive effects can be found here: https://arstechnica.com/civis/viewtopic.php?f=24&t=1286141&s...

Re: American Equity

#377
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.

>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.

> buying and building are two different things

Consider the way Kickstarter projects describe their "backers". On the "Why Kickstarter?" page they say backers are "helping to create something new". Yet, one could easily consider Kickstarter simply a website for pre-orders, no different from buying in any other method.

The line between a buyer and a backer/builder isn't so clear.

Re: American Equity

#378
post #29

Earlier quoted context omitted.

>do what nobody has the balls to do: tax wealth Just to clarify, nobody in the US is doing this, but it's not unheard of elsewhere. For example, Norway has a wealth tax of about 0.85% and there are some other examples at https://en.wikipedia.org/wiki/Wealth_tax#Current_examples .

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…

The economy does not care whether you put your money in a bank or under your mattress. The central bank will influence interest rates in response to your actions. What matters is the amount of money that's actually chasing goods and services.

If the central bank wants banks to have more reserves for loans, it buys assets from banks in exchange for newly created reserves. Money markets are a command economy.

Re: American Equity

#379
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.

But you did not do so out of the goodness your heart. They provided a product which provided enough utility to justify the cost. Producing such a product is where the value is created, not in the purchase of said product.

But the purchase provided capital, which enabled further production. Banks don't lend money out of the goodness of their hearts, either.

And, really, have you never bought something in small part because you liked the seller? That's the sentiment behind the exhortation to "buy local" or to buy Girl Scout cookies or from a local school's fundraiser. I suppose you could say a purchase is a contribution to the extent that the price exceeds the cost of production.

Re: American Equity

#380

Earlier quoted context omitted.

Because it's harder to corrupt a "pure" democracy. If you have a policy that is bad for the population at large, but good for your own interests, in a "pure" democracy then you will have to convince a majority of the voters to vote against their own interests.

I honestly don't really think you've thought this out. You might want to understand the existing structure of government before you propose replacing it on a whim. Here are some questions to get you started: * Why is there a Constitution? * Why are there 3 co-equal branches of government? What are they all there for? * Why is there an electoral college? * Why are Senators allocated by state while House members are al…

I'm proposing that the concept of states is obsolete now and we need to move to what I'd call a "unified America" policy, where we get as close as possible to a majority rule system of democracy. The best way I can think of to achieve that is to abolish the Senate and the electoral college.

If you think our current system of governance is working well, then please say so. If you think our system isn't working well, then please let me know how you propose to fix it.

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