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Who died and left the US $7B?

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Re: Who died and left the US $7B?

#421

Post by _DeadFred_ »

_bin_ wrote: post #162
Jedd wrote: post #94

A fascinating reddit post was mentioned here about a month ago - about the mildly famous (if a little macabre) 'Buy, Borrow, Die' cycle used by the obscenely-wealthy to - multi-generationally - avoid tax obligations. https://old.reddit.com/r/BuyBorrowDieExplained/comments/1f26... HN comments: https://news.ycombinator.com/item?id=41408772

This is something people love to rage about, yet it's not one with an obvious fix. The counterpoint is that this leaves money invested, which means others invest in other things, and still entails interest payments. It exists in part because you don't want someone who inherited his parents' house and wants to move in to go broke trying to pay taxes, or have to re-mortgage it, with an even stronger case with family fa…

If someone leases a car instead of buying it in many states they still have to pay sales tax, just on each lease payment. Somehow we can figure out how to charge sales tax on non-sales sales when it impacts the average joe, but not income tax on non-income income when it impact business owners because 'think of the business'. I don't see how taxes when someone extracts value from their company is any different or more difficult than taxing Joe average 'sales tax' on a lease payment.

The business is irrelevant. We are talking about the tax on the person who is getting income because our government functions from taxes on income. Just like how we charge sales tax on a non-sale when state government functions on taxes on sales. Tax business owners when they extract value from their business.

Re: Who died and left the US $7B?

#422

Post by jncfhnb »

mmcdermott wrote: post #390
jncfhnb wrote: post #331

Earlier quoted context omitted.

And you principally protect your property by… wait for it… paying taxes to the state to uphold law and order

While I'm sure that someone somewhere objects to paying for law and order, I think most tax grumbling comes from taxes rising (and, arguably, still not rising enough) to pay for bigger and bigger programs with an increasingly tenuous relationship to law or order. Not everyone objects to every line item, of course, but the bigger the budget gets the more certain it becomes that those rising taxes are not just to keep…

Yes that is the nature of compromise

Re: Who died and left the US $7B?

#423

Post by jjav »

pdonis wrote: post #272
jjav wrote: post #256

Earlier quoted context omitted.

> therefore we should set constraints on what the majority can do Which inevitably leads to the question: who should get the power to do that and why they, specifically?

You have it backwards. The actual question is, how did the majority magically get the power to enforce its will on the minority in the first place?

> You have it backwards. The actual question is, how did the majority magically get the power to enforce its will on the minority in the first place?

This doesn't answer my question at all.

Who should decide those limits, and why they? Who pics them?

Think of a thought experiment: A new city/town/state/country is getting started (let's assume peacefully somehow, this is a thought experiment).

Who gets to set those limits on democratic action?

One choice that comes to mind is everyone gets together and pics the wisest person in the crowd = representative democracy.

Another choice is the strongest bully in the group beats everyone up and sets the laws however he likes = dictatorship.

What other choices? And which one should be best?

Re: Who died and left the US $7B?

#424

Post by hgomersall »

kelseyfrog wrote: post #234
VirusNewbie wrote: post #209

Earlier quoted context omitted.

How does that burn the money? If the government is spending the money, it's going to federal employees and purchasing good and services from the general economy.

It helps to conceptualize the circuit of money as it flows from government(G) to the private sector(P) back to the government as G-P-G. The outlays(G-P) and receipts(P-G) can both be increased or decreased to affect aggregate demand. MMT's view is that inflation can be a result of aggregate demand outstripping economic capacity, though not the only one. Supply-side constraints, resource shortages, or structural bottl…

Please everyone read this comment. Any disagreements should come with relevant references showing how it's wrong.

An additional point to add is the mechanism by which taxation controls inflation. Tax serves to suppress demand in the private sector, freeing up resources that can then be bought at non-inflated prices. This is why super wealthy people are irrelevant to a sovereign government's ability to spend; their marginal propensity to consume is too low to be seriously impacted by normal levels of taxation. It's also why tax has to be broad base to be useful.

Re: Who died and left the US $7B?

#425

Post by logifail »

CPLX wrote: post #287
_bin_ wrote: post #213

Earlier quoted context omitted.

You can't just arbitrarily set the status quo that way, can't just sneak a premise that the state has default a right to collect a piece of arbitrary appreciation on an asset (as all assets are used for speculation) when the owner hasn't actually gotten cash from that, and that any government that doesn't tax that is just cutting someone a break on something rightfully owed. The state of nature is no tax, and as it's…

We (almost) invariably tax money when it changes hands. Like if you own something and then I own it, there's a tax. If I give something of value to someone else, the government takes a cut. There's a ton of nuance there, sometimes intended to avoid certain negative consequences that feel like double taxation or that provide peverse incentives. But that's the general premise. If you pay taxes on your income and then u…

> We (almost) invariably tax money when it changes hands. Like if you own something and then I own it, there's a tax [..] But that's the general premise.

I appreciate HN is USA-centric, but over on this side of the pond it's nowhere near as simple as that.

> If you pay taxes on your income and then use it to buy something from me, I have to pay taxes on it too. That's my income now.

Except that companies - even one person companies(!) - generally pay taxes on their profits, not their total income or revenue.

Re: Who died and left the US $7B?

#426

Post by AnimalMuppet »

logifail wrote: post #417
Wytwwww wrote: post #370

Earlier quoted context omitted.

> The state of nature is no tax, and as it's unpleasant Being able to accumulate capital, at least without having to resort to extreme violence is also about as "unnatural" as it gets.. No taxes = No government = No excess (above subsistence level) accumulation of assets

> Being able to accumulate capital, at least without having to resort to extreme violence is also about as "unnatural" as it gets.. (This is a genuine clarifying question, because I'm struggling here) are you suggesting that saving is somehow unnatural?

I believe that the claim is this: In the long scope of history, being able to accumulate money without having to be strong enough to defend it is really rare.

Re: Who died and left the US $7B?

#427

Post by Wytwwww »

NoMoreNicksLeft wrote: post #406
Wytwwww wrote: post #376

Earlier quoted context omitted.

> Can I just walk up to the bank and say "hey, I have $100 billion worth of Facebook stock, gibs me da money"? No, but assuming you are on Facebook's board / in upper management you can conspire with the rest of the board to get rid of Zuckerberg (possibly permanently) and share the company amongst yourself. ARM China seems like somewhat close example of what can happen when there is no government willing to protect…

> No, but assuming you are on Facebook's board / in upper management you can conspire with the rest of the board to get rid of Zuckerberg (possibly permanently) and share the company amongst yourself. Yes, if you want to oust him and take over as CEO, then boards of directors have that power. But that's more about his job security. When he leaves, he leaves with just as much stock as he ever had, and in the case of s…

> Somewhere down near $0.

> complicated structures

I guess. But I just don't see how could the stock market (in its current form) or most of those complicated structures exist without governments. Of course it's a silly discussion since Facebook in its current form (including corporate and ownership structure) wouldn't be a thing without all of that.

> in the complicated structures that make it worthless just about as soon as it's stolen.

Facebook is still highly profitable, arguably without any government regulation it could be even more profitable. Why share any of that value with the shareholders who can't really sue you or do anything else? Sure if you did that nobody would trust you if you started a new company and were looking for investors (which is why Facebook wouldn't exist in the first place in a system that allows that) but that doesn't really matter if the government suddenly disappeared.

Not saying that Facebook's upper management would immediately try pulling off something like that it's just seems like the natural long-term outcome. Political/social instability is usually already priced in, so FBs valuation would collapse just because something like that became an option regardless of Meta's/FB's intentions. At that point the cost of "confiscating" shares or similar shenanigans wouldn't really be that high since being in direct control of the company would be worth a whole lot more than owning some theoretical share of it.

> allow ARM China to pull such a stunt, or it's impossible.

Why? What could ARM/Softbank do if their Chinese subsidiary decided to just ignore them while continuing to use their IP. Of course their whole business model couldn't exist in the first without any way to enforce contracts since the companies actually manufacturing the chips would just steal that IP themselves.

Re: Who died and left the US $7B?

#428

Post by Salgat »

jandrewrogers wrote: post #363
Salgat wrote: post #297

Earlier quoted context omitted.

I don't get why people say a tax on unrealized gains is not feasible. All it means is that a percent of your investment becomes "realized" every year and you sell a portion of your investment to cover it. So if you have a billion dollars in stocks and you have to realize 10% of it in a year, you sell enough stock to cover the $20 million and the other $80 million becomes realized and never taxed again (only future ga…

The vast majority of assets held by the ultra-wealthy are non-liquid. Thinking that these assets are "stock" that you can just "sell" is fundamentally misunderstanding the nature of the problem. You can't force realization for tax purposes because in most cases there is no feasible way to realize notional gains. Reality doesn't care if it is inconvenient for the government that assets with unrealized gains have no re…

Oh I'm fully aware of that the ultra wealthy will have to sell off some of their assets. Mind you if this exists, the market will automatically build this assumption into the net worth of an asset. If anything, it will help encourage diversification, overall improving the health of the economy.

Re: Who died and left the US $7B?

#430

Post by [deleted] »

logifail wrote: post #417
Wytwwww wrote: post #370

Earlier quoted context omitted.

> The state of nature is no tax, and as it's unpleasant Being able to accumulate capital, at least without having to resort to extreme violence is also about as "unnatural" as it gets.. No taxes = No government = No excess (above subsistence level) accumulation of assets

> Being able to accumulate capital, at least without having to resort to extreme violence is also about as "unnatural" as it gets.. (This is a genuine clarifying question, because I'm struggling here) are you suggesting that saving is somehow unnatural?

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