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Au Revoir, Entrepreneurs

nytimes.com

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Re: Au Revoir, Entrepreneurs

#51

Post by [deleted] »

jedrek wrote: post #40
Silhouette wrote: post #28

Earlier quoted context omitted.

Moreover it's merrily intermixing entrepreneurs problems with banking problems. This is a big problem with current envy-driven politics surrounding wealth. A lot of people don't like seeing bankers with big bonuses after they trashed the economy for everyone else. They're suspicious of old money children who have inherited a fortune but seem to have contributed little of value themselves. They're envious of highly pa…

> This is a big problem with current envy-driven politics surrounding wealth. It seems like most of the envy is more perceived by the ultra-rich (or wannabes) than actually exists... > I like to think that if the people supporting these high rates of tax for those with some above average level of wealth realised who they were really targeting, we'd have a different attitude to taxation today. You realize the 75% tax…

[deleted]

Re: Au Revoir, Entrepreneurs

#52

Post by WalterBright »

nraynaud wrote: post #48
WalterBright wrote: post #44

Earlier quoted context omitted.

>they know that only a very few people get out of their birth class Ironically, high income taxes will ensure that result.

http://en.wikipedia.org/wiki/Social_mobility#Country_compari... this is completely wrong. edit: and this is frightening to see this kind of thinking on HN, this is not Fox News here, we all have access to the same google.

I'm curious as to what you think of the first century of the US, where income taxes were 0% and tens of millions of people rose from poverty into the middle class.

Also, 85% of American millionaires are self made (see "The Millionaire Next Door").

Re: Au Revoir, Entrepreneurs

#53

Post by nraynaud »

WalterBright wrote: post #52
nraynaud wrote: post #48

Earlier quoted context omitted.

http://en.wikipedia.org/wiki/Social_mobility#Country_compari... this is completely wrong. edit: and this is frightening to see this kind of thinking on HN, this is not Fox News here, we all have access to the same google.

I'm curious as to what you think of the first century of the US, where income taxes were 0% and tens of millions of people rose from poverty into the middle class. Also, 85% of American millionaires are self made (see "The Millionaire Next Door").

So you select one country, over a carefully selected period of time, you select one parameter amongst hundreds to explain one other. I'm not very good at US history, but slavery, an almost infinite amount of natural resources comes to mind, more that the tax system. While during this time European countries were still wasting resources in wars, throne successions and a mostly feudal system.

If I give you another country that pushed people out of poverty into middle class with heavy taxes (Germany after the war for example), then I win at telling the taxes are not the primordial criterion?

Or maybe we cut the crap and we look at global data, statistics and economic theory instead of looking at one datapoint and make it an example.

Millionnaires are a very small population, they are statistically irrelevant at the people level. Having a very few millionnaires, all of them self made, doesn't influence the social mobility. Otherwise, a few winners at the lottery in a very poor country (imagine the winners being more numerous than the war profiteers) would be enough to claim that it's a country where there is social mobility. You're just looking at the statistics of an infinitely small population.

edit: and I probably forgot to throw some Chinese railroad workers in there.

Re: Au Revoir, Entrepreneurs

#54

Post by yaantc »

WalterBright wrote: post #44
nraynaud wrote: post #41

Earlier quoted context omitted.

This is not a taxation by envy, this is Adam Smith "ability to pay" theory, it's the guy who rules UK who invented it, it can't be wrong, on an authority ground! Man! Adam Smith! You have to understand that absolute tax rate is just not meaningful, you can't say it's high or low, you need a reference. The real question is: where does the money go? In France it's easy the accounting is public: it goes mainly into reti…

>they know that only a very few people get out of their birth class Ironically, high income taxes will ensure that result.

Then we should have higher social mobility in the US than in France right? But it doesn't seem to be the case (look for "Country comparison"): https://en.wikipedia.org/wiki/Social_mobility

Note also that the northern Europe countries are much better than either France or the US. Not really low taxation countries either.

Re: Au Revoir, Entrepreneurs

#55

Post by marvin »

kybernetyk wrote: post #8

> Taxes, Frustration, More Taxes Uh, that's how I could describe my current situation in Germany. We were a little too successful last year and now the tax advance payments are endangering our liquidity. It feels as if this year I had spent more time reading about taxes and regulations than working on the business. Something is wrong when taxes become such a prominent part of your daily business life ...

In Norway, you have to pay net worth tax of 1% of your assets in excess of ~$200,000. So if you own 2 million of stock in an unlisted company, you are on the hook for $20,000 in additional taxes every year. Most successful entrepeneurs here have to sell stock every year just to pay their tax bill.

Company profits tax of 27%, capital gains tax of 28% and personal income tax of ~35% ensures that you even in the best case get to keep (We also have a 25% VAT on all consumer purchases, including "compulsory" products purchased from the state such as the national broadcasting license or local government residential parking permits).

And still you read in the newspaper every other week of someone wanting to create the "new Silicon Valley" in some Norwegian city. It's delusional; the incentives are completely wrong.

Re: Au Revoir, Entrepreneurs

#56

Post by WalterBright »

nraynaud wrote: post #53
WalterBright wrote: post #52

Earlier quoted context omitted.

I'm curious as to what you think of the first century of the US, where income taxes were 0% and tens of millions of people rose from poverty into the middle class. Also, 85% of American millionaires are self made (see "The Millionaire Next Door").

So you select one country, over a carefully selected period of time, you select one parameter amongst hundreds to explain one other. I'm not very good at US history, but slavery, an almost infinite amount of natural resources comes to mind, more that the tax system. While during this time European countries were still wasting resources in wars, throne successions and a mostly feudal system. If I give you another coun…

Is it really careful cherry picking to pick one of the largest countries in the world over a 100 year timespan that had 0% income taxes?

It's a tough case to make that slavery in the US, 1800-1865, transformed tens of millions from poverty into the middle class. The southern states failed to industrialize, which is arguably one of the causes of the Civil War and one of the reasons they lost. The industrialization and rapid economic growth happened in the free states. There are innumerable books on this, but I suggest Bruce Cabot's "The Civil War" which discusses the two economies.

You might want to compare it with what happened in South America over the same time period.

Re: Au Revoir, Entrepreneurs

#57

Post by Silhouette »

mpweiher wrote: post #42
Silhouette wrote: post #28

Earlier quoted context omitted.

Moreover it's merrily intermixing entrepreneurs problems with banking problems. This is a big problem with current envy-driven politics surrounding wealth. A lot of people don't like seeing bankers with big bonuses after they trashed the economy for everyone else. They're suspicious of old money children who have inherited a fortune but seem to have contributed little of value themselves. They're envious of highly pa…

This is a big problem with current envy-driven politics surrounding wealth. This is not envy driven. Not wanting bonuses for bankers who were bailed out by public money has to do with bonus-driven bad decisions being a fundamental cause of the crash that cost everyone else trillions of dollars in wealth, economic growth, unemployment benefits and bailouts. Look up "moral hazard", and note that they are up to the same…

Looking at the replies to my previous post, I'm guessing my choice of words had connotations for some readers that I didn't intend. My point was merely that a lot of the people arguing for high tax rates for above average earners today seem to be doing so in the belief that they will be collecting more money from the super-rich, whom they regard for whatever reason as being legitimate targets. However, the reality is that it's usually not the bankers with million pound/dollar bonuses or the pop stars flying to their concert on a private jet who are ever going to be paying those rates, because they all have sufficient mobility to escape the high tax rates by moving their assets and/or themselves elsewhere. So, I think it's more likely to be those who are significantly wealthier than average but not super-rich who get hit by these rates, and many of those people are self-made and the lucky ones.

For example, while I'm not an expert on French taxation, I know that in the UK right now there is considerable debate about a 40% marginal tax rate for those earning above the higher rate threshold, because that threshold has been steadily reduced in real terms to the point where unlike the situation when that rate was first introduced, today quite a few people working full time in ordinary professional jobs would get caught in that bracket. (For context, with the latest tax bands and income levels, well over 4M taxpayers will be caught in that bracket, from a total population approaching 64M.)

Then there's a marginal 60% rate for a while when you hit £100k, which is certainly a very nice salary to be earning, but at a little over three times the national average it's hardly super-rich. It does cover the senior positions in some professional and executive management roles, but it also catches the entrepreneur who takes a couple of years of very low salary (forfeiting their ability to take more salary at lower marginal tax rates, of course) and then makes good on their business and is able to draw a larger salary the next year.

If you're interested in what people in different relatively well-paid professions really earn, you might find this helpful; it looks like being a doctor or a pilot is a promising option if you don't fancy the management path:

http://www.theguardian.com/money/2013/dec/18/what-are-the-be...

In short, I believe a lot of people don't think much of the super-rich, and they would be happy to see them get dinged for more tax. Sometimes there is some objective justification for this, but if anyone reading this thinks there's really no envy involved, I've got a nice second hand car to sell them. In any case, a lot of the people keen on the higher tax rates probably don't realise who is really going to wind up paying them, and how little effect they really have on the super-rich.

Re: Au Revoir, Entrepreneurs

#58

Post by Silhouette »

jedrek wrote: post #40
Silhouette wrote: post #28

Earlier quoted context omitted.

Moreover it's merrily intermixing entrepreneurs problems with banking problems. This is a big problem with current envy-driven politics surrounding wealth. A lot of people don't like seeing bankers with big bonuses after they trashed the economy for everyone else. They're suspicious of old money children who have inherited a fortune but seem to have contributed little of value themselves. They're envious of highly pa…

> This is a big problem with current envy-driven politics surrounding wealth. It seems like most of the envy is more perceived by the ultra-rich (or wannabes) than actually exists... > I like to think that if the people supporting these high rates of tax for those with some above average level of wealth realised who they were really targeting, we'd have a different attitude to taxation today. You realize the 75% tax…

You realize the 75% tax rate is on year income exceeding one million euro, right?

Yes, though please note that I was commenting on a general trend of confusing going after bankers with actually catching entrepreneurs, not on the French situation specifically.

One million euro is 34x the average salary in France, which means that anybody hit by that tax makes more money in less than two years than the majority of their countrymen will earn in their entire lives.

By the time you allow for progressive taxation at lower levels, and for the other taxes in the French system, the multiplier for how much money those people are actually keeping is smaller than that. Of course it's still a wide gap, but let's not pretend these people are rich enough to retire after two years on that salary.

People don't exist in a vacuum, economies are wonderfully interconnected things and acting like the people who take risks and succeed are some kind of superheroes who shouldn't give back because of some deranged notion that they "did it themselves" is myopic, dishonest and, to be frank, total bullshit.

I have little interest in debating in detail with someone whose argument boils down to swearing at me and calling me delusional, but please consider this: taking the argument you seem to be making to its logical conclusion, why shouldn't everyone pay 100% taxes and have the state pay for everything, because we're all part of the same system?

Re: Au Revoir, Entrepreneurs

#59

Post by crusso »

markvdb wrote: post #34
crusso wrote: post #30

Earlier quoted context omitted.

increasing evidence of illicit business practices among the highest earners Corruption is the core problem. I think that worry about corrupt businesses is misplaced when a corrupt government is 10x worse. everything from insider trading There's a good example right there. Congress can inside trade. It's absolutely extraordinarily corrupt. They wrote a law a while back to prevent it when there was some press on it, bu…

I think that worry about corrupt businesses is misplaced when a corrupt government is 10x worse. Worrying about private sector corruption misplaced? One shouldn't have to tolerate _any_ kind of corruption.

Don't disagree, but in terms of priority on how we're going to fix the world...

Re: Au Revoir, Entrepreneurs

#60

Post by argonaut »

crdoconnor wrote: post #39
argonaut wrote: post #9

Earlier quoted context omitted.

The 75% wealth tax point was only a minor point in an article that expressed many many other points and anecdotes, and whose greater argument was that the entrepreneurial climate in France was poor. The fact that your argument focuses on this minor point in order to dismiss the whole point is rather telling about what consent is being manufactured here...

>The 75% wealth tax point was only a minor point in an article that expressed many many other points and anecdotes, and whose greater argument was that the entrepreneurial climate in France was poor. Yes, the greater argument was that "the entrepreneurial climate is poor" because they wouldn't get very much sympathy saying "stop taxing the ultrawealthy so much. We don't like it!". Nonetheless, it's pretty obvious wha…

It's interesting how your argument insists on collapsing this issue into a black and white issue: it's the elites whining and not in any way about entrepreneurs. And yet the only evidence you provide is one or two quotes where the article talks about the anti-wealth sentiment.

Fun fact: an appreciation of wealth-generation is absolutely necessary and goes hand in hand with encouragement of entrepreneurship. Follow the incentives.

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