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How to convert between wealth and income tax

paulgraham.com

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Re: How to convert between wealth and income tax

#571

Post by NoMoreNicksLeft »

Dylan16807 wrote: post #567
lazide wrote: post #498

Earlier quoted context omitted.

If owning stock (passively) all the sudden got taxed to any notable degree, you’ve just dramatically changed the value calculus for most of the world economy at this point. It would be shocking if the price didn’t crash.

That sounds like a one-time thing. Once things stabilize you wouldn't see a big fluctuation every time a CEO has to pay taxes. Also normal people and the mildly rich and retirement funds and many other big sources of ownership wouldn't be taxed, so I don't see prices actually crashing.

>That sounds like a one-time thing.

Repeatedly pushing the "destroy the world economy" multiple times per day is most likely not going to be a "one-time thing". But who knows... maybe you're right and economics doesn't work like it has been documented to work by the world's experts for the last 100 years or so.

Re: How to convert between wealth and income tax

#572

Post by vannevar »

deeponey wrote: post #467
pzo wrote: post #436

Earlier quoted context omitted.

at least all financial assets (stocks, etc) are easy to assess value so why not start with that? same with gold, silver etc. Some minimal amount you can make it nontaxable to reduce administrative burden.

this a million times. Land easy, already being taxed. Any regulated financial instrument, also easy, take the minimum average yearly price of held assets. Tricky things like privately held companies, maybe we solve that one later, but even then there are valuations made at various points, anchor to those, be conservative in every case. If the gov primarily exists to enforce property rights... then people should pay i…

If you properly taxed real estate in a progressive way, you wouldn't have to bother with taxing paper wealth at all---the collective value of paper is already reflected in the price of land. People with large paper fortunes inevitably buy real estate, and when they do, their paper wealth inflates the price. This is why median residential housing prices have dramatically outpaced median wage increases, along with anything else tied to real estate, like sports and concert tickets.

Re: How to convert between wealth and income tax

#573

Post by dh2022 »

armitron wrote: post #568
dh2022 wrote: post #407

Earlier quoted context omitted.

If the ultra wealthy move out a few people will lose their jobs (their family office, some accountants, some property managers will work the same job for someone else). But overall people will not be worse off. We have been doing this exact experiment in Seattle sine 2024 when Bozos moved out. And last month Howard Schultz moved out as well. The sky did not fall. Another example- did the average Londoner get better o…

The level of delusional wishful thinking here defies belief. Seattle and all other US "left" strongholds are decomposing and falling apart, with parts of these cities worse off than the third world. Instead of realizing that it's ineffective, incompetent and detached from reality politicians that have brought ruin and misery, you want to hand them even more money. Brilliant.

I don’t really care about whatever taxes the politicians will heap on the rich. My point is that if the rich leave it will not the economic calamity so many pundits forecast. Life will go on without rich people.

Just look at Oregon for example. It’s a lot like WA state but without the billionaires. And it is a really nice place to live. If WA state ends up like Oregon I won’t mind.

Re: How to convert between wealth and income tax

#574

Post by NoMoreNicksLeft »

vineyardmike wrote: post #518
sokoloff wrote: post #418

Earlier quoted context omitted.

> no "I'm a billionaire so I can spend as much as I want on myself" To me, that would seem extremely difficult for Congress to pass a law restricting individual speech in this particular way that would pass First Amendment muster, and I don’t think we should be at “let’s just set aside the Constitution when it clearly says something we don’t like” because I don’t think that ends well in today’s political climate (or…

We already have laws that limit how much you can give to someone else’s campaign. We’ve already crossed that threshold in terms of “free speech”.

An old law, belonging to a set of laws which have been eroded over the decades such that it's surprising this one hasn't been set aside already. Both Congress and the courts have changed in ways that won't ever let that be passed again, or let it stand if it somehow is snuck into law. That era is over, you will never succeed in bringing it back.

And if you think anything's going to change in November, you're going to be really disappointed.

Re: How to convert between wealth and income tax

#575

Post by breakyerself »

credit_guy wrote: post #516
mannanj wrote: post #471

Earlier quoted context omitted.

Does the government not have the goal to make society a more just society? When did that stop being a priority of government? Even a teeny, tiny one?

Sure, the government has that goal too. But the government has many tools, and using taxes for that is using the wrong tool. Or maybe you think that billionaires owe us not only to pay taxes, but also to play nice, and pay those taxes with a smile on their face?

Billionares shouldn't exist. We shouldn't just tax them for the revenue. We should tax them to limit the undemocratic power that comes with excessive wealth.

Re: How to convert between wealth and income tax

#576

Post by archagon »

triceratops wrote: post #340
fourseventy wrote: post #175

Earlier quoted context omitted.

The idea that rich people don't pay taxes is a myth. The top 5% richest people in America account for 60% of all of the federal income tax. The bottom 50% on the other hand only account for a total of 3%. When Elon sold a bunch of Tesla stock in 2021 he paid $11 Billion in capital gains tax on it... That's more than entire cities worth of people combined would ever pay for the rest of their lives.

> The top 5% richest people in America account for 60% of all of the federal income tax I see this repeated all the time and it's worthless without context. What percent of all income do the top 5% earn? What's their share of national wealth?

It’s a stupid thought-terminating quip entirely centered around a superficial “one number bigger than other” gotcha.

We live in a society where the wealthiest have orders of magnitude more wealth than everyone else. The taxes they pay are not proportional to that wealth, period.

Re: How to convert between wealth and income tax

#577

Post by lambdaphagy »

dh2022 wrote: post #566
WalterBright wrote: post #470

Earlier quoted context omitted.

Starbucks is moving its headquarters from Seattle to Tennessee. Many other businesses that are not large enough to interest the newspaper are moving out as well.

Like I said: the sky is not falling.

I don’t think I understand your argument. If a wealth tax causes the wealthy to leave then you have even less tax revenue than before, right?

Re: How to convert between wealth and income tax

#578

Post by cherry_tree »

roenxi wrote: post #475
BugsJustFindMe wrote: post #372

Earlier quoted context omitted.

> On the other hand, almost a majority of people already pay no federal income tax anyways. That's an irrelevant diversion though, because the measure that matters when discussing the fairness of taxes is how much people are left with at the end after paying whatever taxes they pay, including sales tax, income tax, and any other kind of tax. And for those particular people you're talking about the answer is very litt…

There is no consensus on what is "fair" to tax, you can find people arguing from 0% to 100%. And if we're talking about measures of fairness. A much better measure is something like trying to maximise the median living standard without sacrificing any one demographic. > And for those particular people you're talking about the answer is very little, next to none... So... where are the real resources coming from then?…

There is very little debate that you should be taxed proportionally to your total wealth; I.e. that the rich should pay more than the poor. In fact the only people trying to debate this are the rich who want to avoid paying back towards the society that enabled their success.

Re: How to convert between wealth and income tax

#579

Post by adverbly »

AnimalMuppet wrote: post #558
adverbly wrote: post #547

Earlier quoted context omitted.

Still, seems like table stakes. Start with georgist/pigouvian taxes, and then expand to other kinds of income/wealth afterwards. But Georgist taxes can go really far I'd imagine.

No, why? If we're going to do a wealth tax, then do a wealth tax . Why single out only one kind of wealth, and the kind that is not even the most important these days? (What's more important? IP. The value of Google, say, isn't in the land it owns. It's in the code, the database of web pages, and the google.com domain name.)

> Why single out only one kind of wealth

Because of some very good reasons. See: https://www.youtube.com/watch?v=smi_iIoKybg

> kind that is not even the most important these days

uhhh source on that? I'm pretty sure land is literally the largest asset class in the economy. Real estate is by many estimates over 2X as large as the entire combined global market cap of all publicly traded companies. https://europhoenix.com/blog/part-ii-on-asset-classes-size-o...

Re: How to convert between wealth and income tax

#580

Post by raincole »

ryandrake wrote: post #8

> To convert between wealth and income tax rates, you have to divide by the rate of return on capital. The conversion rate of 20 comes from assuming that the risk-free rate of return is 5%. This seems to only be true for people whose income entirely comes from their wealth, rather than their labor. The math doesn't math for someone on the other extreme end of the spectrum who has zero savings or investments and obtai…

In other words, PG is so rich now that he forgets the existence of less fortunate citizens.
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