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Modeling a Wealth Tax

paulgraham.com

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Re: Modeling a Wealth Tax

#851

Post by nordsieck »

cies wrote: post #778
patmcc wrote: post #704

This is simplistic to the point of absurdity, and doesn't model how any sensible wealth tax would be implemented or paid. First, any wealth tax being seriously discussed has a floor and/or has marginal rates, probably starting at 1 or 5 or 10 million (or higher). Second, taxes don't disappear into nothingness - they pay for civilization. It is clearly beneficial to everyone to live in a society where people are well…

> the idea that people [read: super rich] "will just move to another country" is very silly. This is a recurring theme in owners/investors: they always have some story that they will be forced to leave or close shop if some labour-proteaction-laws (like weekends, or 8h days, or banning of child labour), or taxes are implemented. It's a very old story, there's a history to it. Please note that we have weekends/8h work…

> Please note that we have weekends/8h work day/ban on child labour and also still have the super rich. They never left.

Some didn't leave.

There's a reason why Singapore has the highest concentration of millionaires in the world, and it's not because of their school system.

I'm not saying that all will leave, or even that most will, but some will.

Re: Modeling a Wealth Tax

#852

Post by masonium »

DINKDINK wrote: post #820
paulhart wrote: post #9

Someone forgot to model growth in the value of the asset, and/or putting the wealth to use. A wealth tax is, to an approximation, the equivalent of the "management fee" that an ETF charges, but with the revenues going to the government. If you have a bucket of money that isn't doing anything, then what value does it actually bring to the economy? Penalizing static value seems almost reasonable.

>Penalizing static value seems almost reasonable. Ah yes, the economic argument of "punish savers and people refraining from consumption will lead us to our Centrally Planned Utopia" >If you have a bucket of money that isn't doing anything, then what value does it actually bring to the economy? Do you and I live in the same reality? When a global pandemic has shown almost every single person on earth that cash balanc…

Except any reasonable proposal for a wealth tax typically leaves the first 5-10 million untouched and marginally taxes amounts larger than that. If you have $10 million in the bank, you're not just a "saver" or "refraining from consumption".

Re: Modeling a Wealth Tax

#853

Post by lazulicurio »

twblalock wrote: post #807
lazulicurio wrote: post #753

Earlier quoted context omitted.

> So now we should be penalizing unproductive assets? When did we all decide that was ok? We already do that---it's called inflation. And the justification used by economists is that the economy will collapse without inflation to incentivize spending money.

Inflation was not intentionally invented as a tax. It is a characteristic of a monetary economy. Economists prefer it to deflation because it deflation is worse, but that doesn't mean that we invented inflation on purpose as some kind of social engineering tool.

> that doesn't mean that we invented inflation on purpose as some kind of social engineering tool.

We didn't invent inflation, but we absolutely do set a target inflation rate as a social engineering tool. And the reason that deflation is considered "worse" is because it lets people keep equity in unproductive assets instead of liquidating it and moving the money into more productive assets.

Re: Modeling a Wealth Tax

#854

Post by TrackerFF »

DINKDINK wrote: post #820
paulhart wrote: post #9

Someone forgot to model growth in the value of the asset, and/or putting the wealth to use. A wealth tax is, to an approximation, the equivalent of the "management fee" that an ETF charges, but with the revenues going to the government. If you have a bucket of money that isn't doing anything, then what value does it actually bring to the economy? Penalizing static value seems almost reasonable.

>Penalizing static value seems almost reasonable. Ah yes, the economic argument of "punish savers and people refraining from consumption will lead us to our Centrally Planned Utopia" >If you have a bucket of money that isn't doing anything, then what value does it actually bring to the economy? Do you and I live in the same reality? When a global pandemic has shown almost every single person on earth that cash balanc…

You're confused.

We're talking about multi-millionaires, often in the tens of millions, and more.

No-one is saying that regular Joe's with $800 in their savings account should be penalized for just letting them sit.

Re: Modeling a Wealth Tax

#855

Post by dragonwriter »

nordsieck wrote: post #851
cies wrote: post #778

Earlier quoted context omitted.

> the idea that people [read: super rich] "will just move to another country" is very silly. This is a recurring theme in owners/investors: they always have some story that they will be forced to leave or close shop if some labour-proteaction-laws (like weekends, or 8h days, or banning of child labour), or taxes are implemented. It's a very old story, there's a history to it. Please note that we have weekends/8h work…

> Please note that we have weekends/8h work day/ban on child labour and also still have the super rich. They never left. Some didn't leave. There's a reason why Singapore has the highest concentration of millionaires in the world, and it's not because of their school system. I'm not saying that all will leave, or even that most will, but some will.

> There's a reason why Singapore has the highest concentration of millionaires in the world, and it's not because of their school system.

No, it's because it's a city-state, and millionaires tend to be urban, so comparison with countries with lower urbanization is misleading. New York City (which has a population not much larger, so it's a community of roughly comparable scale that, like Singapore, is 100% urban) has a notably higher concentration of millionaires than Singapore does. (1 in ~8.4 compared to Singapore's 1 in ~20.)

Re: Modeling a Wealth Tax

#857

Post by pydry »

nordsieck wrote: post #851
cies wrote: post #778

Earlier quoted context omitted.

> the idea that people [read: super rich] "will just move to another country" is very silly. This is a recurring theme in owners/investors: they always have some story that they will be forced to leave or close shop if some labour-proteaction-laws (like weekends, or 8h days, or banning of child labour), or taxes are implemented. It's a very old story, there's a history to it. Please note that we have weekends/8h work…

> Please note that we have weekends/8h work day/ban on child labour and also still have the super rich. They never left. Some didn't leave. There's a reason why Singapore has the highest concentration of millionaires in the world, and it's not because of their school system. I'm not saying that all will leave, or even that most will, but some will.

Money laundering.

Singapore exists at the behest of the United States. Its sovereign wealth fund is heavily invested in the United States and its geopolitical precariousness on the straits of malacca is predicated upon the implicit protection of the United States Navy.

It's a political choice to let millionaires flee there, just as it's a political choice not to tax them at home. A snap of the US's fingers will change Singapore's policy.

Like when Wrigley sent a US Congressman to visit - he snapped his fingers and chewing gum was no longer banned.

Re: Modeling a Wealth Tax

#858

Post by aesh2Xa1 »

imgabe wrote: post #838
cies wrote: post #778

Earlier quoted context omitted.

> the idea that people [read: super rich] "will just move to another country" is very silly. This is a recurring theme in owners/investors: they always have some story that they will be forced to leave or close shop if some labour-proteaction-laws (like weekends, or 8h days, or banning of child labour), or taxes are implemented. It's a very old story, there's a history to it. Please note that we have weekends/8h work…

Then why are all the manufacturing jobs in China and other countries without those labor laws? The remaining jobs in the US are salaried position where "8 hour workday" and "weekend" are often meaningless. Plus we're talking about a wealth tax in California. You can start a company in Nevada and still access the market of California just fine.

"Then who will purchase your cars?"

Let them leave. We have a government all the more for ourselves. We need not purchase products built with the exploitation of cheap, and even forced, labor.

Re: Modeling a Wealth Tax

#859

Post by eruci »

In a Communist dictatorship like Albania (where I grew up) it was sound government policy to raid the wealthy in times of financial need. We are a long way from that, but some leftist politicians are leaning hard in that direction.

Re: Modeling a Wealth Tax

#860

Post by [deleted] »

mrwww wrote: post #738
grellas wrote: post #551

After being one of the top-rated commenters on HN for some years, I have not commented in a long while. For what it is worth, here is my two cents on a topic - a wealth tax - that may seem on the surface to be benign but that is in fact just the opposite. Silicon Valley was founded in a spirit of freedom and flexibility but that spirit is clearly and dangerously on the wane insofar as the political environment surrou…

People in the USA somehow think that having a huge amount of loosers in society will turn out ok. Enjoy your ever growing prison population, crime, unemployment and inequality. But hey! You can become the next Bezos! Isn't that grand? Freedom baby!

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