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Modeling a Wealth Tax

paulgraham.com

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Re: Modeling a Wealth Tax

#891

Post by mdorazio »

imgabe wrote: post #885
marakv2 wrote: post #875

Earlier quoted context omitted.

Because society helps you grow your wealth faster. Better trained workers, happy and healthy workers, a functional medical system. These are things that help your business create more wealth. As the grandfather comment said, it's wanting the 30c bonus without paying the 20c fee.

Society may make wealth in general grow faster, there is no guarantee that it will help your specific wealth grow faster. You pay a wealth manager because they manage your wealth, specifically. They examine what opportunities are suitable for you based on your goals and risk profile and seek those out. "Society" doesn't do anything like that. Let alone the fact that you are already paying taxes: income taxes, propert…

1) Your reasoning, even if potentially valid (I don't think it is) is incredibly selfish and leads to the exact scenario of rising inequality that we have today.

2) Social benefits accrue to everyone, including wealthy people. They just accrue equally to everyone rather than unequally to your specific wealth. That's an important distinction here because you're basically saying you should get favoritism for your wealth because you happen to have more of it. That's a bit of a weird stance.

3) In case it's not clear, the US doesn't currently collect enough tax revenue to actually pay for a well-functioning society. Take a look at [1]. If you want a first-world society on par with Denmark or Sweden, guess what...

[1] https://www1.compareyourcountry.org/tax-revenues

Re: Modeling a Wealth Tax

#892

Post by tchaffee »

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.

They are not. In 2016 China produced about $4.566 trillion in manufactured goods. Coming in 2nd place, in 2016 the U.S produced about $3.602 trillion in manufactured goods.

Re: Modeling a Wealth Tax

#893

Post by mdorazio »

agensaequivocum wrote: post #874
mazspork wrote: post #583

Earlier quoted context omitted.

Inequality in your country has risen dramatically the past 30 years. That's what your legislators are trying to address. A lot of value is created in the early stages. Should that be exempt? Remember, companies don't exist primarily to pay back investors, their first objective is to contribute to society. My €0.05

> Inequality in your country has risen dramatically the past 30 years. Why should I or anyone care?

In case you're actually serious and not just trolling...

https://en.wikipedia.org/wiki/Effects_of_economic_inequality

Re: Modeling a Wealth Tax

#894

Post by ghostwriter »

mdorazio wrote: post #882
imgabe wrote: post #861

Earlier quoted context omitted.

You don't help losers by knocking down the winners. Cutting off Usain Bolt's legs isn't going to make you run any faster.

1) Framing it as "winners" and "losers" is entirely the problem . It's a pretty poor mindset when you equate getting rich with "winning" while ignoring everything else, including factors that lead to people getting rich in the first place. 2) A footrace (and sports in general) is a really poor metaphor for economics & tax policy. A better metaphor is pruning trees in a forest so that smaller ones actually get enough…

> A footrace (and sports in general) is a really poor metaphor for economics & tax policy. A better metaphor is pruning trees in a forest so that smaller ones actually get enough light to grow instead of withering away on the floor.

By that standard, a legit analogy in that case would still be basketball. Let's cut legs a bit to everyone taller 6' so that shorter ones actually get enough opportunity to score, instead of them abandoning this amazing sport and spending their days at office in a hope to get wealthy by their economic skills one day.

Re: Modeling a Wealth Tax

#895

Post by nordsieck »

pydry wrote: post #857
nordsieck wrote: post #851

Earlier quoted context omitted.

> 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 chang…

> Singapore exists at the behest of the United States.

That's true of basically 85% of the world. The only really independent countries, as far as I can tell are the US, China and Russia with France, Germany, UK and India on the edge.

I'm not sure what your point is unless you think the US will suddenly reverse its centuries old policy and start colonizing the world.

Re: Modeling a Wealth Tax

#896

Post by CryptoPunk »

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.

The fact that are still super-rich people doesn't imply that such interventions did not have a negative on the number of people who are super-rich in the US. High taxes have a well-established negative effect on capital formation, and investment in-flows. This isn't some conspiracy theory promoted by the super-rich to manipulate you.

I think you're giving the arguments made against high taxes a very shallow treatment.

Re: Modeling a Wealth Tax

#897

Post by rubber_duck »

tchaffee wrote: post #892
imgabe wrote: post #838

Earlier quoted context omitted.

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.

They are not. In 2016 China produced about $4.566 trillion in manufactured goods. Coming in 2nd place, in 2016 the U.S produced about $3.602 trillion in manufactured goods.

He didn't say manufacturing output but jobs, a more relevant number for that argument would be total labor cost in the sector and it's change over time between two countries.

Re: Modeling a Wealth Tax

#898

Post by rjbwork »

agensaequivocum wrote: post #874
mazspork wrote: post #583

Earlier quoted context omitted.

Inequality in your country has risen dramatically the past 30 years. That's what your legislators are trying to address. A lot of value is created in the early stages. Should that be exempt? Remember, companies don't exist primarily to pay back investors, their first objective is to contribute to society. My €0.05

> Inequality in your country has risen dramatically the past 30 years. Why should I or anyone care?

Because historically, excessive inequality doesn't end well for the haves.

Re: Modeling a Wealth Tax

#899

Post by DINKDINK »

masonium wrote: post #852
DINKDINK wrote: post #820

Earlier quoted context omitted.

>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".

>If you have $10 million in the bank, you're not just a "saver" or "refraining from consumption".

If an economic agent holds a money, they are -- by definition -- saving their money. If they instead decide to speculate with the money "Hmm I think gluten-free bread will be in higher demand next year, better buy ovens today, to sell to the baker then" they consume scarce resources (labor and materials to make the oven). If they invest the money in a business endeavor "Hmm I need to allocate capital from money to wheat, ovens, to turn a profit as a baker to produce bread" they consume scarce resources. These capital allocations change the exchange rates of these goods.

Try as you might to avoid it, all forms of punishing cash holding induces undue consumption.

Re: Modeling a Wealth Tax

#900

Post by nordsieck »

dragonwriter wrote: post #855
nordsieck wrote: post #851

Earlier quoted context omitted.

> 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…

> 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.)

I'm not sure what your point is. Unless you're claiming that cities spontaneously generate millionaires?

From what I can tell, NYC has lots of millionaires primarily because rich people like to live there, so rich and talented people move to NYC from all over the US.

The same thing is true of Singapore, except that - as you so rightly point out - there is no "rest of Singapore" for them to come from. Instead, they come from the rest of the World, by necessity.

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