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Modeling a Wealth Tax

paulgraham.com

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Re: Modeling a Wealth Tax

#961

Post by selfmodruntime »

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 you guys keep yapping about how you love america, and that should include loving your fellow countrymen?

Re: Modeling a Wealth Tax

#962

Post by selfmodruntime »

camhart wrote: post #940

How does a rich person being rich harm my chances of becoming rich myself? Until someone can answer this, I'll continue to believe a wealth tax is nothing more than legalized robbery. If it's a company using anti-competitive behaviors, attack that. If it's unfair laws due to lobbyist, fix it. If it's underpaid employees, figure out how to increase their pay. If housing/healthcare/education is too expensive, figure ou…

1. Rich people historically take wealth out of a country via offshore tax heavens. If money is spent on giga-companies instead of local businesses, it drains wealth from communities and creates inequality.

2. Taxation is not robbery at all. Rich people have used all public services at one point or another, it‘s only fair to pay back. They don‘t most of the time, so these services wither.

3. The „free“ market has shown time and time again that branches of business will steer to monopolies if you give them time. Look at amazon for example. You _cannot_ create an amazon competitor. Many have tried. All have failed.

4. Giga-Companies and Rich people have shown many times that they will just copy a good idea and steal your customers by using their giant existing consumer base.

Things like these don‘t make it impossible to „get rich“, but they make it very hard.

Re: Modeling a Wealth Tax

#963

Post by pkkim »

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…

Thanks for sharing. I don't expect to convince you but I want to make my opposing view clear.

For me the most important benefit of a wealth tax is eroding the wealth of billionaires. This is important because having that much money gives you _power_ in our society comparable to elected officials, but without any comparable accountability. If you have a billion dollars, you can employ two hundred people from your _personal wealth_ at $100k for fifty years each. Or, if you prefer, 2500 people for a four-year term. (This ignores the resources you have influence in deploying in business, though at least in that case there are other stakeholders. It also ignores connections.) This is a great deal of power, comparable to being an elected official, all the more so because elected officials are often constrained by politics. In my view, the existence of such a powerful and unaccountable interest group can only be a threat to democracy. Other commenters have outlined particular ways that this class has achieved its political goals in the USA. The class of billionaires poses such a threat that I would seriously consider giving up the IT revolution of the last fifty years to be rid of it.

Re: Modeling a Wealth Tax

#964

Post by nec4b »

patmcc wrote: post #934
CryptoPunk wrote: post #880

Earlier quoted context omitted.

The exasperated/condescending tone of your comment is really inappropriate, given the number of specious and economically fallacious arguments contained in it. Let's go through each: >>There's a reason failed states and unstable/developing countries generally aren't where people are looking to startup the next big tech company. There's a negative correlation between government spending levels as a percentage of GDP,…

>>>There's a negative correlation between government spending levels as a percentage of GDP, and economic growth rates. Your implication, that society is better off with high levels of taxation, is not supported by the science on the matter. I don't think your correlation suggests what you think it does - look closer at which countries have the highest GDP growth rates. Economic growth rates are not a good indication…

High GDP growth rate leads to high GDP down the road. How do you think the USA reached such a high standard of living.

Re: Modeling a Wealth Tax

#965

Post by nec4b »

comex wrote: post #925
CryptoPunk wrote: post #880

Earlier quoted context omitted.

The exasperated/condescending tone of your comment is really inappropriate, given the number of specious and economically fallacious arguments contained in it. Let's go through each: >>There's a reason failed states and unstable/developing countries generally aren't where people are looking to startup the next big tech company. There's a negative correlation between government spending levels as a percentage of GDP,…

> The exasperated/condescending tone of your comment is really inappropriate, given the number of specious and economically fallacious arguments contained in it. Your own comment is considerably more condescending. As for speciousness... > There's a negative correlation between government spending levels as a percentage of GDP, and economic growth rates. Your implication, that society is better off with high levels o…

>>That correlation is disputed, to say the least.

By whom?

Re: Modeling a Wealth Tax

#966

Post by camhart »

selfmodruntime wrote: post #962
camhart wrote: post #940

How does a rich person being rich harm my chances of becoming rich myself? Until someone can answer this, I'll continue to believe a wealth tax is nothing more than legalized robbery. If it's a company using anti-competitive behaviors, attack that. If it's unfair laws due to lobbyist, fix it. If it's underpaid employees, figure out how to increase their pay. If housing/healthcare/education is too expensive, figure ou…

1. Rich people historically take wealth out of a country via offshore tax heavens. If money is spent on giga-companies instead of local businesses, it drains wealth from communities and creates inequality. 2. Taxation is not robbery at all. Rich people have used all public services at one point or another, it‘s only fair to pay back. They don‘t most of the time, so these services wither. 3. The „free“ market has show…

1. Wouldn't that dodge the wealth tax too?

2. They use the public services, but so does everyone else. Should a gallon of water cost me $1 but the wealthy $10? That seems fair/right to you?

3. What's walmart? Regardless, don't punish them (Amazon) for being successful, punish the anti-competitive behaviors.

4. This is true, and unfortunate. Though a wealth tax doesn't solve this.

Minorities have rights. In regards to this topic, the wealthy are the minority.

I'd argue our education system should be teaching people how to build businesses, not just be an employee at them. Most wealth is built by owning a business (no source here, just personal observation). It can then be passed down generation to generation if it's big enough. But let's focus on making it easier for people to obtain wealth instead of trying to take wealth from those who've earned it.

It's funny, Rob Bonta keeps saying that they're "asking" the wealthy to help and that it's the right thing to do. I couldn't agree more, asking is the right thing to do. If you're in a position to give, then giving is the right thing to do. Taking prevents asking and giving from occurring.

Re: Modeling a Wealth Tax

#967

Post by tfehring »

camhart wrote: post #940

How does a rich person being rich harm my chances of becoming rich myself? Until someone can answer this, I'll continue to believe a wealth tax is nothing more than legalized robbery. If it's a company using anti-competitive behaviors, attack that. If it's unfair laws due to lobbyist, fix it. If it's underpaid employees, figure out how to increase their pay. If housing/healthcare/education is too expensive, figure ou…

"Probability of becoming rich" is a weird thing to optimize for. If a rich person being rich costs you a fixed and relatively small amount - say $1,000 - every year, that wouldn't materially affect your chances of becoming rich, but it would still be reasonable to be unhappy about it.

Lots of government spending creates value in proportion to wealth. The military is a good example of this - if the US had no military, Americans would likely buy insurance against acts of war, and the premium for that insurance would be proportional to wealth (or, more precisely, to the value of real assets owned directly plus real assets supporting the value of directly owned financial assets). So the financial value that the military creates is allocated roughly in proportion to wealth - but it's mostly paid for by taxes on income, so the net effect is to create a transfer from labor to capital.

Re: Modeling a Wealth Tax

#968

Post by throwaway7281 »

smilekzs wrote: post #662
throwaway7281 wrote: post #112

Oh my, more state money would mean probably a more equal society - more money for roads, schools, teachers, research labs, health care, infrastructure and much more. All things by the way any entrepreneur is happy to "take" or accept as given. Forgive me, but watching extremely privileged people's viewpoint, that they are so genius is so much missing the point (of luck, and of course a society that nourishes and carr…

> more state money would mean probably more corrupt goverment officials and more money spent on buying heroine for drugsters and repeat offenders on e.g. SF and Seattle streets.

The more corrupt your environment, the more corrupt you will want to be. From the outside, the US looks like a state, where big money is running the show, will benefit from every crisis, etc. What do you expect, when all the elite cares about is their turf?

I'm not advocating paternalism, but what you have in the US is capitalism without much "control" and does it lead to prosperity for all? Does not look like it.

Re: Modeling a Wealth Tax

#969

Post by tchaffee »

intortus wrote: post #911
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.

The most significant reason why (manufacturing) jobs no longer exist in the US is our exorbitant privilege of being the global reserve currency. It has nothing to do with labor laws or taxes.

Manucturing is still a huge employer in the US.

Re: Modeling a Wealth Tax

#970

Post by gridlockd »

KarlKode wrote: post #697
gridlockd wrote: post #349

Earlier quoted context omitted.

The problem is that a wealth tax of just 1% doesn't actually raise that much money, a proposed wealth tax of 2-3% (Warren) would be the highest in the world. If you have that kind of money, why would you not just take it elsewhere? Think about it, if that capital is actually creating returns to make up for the depreciation, it must be working capital . Removing it from the economy would be damaging. What if the money…

If you inductionally apply the argument that you shouldn't increase taxes because someplace else offers a lower tax burden, no place can raise it's taxes. There are other factors in choosing your country of residence (and nationality) than taxes.

Sure, there are other factors. Taxes are like prices, states and countries are competing on them. If you can make up for high taxes, that's fine, but at some point it becomes a shitty deal, so people won't show up anymore. If you are rich, you can just retire in any country and preserve your wealth for yourself and your children.

A wealth tax of 2-3% would enormous. Combined with an average capital gains tax, the incentive to get the capital out of the US becomes huge. Yet, even 2-3% doesn't bring in that much money relative to deficit spending and stimulus bills, so who is to say it's going to stop there? If you're clueless enough to go with a 2-3% wealth tax, you're clueless enough to go with 5% and more (Warren).

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