Tax avoidance by the obscenely wealthy

[Admiral Yi]

AFAICT Fromagia is in favor of a wealth tax.

[grumbler]

One of the problems I've had with this talk of "the rich will invest their riches and everyone will be better off for it" is that the rich mostly aren't really investing in increasing productivity.  They are investing in giving other rich people money by buying their stocks.   The money in the stock market isn't being paid to companies to invest in better production methods or paying workers or whatever.  Companies do issue stocks, but only a tiny slice of stock market activities has anything to do with corporations.

One way to reduce this over-inflation of rich peoples' wealth is to transfer much of the wages paid to the top executives of a corporation to the workers.  Germany has such a system.  In the US, CEOs of large corporations make 320 times what the average worker makes.  In Germany, the ratio is 165:1.  Why?  Because in Germany, half the board of directors of large corporations are nominated by the workers.  Workers have much more incentive to prevent ludicrous executive compensation than other executives do.  Germany's worker productivity reflects their higher wages.

Ironically, Germany has about the same wealth inequality as the US, because of inherited wealth.  Denmark is worse than both.

[Valmy]

We could make it illegal to found hugely successful companies.

But how would we know when the company is being founded that it will be highly successful and therefore should be outlawed? Seems impractical.

[Admiral Yi]

But how would we know when the company is being founded that it will be highly successful and therefore should be outlawed? Seems impractical.

Not totally serious.

[Syt]

We could make it illegal to found hugely successful companies.

Hugely successful companies are not the issue IMHO. The concentration of market power (and often the associated political leverage) is. E.g. in Germany it has not been uncommon for corporations to threaten that if a law gets enacted they may have to let, say, 10,000 people go. Meanwhile, if due to a political decision 1,000 small companies have to let go 10 people each it goes mostly unnoticed.

[Monoriu]

It is not good tax policy to rely on taxing the super rich.  Government expenditure is mostly recurrent and somewhat fixed.  You want tax revenue to match the expenditure to be as stable as possible.  The fortunes and income of the super rich fluctuate a lot, because there are so few of them and their wealth is tied to the markets which can be very volatile.  You want the tax base to be as broad as possible, and to make that happen you want a lot of people to pay tax, not a few.  Targetting the super rich is just to satisfy some people's desire for revenge and because it is politically convenient. 

[viper37]

We could make it illegal to found hugely successful companies.

or, we could take a stronger stance against anti-competitve measures and abuses of monopoly power.

[DGuller]

It is not good tax policy to rely on taxing the super rich.  Government expenditure is mostly recurrent and somewhat fixed.  You want tax revenue to match the expenditure to be as stable as possible.  The fortunes and income of the super rich fluctuate a lot, because there are so few of them and their wealth is tied to the markets which can be very volatile.  You want the tax base to be as broad as possible, and to make that happen you want a lot of people to pay tax, not a few.  Targetting the super rich is just to satisfy some people's desire for revenge and because it is politically convenient.

Government expenditures and tax revenue do not and in fact should not always match, but rather they should match over a cycle (and maybe not even then).  Deficits during a down cycle and surplus during an up cycle is precisely what you want.

[Monoriu]

It is not good tax policy to rely on taxing the super rich.  Government expenditure is mostly recurrent and somewhat fixed.  You want tax revenue to match the expenditure to be as stable as possible.  The fortunes and income of the super rich fluctuate a lot, because there are so few of them and their wealth is tied to the markets which can be very volatile.  You want the tax base to be as broad as possible, and to make that happen you want a lot of people to pay tax, not a few.  Targetting the super rich is just to satisfy some people's desire for revenge and because it is politically convenient.

Government expenditures and tax revenue do not and in fact should not always match, but rather they should match over a cycle (and maybe not even then).  Deficits during a down cycle and surplus during an up cycle is precisely what you want.

The problem with taxing the super rich is that the tax revenue is not only volatile, but unreliable as well.  They can go bankrupt, lose their business, whatever. 

[Admiral Yi]

or, we could take a stronger stance against anti-competitve measures and abuses of monopoly power.

That wouldn't touch Elon Musk or Warren Buffet.

And we'd have to invent a new theory of competition to account for companies like Google and its network effects.  Classic monopolies like Standard Oil charged above market prices once they had consolidated competitors.  Google gives its stuff away for free.

[Berkut]

or, we could take a stronger stance against anti-competitve measures and abuses of monopoly power.

That wouldn't touch Elon Musk or Warren Buffet.

And we'd have to invent a new theory of competition to account for companies like Google and its network effects.  Classic monopolies like Standard Oil charged above market prices once they had consolidated competitors.  Google gives its stuff away for free.

Google does not give any of its products away for free.

[Admiral Yi]

That's a fun semantic argument.

[Grey Fox]

or, we could take a stronger stance against anti-competitve measures and abuses of monopoly power.

That wouldn't touch Elon Musk or Warren Buffet.

And we'd have to invent a new theory of competition to account for companies like Google and its network effects.  Classic monopolies like Standard Oil charged above market prices once they had consolidated competitors.  Google gives its stuff away for free.

To consumers. Not it's customers.

[Berkut]

That's a fun semantic argument.

Not at all.

My point here is that google doesn't give me free stuff, because I am not googles customer. I am their product.

Or rather, my attention is their product. They charge their customers plenty for their product. They just pay me for my attention with brightly colored doodads.

[Admiral Yi]

To consumers. Not it's customers.

Fair enough.  And is there any evidence Google is pricing its ad time in an anti-competitive manner?