Tax avoidance by the obscenely wealthy

[crazy canuck]

We are talking about concentration of wealth here.  How is that generally better than consumption?

Because more people benefit from investment. My 401k makes money from rich people investing. Only the yacht makers make money from crazy yacht purchases.

I say again, we are talking about concentration of wealth, not your 401k.

[crazy canuck]

My problem with hating on the super rich is is that it seems people imagine that all the crazy billions of Musk or Bezos are money they have taken from other people. But isn't most of that so called wealth is current valuation of the things, moanly shares, they own? So, theoretical and imaginery to a considerable extent?

We are talking about the concentration of wealth and all the ill effects that has on society and the economy.  I do not know anyone who "hates' the super rich because they take money from other people.  Rather they hate a system that allows such extreme inequality.

[Valmy]

We are talking about concentration of wealth here.  How is that generally better than consumption?

Because more people benefit from investment. My 401k makes money from rich people investing. Only the yacht makers make money from crazy yacht purchases.

I say again, we are talking about concentration of wealth, not your 401k.

So you put in a tax that creates incentives to spend money and/or smuggle it out of the country. Would society benefit more than if we had a consumption tax instead?

I don't recall you ever saying we were excluding investments here, or that that was something I had to consider. Do these rich people just stick their money in vaults underground? What happens if they are not spending it? It is being invested someplace I presume.

[Valmy]

We are talking about the concentration of wealth and all the ill effects that has on society and the economy.

Ok I thought we were talking about efficient ways of taxation and creating incentives for economic benefit. We are running a big budget deficit and we want to do things like universal health care so it makes sense to look for ways to correct the first issue and fund the second.

If the goal is simply to remove the money from those who are hoarding it then we probably need to look on the other side, how the wealth accumulates like that in the first place, rather than just how to take it back after the fact. Because, like I said, they can just smuggle it to whatever country will let them keep it like Corporations currently do with their profits.

Or not. I am not exactly an expert or seer on how things do or could work.

[alfred russel]

It seems a lot of the problems could be avoided without a wealth tax if you have a significant estate tax (which would include the unrealized gains on assets transferred). And also more teeth in anti trust enforcement/possibly strengthening of laws.

An estate tax is just a wealth tax that is levied only occasionally but at a higher rate.

Which has significant advantages. It can still raise revenue for the government, can prevent excessive multi generational concentrations as wealth, but doesn't force builders of companies to periodically sell closely held assets a few percent at a time.

[grumbler]

I wonder how much of the unrealized wealth of these guys is actually realizable.  If Jeff Bezos tried to sell his 8% or so of Amazon shares, what would that do to the price of the shares?

[The Brain]

The problems with having super-wealthy people the way we do today seem pretty vague to me. I certainly hope that the richest people 1,000 years from now will be orders of magnitude wealthier.

[crazy canuck]

We are talking about concentration of wealth here.  How is that generally better than consumption?

Because more people benefit from investment. My 401k makes money from rich people investing. Only the yacht makers make money from crazy yacht purchases.

I say again, we are talking about concentration of wealth, not your 401k.

So you put in a tax that creates incentives to spend money and/or smuggle it out of the country. Would society benefit more than if we had a consumption tax instead?

I don't recall you ever saying we were excluding investments here, or that that was something I had to consider. Do these rich people just stick their money in vaults underground? What happens if they are not spending it? It is being invested someplace I presume.

Why do you presume the few people in the world who have extreme wealth are investing it?  Gates isn't, he set up a foundation with his wealth.  Buffet isn't, he have it over to the Gates foundation.   Why do you think that one Billionaire makes better decisions as to how to use that money?  Why should society benefit or not based on the peculiarities of that one completely unaccountable decision maker?

[Tamas]

The problems with having super-wealthy people the way we do today seem pretty vague to me. I certainly hope that the richest people 1,000 years from now will be orders of magnitude wealthier.

Yeah for me the problems of wealth concentration is the shrinking of the middle class and subsequent wealth increase of the upper class, not the anomaly of a few super rich persons.

[DGuller]

I remember reading an "investigative" article on bias in statistical models in ProPublica.  They were looking at a model that predicted recidivism of released prisoners, and made an argument that it was biased against black prisoners. 

As I was reading it, the metric that they used to evaluate fairness struck me as very unconventional.  My alarm immediately went off, since the use of unconventional metrics for very conventional questions means one of two things:  the people using them have no idea WTF they're doing, or they're throwing every metric at the data until they find one that gives them desired conclusions.  I played around with the metric they used with simulated data, and discovered that this metric would always indicate that the model is biased against black people, even a perfectly calibrated model.

I Googled for discussions of this study, and it turns out that I wasn't the first one to discover this very thing.  Some statisticians even wrote lengthy articles pointing out this very problem.  Instead of admitting their mistake, ProPublica claimed that this is a breakthrough result:  the articles by statisticians debunking the study have actually mathematically proved that recidivism models are inevitably biased, and thus should not exist. 

After this article, and one other similarly dishonest investigative article about model bias, I can't take anything written in ProPublica at face value.  It's a shame, because the problems that they tackle so ineptly are real problems deserving of honest investigation, but I just can't trust a word of what they write.  I assume that whatever numbers they will give me will be highly misleading.

[viper37]

We are talking about concentration of wealth here.  How is that generally better than consumption?

Because more people benefit from investment. My 401k makes money from rich people investing. Only the yacht makers make money from crazy yacht purchases.

I say again, we are talking about concentration of wealth, not your 401k.

So you put in a tax that creates incentives to spend money and/or smuggle it out of the country. Would society benefit more than if we had a consumption tax instead?

I don't recall you ever saying we were excluding investments here, or that that was something I had to consider. Do these rich people just stick their money in vaults underground? What happens if they are not spending it? It is being invested someplace I presume.

Why do you presume the few people in the world who have extreme wealth are investing it?  Gates isn't, he set up a foundation with his wealth.  Buffet isn't, he have it over to the Gates foundation.   Why do you think that one Billionaire makes better decisions as to how to use that money?  Why should society benefit or not based on the peculiarities of that one completely unaccountable decision maker?

Justin Trudeau and Donald Trump have proven how wisely the State's money can be spent.  We should always trust the government to spend the money.

Aside that, I dislike the kind of talks that demonize one group or another just because they happen to have had success.

The US fiscality is pretty generous by most developped countries' standards and it makes it easier to accumulate wealth when you begin.  At some point, unless you arbitraly nationalize a company and a billionaire's fortune once it's so big to be "inconceivable", than what's stopping you from going after everyone else?  Where's the mark?  100 billions$ and above in asset, we tax you at 90%?  I'm sure there'll a lot of 97-98 billionaires out there. 

But why stop there?  Why not got after multi-millionaire which stands a much greater chance of either becoming billionaire themselves or seeing their kids/grandkids become ones?  How much money does a baseball player need to earn to take care of his family?  Would he be in huge trouble if we confiscated 90% of his assets?  Would he struggle to survive in the difficult housing market of US cities?

The same argument can be applied to nearly all level of wealth above the average.

I don't mind a tax on inheritance.  But a tax on unrealized capital gains seems tricky.  You'll need to put an arbitrary limit, and I dislike this as a principle as it often leads to abuse.

[Berkut]

I have no problem with the idea of taxing wealth in general, if you can come up with a way of doing it.

I just cannot think of a good way. But I am sure there are people smarter than me out there who can maybe manage that.

I would MUCH prefer coming up with a system that makes that accumulation of wealth not happen to begin with - something that aligns the incentives better to see that wealth not amass to begin with. Again, I am not smart enough to really come up with a good way to do that, but it would be great if someone smarter came up with something, and we figured out how to make it politically palatable.

[Admiral Yi]

We could make it illegal to found hugely successful companies.

[jimmy olsen]

With our society seemingly moving toward a wealth/asset-based neo-feudalistic setup, the fair thing would be to tax wealth (assets) primarily. But I don't expect it to happen.

I am highly skeptical of the feasibility of this. Also it seems to punish people who invest and not those who just blow their money on hookers and yachts. It seems like we should incentivize the former not the later.

Or maybe not. Maybe the yacht and hooker industries could use the shot in the arm.

Spending money on hookers and yachts injects money into the economy. Most of those investments don't actually result in business activity.

[fromtia]

Even the insinuation that Musk pay tax of any kind is an attempt to uninvent America. Prepare to be lectured by Grimes via TikTok, for you have not worshipped the Pharoah in the proper manner. If this continues, Joe Rogan, Eric Weinstein, Ben Shapiro and Jordan Peterson will join Musk and assemble themselves, Voltron-like, into a giant gas station hot dog that will simply land on both the Federal government and the lamestream media, utterly flattening them forever.