Dossier on ProPublica.
To nobody's great surprise, the obscenely wealthy avoid as much tax as they can; in some cases, paying no income tax for a few years.
ProPublica has gained access to IRS files to assess effective tax rates for high profile multi billionaires.
Warren Buffet: 0.10%
Bezos: 0,98%
Bloomberg: 1.30%
Musk: 3.27%
Bezos claimed a 4,000$ tax credit for his kids, intended for people with low revenues.
https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax
I do not disagree that the wealthy need to pay more tax and bear the highest burden of all taxpayers, but ProPublica seeming to not understand why billionaires aren't paying taxes on unrealized gains is...weird. I am still reading. I am hopeful that they are not promoting some sort of tax on unrealized wealth growth.
That income tax doesn't tax non-income wealth growth is not news. It isn't even supposed to.
No. They use it to illustrate why personal tax rates are an insufficient tool to tax fairly. They explain how unrealized wealth is used to leverage a ton of borrowing at favorable rates, which in turn is used to squeeze more favorable terms of taxation.
In the end, the level of wealth of these people is just so high as to be incomprehensible. Whether the wealth is unrealized or not, it affords people to live in conditions of material luxury which citizens use to assess comfort and, to some degree, fairness.
Maybe rich people should pay a consumption tax of some kind. I don't know.
I don't really like the idea of a wealth tax as it seems difficult to manage and easy to game, just from a practical standpoint.
Quote from: Habbaku on June 08, 2021, 12:36:57 PM
I am hopeful that they are not promoting some sort of tax on unrealized wealth growth.
That's what Elizabeth Warren wants to do.
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.
Quote from: Tamas on June 08, 2021, 02:40:02 PM
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.
Quote from: Valmy on June 08, 2021, 02:42:39 PM
Quote from: Tamas on June 08, 2021, 02:40:02 PM
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.
Hey, giving more money to sex workers is a good thing. At least they will then spend it and put it back into the economy instead of hoarding it.
Isn't property taxes often a tax on unrealised gains?
Quote from: Threviel on June 08, 2021, 03:15:27 PM
Isn't property taxes often a tax on unrealised gains?
It depends on how often property assessments are updated.
In the US the federal government does not tax property - that is done at the state level.
Oex article is about federal level taxation.
Quote from: Habbaku on June 08, 2021, 12:36:57 PM
I do not disagree that the wealthy need to pay more tax and bear the highest burden of all taxpayers, but ProPublica seeming to not understand why billionaires aren't paying taxes on unrealized gains is...weird. I am still reading. I am hopeful that they are not promoting some sort of tax on unrealized wealth growth.
I read it as surprised as in shocked in find gambling at Rick's place.
And yes their clear implication to have a wealth/net worth tax.
Quote from: Valmy on June 08, 2021, 02:42:39 PM
Quote from: Tamas on June 08, 2021, 02:40:02 PM
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.
Why would you want to create an incentive for wealth to be concentrated rather than spent?
Quote from: crazy canuck on June 08, 2021, 03:28:17 PM
Quote from: Valmy on June 08, 2021, 02:42:39 PM
Quote from: Tamas on June 08, 2021, 02:40:02 PM
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.
Why would you want to create an incentive for wealth to be concentrated rather than spent?
Because investing is generally better than wild consumption. Or at least I think that is true. It might not be true and maybe we do want to incentivize blowing your wealth.
I've said before I would have no problem with a wealth tax if it started at a low enough level of wealth.
What I do object to is agitprop from advocates of a wealth tax. For example characterizing the fact that unrealized capital gains are currently untaxed as "tax avoidance." I have unrealiized capital gains. I am not a tax avoider. Fuck you Pro Publica.
Quote from: Valmy on June 08, 2021, 03:31:03 PM
Quote from: crazy canuck on June 08, 2021, 03:28:17 PM
Quote from: Valmy on June 08, 2021, 02:42:39 PM
Quote from: Tamas on June 08, 2021, 02:40:02 PM
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.
Why would you want to create an incentive for wealth to be concentrated rather than spent?
Because investing is generally better than wild consumption. Or at least I think that is true. It might not be true and maybe we do want to incentivize blowing your wealth.
We are talking about concentration of wealth here. How is that generally better than consumption?
Quote from: crazy canuck on June 08, 2021, 03:35:42 PM
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.
That's one of the problems with these absurd amounts of wealth. They are so utterly unimaginable that people almost reflexively bring the discussion back to their own circumstances - with their small investments, their house, their boats, their kids - because these *are* indeed, imaginable. Hence, a handful of obscenely wealthy people, with inordinate political power, find themselves with millions of free advocates.
If, tomorrow, the state decided arbitrarily to confiscate 90% of Bezos' wealth, he would be left with a paltry 30 billion dollars. It is still light years beyond what an ordinary person's wildest dreams of luxurious expenses can fathom.
Buffet has had a bad year on the market?
Quote from: Oexmelin on June 08, 2021, 03:42:47 PM
That's one of the problems with these absurd amounts of wealth. They are so utterly unimaginable that people almost reflexively bring the discussion back to their own circumstances - with their small investments, their house, their boats, their kids - because these *are* indeed, imaginable. Hence, a handful of obscenely wealthy people, with inordinate political power, find themselves with millions of free advocates.
If, tomorrow, the state decided arbitrarily to confiscate 90% of Bezos' wealth, he would be left with a paltry 30 billion dollars. It is still light years beyond what an ordinary person's wildest dreams of luxurious expenses can fathom.
Why is this a problem?
Quote from: Oexmelin on June 08, 2021, 11:50:47 AM
Dossier on ProPublica.
To nobody's great surprise, the obscenely wealthy avoid as much tax as they can; in some cases, paying no income tax for a few years.
ProPublica has gained access to IRS files to assess effective tax rates for high profile multi billionaires.
Warren Buffet: 0.10%
Bezos: 0,98%
Bloomberg: 1.30%
Musk: 3.27%
Bezos claimed a 4,000$ tax credit for his kids, intended for people with low revenues.
https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax
As someone who feels completely ripped off every time I check out of Whole Foods and forgot I had Amazon Prime and paid a bunch in membership dues by accident, I support strong actions against Jeff Bezos. I'll man the barricades.
Quote from: Admiral Yi on June 08, 2021, 04:13:56 PM
Why is this a problem?
Because:
1) It removes these people from the social contract.
2) It removes considerable resources from states' budgets, states from which these individuals have benefitted.
3) It grants them political power way beyond what is acceptable.
4) It allows these people to determine collective policy based on their own individual whims
5) It contributes to gigantic inequalities within a single polity, to say nothing across boundaries.
6) Therefore, it erodes trust in democracy, and equality.
Considering how fast trust in democratic institutions is eroding, I think it's a problem we ought to take quite seriously.
Quote from: Oexmelin on June 08, 2021, 04:21:34 PM
Because:
1) It removes these people from the social contract.
2) It removes considerable resources from states' budgets, states from which these individuals have benefitted.
3) It grants them political power way beyond what is acceptable.
4) It allows these people to determine collective policy based on their own individual whims
5) It contributes to gigantic inequalities within a single polity, to say nothing across boundaries.
6) Therefore, it erodes trust in democracy, and equality.
Considering how fast trust in democratic institutions is eroding, I think it's a problem we ought to take quite seriously.
Yes, these are arguments in favor of a wealth tax, and I dislike them or like them in varying degrees.
And there are arguments opposed to a wealth tax. Is there anything about the arguments in opposition, or the characters or thought processes of those opposed, which makes them a "problem?" As opposed to just an opposing view that you personally disagree with?
The gubbermint will invest the money better than Buffett?
Quote from: Admiral Yi on June 08, 2021, 04:32:49 PM
And there are arguments opposed to a wealth tax. Is there anything about the arguments in opposition, or the characters or thought processes of those opposed, which makes them a "problem?" As opposed to just an opposing view that you personally disagree with?
I am not sure what you mean here. i.e,. do I think that those who oppose wealth taxes have legitimate arguments?
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.
Quote from: Oexmelin on June 08, 2021, 05:00:44 PM
I am not sure what you mean here. i.e,. do I think that those who oppose wealth taxes have legitimate arguments?
I'm asking you what you mean by problem.
Quote from: The Brain on June 08, 2021, 04:36:41 PM
The gubbermint will invest the money better than Buffett?
Buffet gives his money to Bill Gates' Foundation which then spends a lot of it on overseas health initiatives.
So basically if you support spending dollars overseas in foreign aid, don't tax WB's wealth. If you are Trumpy America Firster then support big fat wealth taxes. (dont worry trump himself will evade it either way).
Quote from: alfred russel on June 08, 2021, 05:06:11 PM
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.
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?
Quote from: Valmy on June 08, 2021, 03:41:44 PM
Quote from: crazy canuck on June 08, 2021, 03:35:42 PM
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.
Quote from: Tamas on June 08, 2021, 05:30:34 PM
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.
Quote from: crazy canuck on June 08, 2021, 05:32:33 PM
Quote from: Valmy on June 08, 2021, 03:41:44 PM
Quote from: crazy canuck on June 08, 2021, 03:35:42 PM
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.
Quote from: crazy canuck on June 08, 2021, 05:34:55 PM
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.
Quote from: The Minsky Moment on June 08, 2021, 05:25:47 PM
Quote from: alfred russel on June 08, 2021, 05:06:11 PM
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.
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 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.
Quote from: Valmy on June 08, 2021, 06:01:06 PM
Quote from: crazy canuck on June 08, 2021, 05:32:33 PM
Quote from: Valmy on June 08, 2021, 03:41:44 PM
Quote from: crazy canuck on June 08, 2021, 03:35:42 PM
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?
Quote from: The Brain on June 08, 2021, 06:24:06 PM
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.
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. :lol:
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.
Quote from: crazy canuck on June 08, 2021, 06:44:42 PM
Quote from: Valmy on June 08, 2021, 06:01:06 PM
Quote from: crazy canuck on June 08, 2021, 05:32:33 PM
Quote from: Valmy on June 08, 2021, 03:41:44 PM
Quote from: crazy canuck on June 08, 2021, 03:35:42 PM
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.
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.
We could make it illegal to found hugely successful companies.
Quote from: Valmy on June 08, 2021, 02:42:39 PM
Quote from: Tamas on June 08, 2021, 02:40:02 PM
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.
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.
AFAICT Fromagia is in favor of a wealth tax.
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.
Quote from: Admiral Yi on June 08, 2021, 08:00:13 PM
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.
Quote from: Valmy on June 08, 2021, 09:07:03 PM
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.
Quote from: Admiral Yi on June 08, 2021, 08:00:13 PM
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.
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.
Quote from: Admiral Yi on June 08, 2021, 08:00:13 PM
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.
Quote from: Monoriu on June 09, 2021, 07:32:58 PM
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.
Quote from: DGuller on June 09, 2021, 07:44:06 PM
Quote from: Monoriu on June 09, 2021, 07:32:58 PM
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.
Quote from: viper37 on June 09, 2021, 07:38:16 PM
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.
Quote from: Admiral Yi on June 09, 2021, 08:26:03 PM
Quote from: viper37 on June 09, 2021, 07:38:16 PM
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.
That's a fun semantic argument.
Quote from: Admiral Yi on June 09, 2021, 08:26:03 PM
Quote from: viper37 on June 09, 2021, 07:38:16 PM
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.
Quote from: Admiral Yi on June 09, 2021, 09:09:14 PM
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.
Quote from: Grey Fox on June 09, 2021, 09:24:55 PM
To consumers. Not it's customers.
Fair enough. And is there any evidence Google is pricing its ad time in an anti-competitive manner?
I don't get the hate about people being really, really rich. It is not like the super rich are actively and intentionally harming me. There are still plenty of opportunities around for people to work their way up. Maybe not as many opportunities as we would like, but still very much possible for those who are sufficiently determined and able. Perhaps the super rich are really smart, really lucky, really hardworking, or all of the above. I have used Amazon and Microsoft products and services and they do benefit humanity. I mean, unless there is good evidence showing they got their money through illegal means, I don't see any point thinking about other people's money. Instead of devising ways to rob them, it is much more productive to consider ways to make money ourselves.
The way to get at it is with a progressive inheritance tax. If the inheritance is above a certain threshold, say 1M$ or something the tax kicks in and it might increase exponentially when there's more money. So you can make sure that your kids will be well off and if they take care they will leave resources for the next generation. But in time this culls out all old money families that don't keep up and levels the playing field somewhat.
This also makes it so that you can have a tax on unrealized wealth increases.
Quote from: grumbler on June 08, 2021, 06:17:41 PM
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?
Indeed...to take an Elon Musk example...if the price/value of Tesla stock is the benchmark for his "wealth", but Tesla stock is thought to be significantly overvalued, and mostly based on expected future earnings...then could it be said that much of Musk's current wealth is something like a loan given to him by the collective of stockholders/investors?
Quote from: The Minsky Moment on June 08, 2021, 05:25:47 PM
Quote from: alfred russel on June 08, 2021, 05:06:11 PM
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.
How about a universal 100% estate tax? :P
Quote from: Monoriu on June 10, 2021, 04:21:33 AM
I don't get the hate about people being really, really rich. It is not like the super rich are actively and intentionally harming me.
They are not actively doing it, but it is measurable how huge gaps between the rich and the poor has a detriment to society.
The problem is rarely the players, it is the game.
Quote from: Berkut on June 09, 2021, 10:05:26 PM
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.
They are nice doodads. Though they did not invent youtube or even make it a success, they just bought it and use it. I always find that slightly annoying, so many of our most successful companies did not actually develop or even really innovate on their products. So what are they actually doing for society besides just owning stuff?
Quote from: DGuller on June 09, 2021, 07:44:06 PM
Quote from: Monoriu on June 09, 2021, 07:32:58 PM
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.
but that is not what happens of course. Deficits during the down cycle because 'investments' and deficits during the up cycle cause "now's the time to expand expenditures"
Quote from: Crazy_Ivan80 on June 10, 2021, 01:18:25 PM
but that is not what happens of course. Deficits during the down cycle because 'investments' and deficits during the up cycle cause "now's the time to expand expenditures"
Or "now's the time to cut taxes" if you are the Republican Party taking power during the up cycle. Never a bad time to run up massive deficits.
Quote from: Valmy on June 10, 2021, 01:08:48 PM
Quote from: Monoriu on June 10, 2021, 04:21:33 AM
I don't get the hate about people being really, really rich. It is not like the super rich are actively and intentionally harming me.
They are not actively doing it, but it is measurable how huge gaps between the rich and the poor has a detriment to society.
The problem is rarely the players, it is the game.
WHY DO LEFTISTS LIKE YOU WANT TO CANCEL CAPITALISM??????? DO YOU NOT SEE POOR PEOPLE CAN FEED THEMSELVES NOW!!!!11111!!
Quote from: Zoupa on June 10, 2021, 02:12:28 PM
Quote from: Valmy on June 10, 2021, 01:08:48 PM
Quote from: Monoriu on June 10, 2021, 04:21:33 AM
I don't get the hate about people being really, really rich. It is not like the super rich are actively and intentionally harming me.
They are not actively doing it, but it is measurable how huge gaps between the rich and the poor has a detriment to society.
The problem is rarely the players, it is the game.
WHY DO LEFTISTS LIKE YOU WANT TO CANCEL CAPITALISM??????? DO YOU NOT SEE POOR PEOPLE CAN FEED THEMSELVES NOW!!!!11111!!
That doesn't even begin to make sense.
Poor people can feed themselves now - the #1 health problem of the poor in the USA is obesity.
Why is it so upsetting to you that that is true?
Aren't you like....happy that poor people are not starving to death anymore? Why are you so angry about facts?
:lol:
3/10, put your back into it!
Quote from: Tonitrus on June 10, 2021, 12:59:16 PM
Quote from: The Minsky Moment on June 08, 2021, 05:25:47 PM
Quote from: alfred russel on June 08, 2021, 05:06:11 PM
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.
How about a universal 100% estate tax? :P
If one adheres to classic liberal ideology, that would actually be ideal.
Quote from: Berkut on June 10, 2021, 02:21:16 PM
Quote from: Zoupa on June 10, 2021, 02:12:28 PM
Quote from: Valmy on June 10, 2021, 01:08:48 PM
Quote from: Monoriu on June 10, 2021, 04:21:33 AM
I don't get the hate about people being really, really rich. It is not like the super rich are actively and intentionally harming me.
They are not actively doing it, but it is measurable how huge gaps between the rich and the poor has a detriment to society.
The problem is rarely the players, it is the game.
WHY DO LEFTISTS LIKE YOU WANT TO CANCEL CAPITALISM??????? DO YOU NOT SEE POOR PEOPLE CAN FEED THEMSELVES NOW!!!!11111!!
That doesn't even begin to make sense.
(https://i.imgur.com/fAqd0sd.gif)
Quote from: Berkut on June 10, 2021, 02:21:16 PM
Quote from: Zoupa on June 10, 2021, 02:12:28 PM
Quote from: Valmy on June 10, 2021, 01:08:48 PM
Quote from: Monoriu on June 10, 2021, 04:21:33 AM
I don't get the hate about people being really, really rich. It is not like the super rich are actively and intentionally harming me.
They are not actively doing it, but it is measurable how huge gaps between the rich and the poor has a detriment to society.
The problem is rarely the players, it is the game.
WHY DO LEFTISTS LIKE YOU WANT TO CANCEL CAPITALISM??????? DO YOU NOT SEE POOR PEOPLE CAN FEED THEMSELVES NOW!!!!11111!!
That doesn't even begin to make sense.
Poor people can feed themselves now - the #1 health problem of the poor in the USA is obesity.
Why is it so upsetting to you that that is true?
Aren't you like....happy that poor people are not starving to death anymore? Why are you so angry about facts?
Obesity is caused by eating too much healthy food. I don't think so. Obesity is caused by eating cheap foods which are very unhealthy.
Quote from: crazy canuck on June 10, 2021, 02:55:22 PM
Quote from: Tonitrus on June 10, 2021, 12:59:16 PM
Quote from: The Minsky Moment on June 08, 2021, 05:25:47 PM
Quote from: alfred russel on June 08, 2021, 05:06:11 PM
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.
How about a universal 100% estate tax? :P
If one adheres to classic liberal ideology, that would actually be ideal.
I've always thought there were good arguments in favour of it. The notion being that wealth 'ought' to be earned by the person earning it, not merely accumulated. Though the children of the wealthy would get a major boost nonetheless, having grown up with the benefits of having wealthy parents ... after all, given average lifespans, they would be teaching retirement age themselves by the time such a tax would affect their parents.
The main strike against it is the difficulty in preventing the wealthy from getting around it in various ways.
Also I am not sure it is even something we should strive for. Corporations and other entities can accumulate wealth and assets over decades but people cannot? Seems like such a system is designed to empower institutions and hamstring individuals. Also most estates are not cash but things like a house. So we take some family's home once grandpa dies? Seems pretty draconian.
But I understand the sense of fairness and incentives it wants to create.
Quote from: Malthus on June 10, 2021, 03:11:46 PM
Quote from: crazy canuck on June 10, 2021, 02:55:22 PM
Quote from: Tonitrus on June 10, 2021, 12:59:16 PM
Quote from: The Minsky Moment on June 08, 2021, 05:25:47 PM
Quote from: alfred russel on June 08, 2021, 05:06:11 PM
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.
How about a universal 100% estate tax? :P
If one adheres to classic liberal ideology, that would actually be ideal.
I've always thought there were good arguments in favour of it. The notion being that wealth 'ought' to be earned by the person earning it, not merely accumulated. Though the children of the wealthy would get a major boost nonetheless, having grown up with the benefits of having wealthy parents ... after all, given average lifespans, they would be teaching retirement age themselves by the time such a tax would affect their parents.
The main strike against it is the difficulty in preventing the wealthy from getting around it in various ways.
Indeed. If anything, the spike in gift tax claims would be of space elevator proportions.
Quote from: Zoupa on June 10, 2021, 02:56:13 PM
Quote from: Berkut on June 10, 2021, 02:21:16 PM
Quote from: Zoupa on June 10, 2021, 02:12:28 PM
WHY DO LEFTISTS LIKE YOU WANT TO CANCEL CAPITALISM??????? DO YOU NOT SEE POOR PEOPLE CAN FEED THEMSELVES NOW!!!!11111!!
That doesn't even begin to make sense.
(https://i.imgur.com/fAqd0sd.gif)
1/10, You can't crow over someone pointing out how moronic your trolling is! :lol:
The main strike against it is it interferes with a person's right to dispose of their accumulated wealth as they so please.
Quote from: Malthus on June 10, 2021, 03:11:46 PM
Quote from: crazy canuck on June 10, 2021, 02:55:22 PM
Quote from: Tonitrus on June 10, 2021, 12:59:16 PM
Quote from: The Minsky Moment on June 08, 2021, 05:25:47 PM
Quote from: alfred russel on June 08, 2021, 05:06:11 PM
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.
How about a universal 100% estate tax? :P
If one adheres to classic liberal ideology, that would actually be ideal.
I've always thought there were good arguments in favour of it. The notion being that wealth 'ought' to be earned by the person earning it, not merely accumulated. Though the children of the wealthy would get a major boost nonetheless, having grown up with the benefits of having wealthy parents ... after all, given average lifespans, they would be teaching retirement age themselves by the time such a tax would affect their parents.
The main strike against it is the difficulty in preventing the wealthy from getting around it in various ways.
The main strike against it is that it is a horrible, destructive idea.
Quote from: Admiral Yi on June 10, 2021, 03:16:49 PM
The main strike against it is it interferes with a person's right to dispose of their accumulated wealth as they so please.
It doesn't dispose of those rights at all...you have them for the rest of your life.
Quote from: Malthus on June 10, 2021, 03:11:46 PM
I've always thought there were good arguments in favour of it. The notion being that wealth 'ought' to be earned by the person earning it, not merely accumulated. Though the children of the wealthy would get a major boost nonetheless, having grown up with the benefits of having wealthy parents ... after all, given average lifespans, they would be teaching retirement age themselves by the time such a tax would affect their parents.
The main strike against it is the difficulty in preventing the wealthy from getting around it in various ways.
The ways of getting around it can be closed. Tax tangible gifts over some small threshold as income, for instance. You could buy your child a car, but not a house.
Quote from: Admiral Yi on June 10, 2021, 03:16:49 PM
The main strike against it is it interferes with a person's right to dispose of their accumulated wealth as they so please.
Since that isn't a right, your objection isn't very persuasive.
What will the government do with all those houses and boats and assets it takes though?
Quote from: The Brain on June 10, 2021, 03:17:11 PM
The main strike against it is that it is a horrible, destructive idea.
There are so many strikes against this idea that the probability of any strike against it being the main one is exceedingly small.
Quote from: The Brain on June 10, 2021, 03:17:11 PM
The main strike against it is that it is a horrible, destructive idea.
That may be so, but every alternative is even more horrible and destructive, so we need to choose the policy that limits the horror and destruction.
Quote from: The Brain on June 10, 2021, 03:17:11 PM
The main strike against it is that it is a horrible, destructive idea.
Yeah. That is the main thing.
I guess if Disney Corporation loses everything to the state everytime the CEO changes it might be fair. Institutions? Keep your shit forever! Families? Give us all your shit peasants.
Quote from: grumbler on June 10, 2021, 03:21:06 PM
Quote from: The Brain on June 10, 2021, 03:17:11 PM
The main strike against it is that it is a horrible, destructive idea.
That may be so, but every alternative is even more horrible and destructive, so we need to choose the policy that limits the horror and destruction.
If you say so.
Quote from: grumbler on June 10, 2021, 03:21:06 PM
Quote from: The Brain on June 10, 2021, 03:17:11 PM
The main strike against it is that it is a horrible, destructive idea.
That may be so, but every alternative is even more horrible and destructive, so we need to choose the policy that limits the horror and destruction.
We'll have to agree to disagree.
Quote from: Valmy on June 10, 2021, 03:19:59 PM
What will the government do with all those houses and boats and assets it takes though?
What it does with assets acquired through an estate tax now. It isn't like an estate tax is some new concept.
Quote from: Admiral Yi on June 10, 2021, 03:16:49 PM
The main strike against it is it interferes with a person's right to dispose of their accumulated wealth as they so please.
Since such a right does not exist and has never existed, a better justification is required.
Quote from: Valmy on June 10, 2021, 03:21:26 PM
Quote from: The Brain on June 10, 2021, 03:17:11 PM
The main strike against it is that it is a horrible, destructive idea.
Yeah. That is the main thing.
I guess if Disney Corporation loses everything to the state everytime the CEO changes it might be fair. Institutions? Keep your shit forever! Families? Give us all your shit peasants.
And that would be the main dodge...individuals hiding assets inside corporations/institutions.
Quote from: Valmy on June 10, 2021, 03:14:01 PM
Also I am not sure it is even something we should strive for. Corporations and other entities can accumulate wealth and assets over decades but people cannot? Seems like such a system is designed to empower institutions and hamstring individuals. Also most estates are not cash but things like a house. So we take some family's home once grandpa dies? Seems pretty draconian.
But I understand the sense of fairness and incentives it wants to create.
Well, institutions accumulating power can be dealt with in other ways - such as expanded anti-trust legislation. Ideally, some balance would be struck to avoid everyone being owned by either Microsoft or Bill Gates personally ...
The issue is one of which values you want to preserve. A society in which wealth and power is more or less permanently stratified and in which social mobility is very difficult - that is the direction the West is heading (and the US more than most). Or a society in which there is greater equality of opportunity, but less control over one's family legacy.
How about we just get most wealthy people paying a significant estate tax, rather then trying for something that is totally impossible to get passed right now?
Quote from: Berkut on June 10, 2021, 03:26:16 PM
How about we just get most wealthy people paying a significant estate tax, rather then trying for something that is totally impossible to get passed right now?
I think we already had that at one point and it was fine.
Quote from: grumbler on June 10, 2021, 03:18:48 PM
Quote from: Malthus on June 10, 2021, 03:11:46 PM
I've always thought there were good arguments in favour of it. The notion being that wealth 'ought' to be earned by the person earning it, not merely accumulated. Though the children of the wealthy would get a major boost nonetheless, having grown up with the benefits of having wealthy parents ... after all, given average lifespans, they would be teaching retirement age themselves by the time such a tax would affect their parents.
The main strike against it is the difficulty in preventing the wealthy from getting around it in various ways.
The ways of getting around it can be closed. Tax tangible gifts over some small threshold as income, for instance. You could buy your child a car, but not a house.
But there are so many ways around it. Even with comparatively low estate taxes right now my understanding is if you have to pay them you have an idiot for an estate planner.
You tax gifts over a certain amount - so instead of a gift it's a sale at below-market rates. You guarantee a loan which is used to make investments. You hire someone to a position with lots of compensation but little work. You do the same with spouses or children.
Or you set up a trust or foundation. Having control over a multi-billion dollar charitable foundation is almost as good as being worth multi-billion dollars to begin with.
And that's without me being an expert in any of this.
Quote from: Berkut on June 10, 2021, 03:26:16 PM
How about we just get most wealthy people paying a significant estate tax, rather then trying for something that is totally impossible to get passed right now?
If we are gonna limit the discussion of reforms it to what is actually possible in the current US political system, it will be a very brief discussion. 😄
If an estate tax is a form of wealth tax - and cleary it is - then it's not obvious to me why the most rational way of imposing taxation on wealth is on the basis of the occurrence of an unpredictable event. What not impose a wealth tax regularly every 10 years or every 5? or why not every year? If the concept is sound, why not do it in a rational and systematic way.
Quote from: Tonitrus on June 10, 2021, 03:18:07 PM
It doesn't dispose of those rights at all...you have them for the rest of your life.
It certainly interferes with people who wish to pass along wealth to their offspring.
Quote from: Berkut on June 10, 2021, 03:26:16 PM
How about we just get most wealthy people paying a significant estate tax, rather then trying for something that is totally impossible to get passed right now?
Because getting most wealthy people paying a significant estate tax is likely also impossible to pass.
What if we had a much more agressive estate tax, but it was easily avoided by simply donating, tax free, large portions of your wealth to defined and vetted charities (like the Gates Foundation)?
Basically, if you don't want the government getting your shit, give it away to some humanist charity. If you don't....then Uncle Sam gets to decide what to do with it all.
Quote from: Malthus on June 10, 2021, 03:29:01 PM
Quote from: Berkut on June 10, 2021, 03:26:16 PM
How about we just get most wealthy people paying a significant estate tax, rather then trying for something that is totally impossible to get passed right now?
If we are gonna limit the discussion of reforms it to what is actually possible in the current US political system, it will be a very brief discussion. 😄
Right. All we'll have left to discuss is the Beat Up on China Bill of 2021, and the resolution in favor of apple pie. Except even the latter will fail as the Squad condemns agribusiness and the GOPers refuse to have anything to do with fruit picked by illegal labor.
Quote from: The Minsky Moment on June 10, 2021, 03:29:28 PM
If an estate tax is a form of wealth tax - and cleary it is - then it's not obvious to me why the most rational way of imposing taxation on wealth is on the basis of the occurrence of an unpredictable event. What not impose a wealth tax regularly every 10 years or every 5? or why not every year? If the concept is sound, why not do it in a rational and systematic way.
The main reason seems to be based on a notion of fairness. It seems more fair to strip away wealth that was (notionally at least) earned, when the person who has earned it is no longer around - they cant, as the saying goes, take it with them.
Also - death unpredictable? The insurance industry would like a word. 😄
Quote from: The Minsky Moment on June 10, 2021, 03:29:28 PM
If an estate tax is a form of wealth tax - and cleary it is - then it's not obvious to me why the most rational way of imposing taxation on wealth is on the basis of the occurrence of an unpredictable event. What not impose a wealth tax regularly every 10 years or every 5? or why not every year? If the concept is sound, why not do it in a rational and systematic way.
One could counter that the likely targets of your wealth tax, with the wealth being mostly in the form of stock holdings, is that said imposition...or at least the level of impact it has...is also based on unpredictable events (namely, the stock price at any given time).
For example, you give Elon Musk a tax bill for 10% on his $100 billion-dollar Tesla stock value on 1 Jan 2022. On 3 Jan 2022, his Tesla stock value crashes to $1 billion. Ouch.
Quote from: Malthus on June 10, 2021, 03:32:04 PM
Quote from: The Minsky Moment on June 10, 2021, 03:29:28 PM
If an estate tax is a form of wealth tax - and cleary it is - then it's not obvious to me why the most rational way of imposing taxation on wealth is on the basis of the occurrence of an unpredictable event. What not impose a wealth tax regularly every 10 years or every 5? or why not every year? If the concept is sound, why not do it in a rational and systematic way.
The main reason seems to be based on a notion of fairness. It seems more fair to strip away wealth that was (notionally at least) earned, when the person who has earned it is no longer around - they cant, as the saying goes, take it with them.
Yeah I get the concept. I just think it would be terrible in practice and again it seems to me would be to make sure almost all the wealth of a country belongs to institutions with only scraps for people. I mean we already have that problem, this would just make it far worse.
I don't see a problem that an aggressive estate tax solves, and I see problems that it would create.
Quote from: Malthus on June 10, 2021, 03:32:04 PM
The main reason seems to be based on a notion of fairness. It seems more fair to strip away wealth that was (notionally at least) earned, when the person who has earned it is no longer around - they cant, as the saying goes, take it with them.
If you use the metaphor of taxation as "stripping away wealth" then its not clear to me why metaphorically looting a corpse is more "fair" then picking the pocket of the living.
But taxation in a free and democratic society isn't about stripping away wealth; its about a society deciding to collectively contribute private resources to public benefits. And wealth is arguably a better proxy than income for the private benefit that is reaped from living in a stable and effective state that enforces the rule of law and provides physical security.
Quote from: Berkut on June 10, 2021, 03:26:16 PM
How about we just get most wealthy people paying a significant estate tax, rather then trying for something that is totally impossible to get passed right now?
I probably should regret that my flippant remark has gotten so much serious play. :sleep:
Quote from: The Minsky Moment on June 10, 2021, 03:36:47 PM
Quote from: Malthus on June 10, 2021, 03:32:04 PM
The main reason seems to be based on a notion of fairness. It seems more fair to strip away wealth that was (notionally at least) earned, when the person who has earned it is no longer around - they cant, as the saying goes, take it with them.
If you use the metaphor of taxation as "stripping away wealth" then its not clear to me why metaphorically looting a corpse is more "fair" then picking the pocket of the living.
But taxation in a free and democratic society isn't about stripping away wealth; its about a society deciding to collectively contribute private resources to public benefits. And wealth is arguably a better proxy than income for the private benefit that is reaped from living in a stable and effective state that enforces the rule of law and provides physical security.
A corpse is, by definition, beyond worrying about what is in their pockets.
And yes, any system of taxation is about private payment for public good ... but the private payment is always gonna hurt. The issue is who is going to to feel that pain, and when.
Quote from: Tonitrus on June 10, 2021, 03:33:14 PM
Quote from: The Minsky Moment on June 10, 2021, 03:29:28 PM
If an estate tax is a form of wealth tax - and cleary it is - then it's not obvious to me why the most rational way of imposing taxation on wealth is on the basis of the occurrence of an unpredictable event. What not impose a wealth tax regularly every 10 years or every 5? or why not every year? If the concept is sound, why not do it in a rational and systematic way.
One could counter that the likely targets of your wealth tax, with the wealth being mostly in the form of stock holdings, is that said imposition...or at least the level of impact it has...is also based on unpredictable events (namely, the stock price at any given time).
For example, you give Elon Musk a tax bill for 10% on his $100 billion-dollar Tesla stock value on 1 Jan 2022. On 3 Jan 2022, his Tesla stock value crashes to $1 billion. Ouch.
Good news for him on his 2022 tax take . . .
It's true wealth can fluctuate significantly from year to year; the same is also true for income.
Quote from: The Brain on June 10, 2021, 03:36:20 PM
I don't see a problem that an aggressive estate tax solves, and I see problems that it would create.
Addendum: the Swedish way appears better to me. Education and health care is available paid for by tax money, so getting a fair chance in life doesn't require wealthy parents. And there is no estate tax and no gift tax.
Quote from: grumbler on June 10, 2021, 03:18:48 PM
Quote from: Malthus on June 10, 2021, 03:11:46 PM
I've always thought there were good arguments in favour of it. The notion being that wealth 'ought' to be earned by the person earning it, not merely accumulated. Though the children of the wealthy would get a major boost nonetheless, having grown up with the benefits of having wealthy parents ... after all, given average lifespans, they would be teaching retirement age themselves by the time such a tax would affect their parents.
The main strike against it is the difficulty in preventing the wealthy from getting around it in various ways.
The ways of getting around it can be closed. Tax tangible gifts over some small threshold as income, for instance. You could buy your child a car, but not a house.
That limits the estate tax to be effectively the income tax rate.
If I was a billionaire I could hire my doofus son to be CEO of some corporation I really run and pay him $100 million a year for a few years. (or more nefariously pay him in a hard to value asset that we convince the tax man is worth $1 million but really worth $100 million)
Quote from: Berkut on June 10, 2021, 03:31:25 PM
What if we had a much more agressive estate tax, but it was easily avoided by simply donating, tax free, large portions of your wealth to defined and vetted charities (like the Gates Foundation)?
Basically, if you don't want the government getting your shit, give it away to some humanist charity. If you don't....then Uncle Sam gets to decide what to do with it all.
Charities aren't well defined and aren't well vetted (consider the Trump Foundation).
And those charities can remain under a family's control for generations. Those family members can be employees of the charity or foundation. They can write off a bunch of different expenses (you know, your annual trip to Davos or whatever).
Quote from: The Minsky Moment on June 10, 2021, 03:36:47 PM
But taxation in a free and democratic society isn't about stripping away wealth; its about a society deciding to collectively contribute private resources to public benefits. And wealth is arguably a better proxy than income for the private benefit that is reaped from living in a stable and effective state that enforces the rule of law and provides physical security.
Sure, it's two wolves and a sheep collectively deciding to contribute a sheep for the collective dinner.
Quote from: Valmy on June 10, 2021, 03:36:07 PM
Quote from: Malthus on June 10, 2021, 03:32:04 PM
Quote from: The Minsky Moment on June 10, 2021, 03:29:28 PM
If an estate tax is a form of wealth tax - and cleary it is - then it's not obvious to me why the most rational way of imposing taxation on wealth is on the basis of the occurrence of an unpredictable event. What not impose a wealth tax regularly every 10 years or every 5? or why not every year? If the concept is sound, why not do it in a rational and systematic way.
The main reason seems to be based on a notion of fairness. It seems more fair to strip away wealth that was (notionally at least) earned, when the person who has earned it is no longer around - they cant, as the saying goes, take it with them.
Yeah I get the concept. I just think it would be terrible in practice and again it seems to me would be to make sure almost all the wealth of a country belongs to institutions with only scraps for people. I mean we already have that problem, this would just make it far worse.
I don't understand the point that the US lacks wealthy people. Allegedly, in the US, the top 10% of people held 70% of the wealth in the US ...
https://www.statista.com/statistics/299460/distribution-of-wealth-in-the-united-states/
I haven't seen a breakdown of wealth held by individuals versus institutions. Aren't institutions generally owned by individuals, through shares?
Quote from: The Minsky Moment on June 10, 2021, 03:29:28 PM
If an estate tax is a form of wealth tax - and cleary it is - then it's not obvious to me why the most rational way of imposing taxation on wealth is on the basis of the occurrence of an unpredictable event. What not impose a wealth tax regularly every 10 years or every 5? or why not every year? If the concept is sound, why not do it in a rational and systematic way.
A lot, if not most, of the super wealthy are going to have their wealth in the form of concentrated equity in specific companies. Jeff Bezos may be able to sell a few percentages of his Amazon stock every year, but for people that own privately held companies that isn't so easy. In those cases you may end up convincing people to sell out to larger companies in order to pay their tax bills...which is problematic from an economic perspective.
Quote from: Malthus on June 10, 2021, 03:43:55 PM
I haven't seen a breakdown of wealth held by individuals versus institutions. Aren't institutions generally owned by individuals, through shares?
A technicality. The institutions control all that wealth. It is not so easy to just unload all your shares.
And what? The government is now going to control every corporation once all those shares get taxed away?
Quote from: The Brain on June 10, 2021, 03:36:20 PM
I don't see a problem that an aggressive estate tax solves, and I see problems that it would create.
The issue is what kind of tax you want. Income, sales, tariffs on trade, or wealth?
All have problems.
Quote from: Malthus on June 10, 2021, 03:47:31 PM
Quote from: The Brain on June 10, 2021, 03:36:20 PM
I don't see a problem that an aggressive estate tax solves, and I see problems that it would create.
The issue is what kind of tax you want. Income, sales, tariffs on trade, or wealth?
All have problems.
Sure. But we are talking about a 100% tax here. I am not against estate taxes at all, but just taking everything for some ideological sense of fairness strikes me as a disastrous idea.
Quote from: Malthus on June 10, 2021, 03:47:31 PM
Quote from: The Brain on June 10, 2021, 03:36:20 PM
I don't see a problem that an aggressive estate tax solves, and I see problems that it would create.
The issue is what kind of tax you want. Income, sales, tariffs on trade, or wealth?
All have problems.
I'm not convinced that any taxes need to be aggressive.
Quote from: Valmy on June 10, 2021, 03:47:04 PM
Quote from: Malthus on June 10, 2021, 03:43:55 PM
I haven't seen a breakdown of wealth held by individuals versus institutions. Aren't institutions generally owned by individuals, through shares?
A technicality. The institutions control all that wealth. It is not so easy to just unload all your shares.
And what? The government is now going to control every corporation once all those shares get taxed away?
No? If I owe the taxman $1000, and I own $1000 in shares of (say) Microsoft, I don't usually just hand my shares over to the government to clear my tax bill. If I must, I sell those shares to someone else (thus handing control over to that lucky new owner) then use the money to pay my tax bill - the government does not, in thus way, gradually gain control over Microsoft.
Quote from: Barrister on June 10, 2021, 03:42:48 PM
Quote from: Berkut on June 10, 2021, 03:31:25 PM
What if we had a much more agressive estate tax, but it was easily avoided by simply donating, tax free, large portions of your wealth to defined and vetted charities (like the Gates Foundation)?
Basically, if you don't want the government getting your shit, give it away to some humanist charity. If you don't....then Uncle Sam gets to decide what to do with it all.
Charities aren't well defined and aren't well vetted (consider the Trump Foundation).
And those charities can remain under a family's control for generations. Those family members can be employees of the charity or foundation. They can write off a bunch of different expenses (you know, your annual trip to Davos or whatever).
...hence the point about having them be well defined and vetted?
Quote from: Valmy on June 10, 2021, 03:49:02 PM
Quote from: Malthus on June 10, 2021, 03:47:31 PM
Quote from: The Brain on June 10, 2021, 03:36:20 PM
I don't see a problem that an aggressive estate tax solves, and I see problems that it would create.
The issue is what kind of tax you want. Income, sales, tariffs on trade, or wealth?
All have problems.
Sure. But we are talking about a 100% tax here. I am not against estate taxes at all, but just taking everything for some ideological sense of fairness strikes me as a disastrous idea.
That depends. It may not be feasible (I'm no expert) to rely on only one type of taxation, but certain types are clearly better or worse than others.
For example - consumption taxes on consumables tend to be horribly regressive (meaning, they proportionality affect poor people more than wealthy people). Poor and rich alike buy roughly the same amount of toilet paper. A tax on toilet paper thus hits the poor more, in proportion to their means, than the wealthy.
A progressive income tax is better, but has problems dealing with the actual wealthy. It too is regressive, because it assumes that one's money comes from what could be defined as "income". The really wealthy don't get that way from a salary!
Tariffs are bad, they create a direct disincentive on efficient trade.
Wealth taxes appear to have the *least* drawbacks. So, since you must obtain money for the public good, it would make sense to rely largely on wealth taxes, rather than on these other kinds, because they are 'least bad'.
Quote from: alfred russel on June 10, 2021, 03:46:48 PM
Quote from: The Minsky Moment on June 10, 2021, 03:29:28 PM
If an estate tax is a form of wealth tax - and cleary it is - then it's not obvious to me why the most rational way of imposing taxation on wealth is on the basis of the occurrence of an unpredictable event. What not impose a wealth tax regularly every 10 years or every 5? or why not every year? If the concept is sound, why not do it in a rational and systematic way.
A lot, if not most, of the super wealthy are going to have their wealth in the form of concentrated equity in specific companies. Jeff Bezos may be able to sell a few percentages of his Amazon stock every year, but for people that own privately held companies that isn't so easy. In those cases you may end up convincing people to sell out to larger companies in order to pay their tax bills...which is problematic from an economic perspective.
Can't you solve that problem by just making the government a stakeholder in your illiquid assets (or even liquid assets that you don't want to liquidate)? Let's say you have $10,000,000 in cash, 1,000,000 Amazon shares, and one Picasso painting. When the end of the year comes around, your 2% wealth tax is paid by giving the government $200,000 in a brown bag, by earmarking 2% of your Amazon shares as belonging to the government but held by you, and 2% of the Picasso painting as belonging to the government by held by you along with the rest of the painting. The payment in cash is delayed until the assets are liquidated, at which point the government is paid its compounded share. In the meantime, all the liquid income that's generated from the government's stake is passed straight to the government.
FWIW I don't think that "fairness" is a very good reason to make policy. The word doesn't mean anything (or it means precisely anything). Reasons for policy should be discussed in way more specific terms to result in good policy.
Quote from: DGuller on June 10, 2021, 03:59:24 PM
Quote from: alfred russel on June 10, 2021, 03:46:48 PM
Quote from: The Minsky Moment on June 10, 2021, 03:29:28 PM
If an estate tax is a form of wealth tax - and cleary it is - then it's not obvious to me why the most rational way of imposing taxation on wealth is on the basis of the occurrence of an unpredictable event. What not impose a wealth tax regularly every 10 years or every 5? or why not every year? If the concept is sound, why not do it in a rational and systematic way.
A lot, if not most, of the super wealthy are going to have their wealth in the form of concentrated equity in specific companies. Jeff Bezos may be able to sell a few percentages of his Amazon stock every year, but for people that own privately held companies that isn't so easy. In those cases you may end up convincing people to sell out to larger companies in order to pay their tax bills...which is problematic from an economic perspective.
Can't you solve that problem by just making the government a stakeholder in your illiquid assets (or even liquid assets that you don't want to liquidate)? Let's say you have $10,000,000 in cash, 1,000,000 Amazon shares, and one Picasso painting. When the end of the year comes around, your 2% wealth tax is paid by giving the government $200,000 in a brown bag, by earmarking 2% of your Amazon shares as belonging to the government but held by you, and 2% of the Picasso painting as belonging to the government by held by you along with the rest of the painting. The payment in cash is delayed until the assets are liquidated, at which point the government is paid its compounded share. In the meantime, all the liquid income that's generated from the government's stake is passed straight to the government.
That seems reasonable but taxes have always been paid in tax (to the extent that in earlier times it has been attributed to nuking subsistence agriculture because they force people into the cash economy). It could also cause an issue in times when the government needs immediate cash - though being able to print money mitigates that it could be an issue if inflation was problematic.
:hmm: Now that I think of it, after 10 years, I can just sell my Picasso painting to my friend for $1, and give the government its share of 18.3 cents. Then I can buy it back for a $1 again. :hmm: Maybe scissors is the only sensible way to go about it.
I guess the government can get a right of first refusal on all sales of encumbered property, so it can step in and purchase the Picasso painting itself for $1, and give you back your 81.7 cents. :hmm:
Quote from: Barrister on June 10, 2021, 03:27:26 PM
But there are so many ways around it. Even with comparatively low estate taxes right now my understanding is if you have to pay them you have an idiot for an estate planner.
You tax gifts over a certain amount - so instead of a gift it's a sale at below-market rates. You guarantee a loan which is used to make investments. You hire someone to a position with lots of compensation but little work. You do the same with spouses or children.
Or you set up a trust or foundation. Having control over a multi-billion dollar charitable foundation is almost as good as being worth multi-billion dollars to begin with.
And that's without me being an expert in any of this.
The argument that we cannot collect taxes because there are tax avoidance strategies just gets us back to where we started.
Sales at below-market rates are explicitly gifts under tax law. If the gift forms are not filed (depending on the size of the gift), you go to jail.
Guaranteeing a loan is a gift. If the gift forms are not filed (depending on the size of the gift), you go to jail.
Hiring someone? Wages are taxed, so that's not tax avoidance.
Foundations can only spend money to advance the purposes of the foundation, which must be charitable. You can't create a foundation to buy your son a yacht.
And that's without me being an expert in any of this.
Quote from: Barrister on June 10, 2021, 03:42:48 PM
Charities aren't well defined and aren't well vetted (consider the Trump Foundation).
The Trump Foundation that was vetted and closed? Not a good example.
Estate tax is double taxation.
Quote from: Monoriu on June 10, 2021, 10:33:36 PM
Estate tax is double taxation.
So is sales tax, so what?
Quote from: DGuller on June 10, 2021, 10:35:48 PM
Quote from: Monoriu on June 10, 2021, 10:33:36 PM
Estate tax is double taxation.
So is sales tax, so what?
So it is less than ethical and you should not do it :contract:
How is the estate tax even double taxation, anyway? The parent paid a tax when acquiring those assets, the inheritors pay another tax when acquiring those assets. It's different people.
Again, as DGuller says, not that we aren't already double-taxing a bunch of things.
Quote from: alfred russel on June 10, 2021, 03:46:48 PM
A lot, if not most, of the super wealthy are going to have their wealth in the form of concentrated equity in specific companies. Jeff Bezos may be able to sell a few percentages of his Amazon stock every year, but for people that own privately held companies that isn't so easy. In those cases you may end up convincing people to sell out to larger companies in order to pay their tax bills...which is problematic from an economic perspective.
One of the notable characteristics of the last 20 years has been the increasing depth and liquidity of the markets for private securities. The buyers are not big companies but funds and investors that focus on such investments. Owners and founders already are heavy users of this market now to generate needed income and diversify.
Quote from: Monoriu on June 10, 2021, 10:39:55 PM
Quote from: DGuller on June 10, 2021, 10:35:48 PM
Quote from: Monoriu on June 10, 2021, 10:33:36 PM
Estate tax is double taxation.
So is sales tax, so what?
So it is less than ethical and you should not do it :contract:
Should people not pay income tax if they are paid by a corporation that already paid corporate tax on their profits? I mean the heirs have never paid tax on that money, so where is the double taxation going on?
It strikes me that it is very hard to find any taxation on any bit of money that has not been previously taxed in a previous transaction.
Quote from: grumbler on June 10, 2021, 07:57:54 PM
Quote from: Barrister on June 10, 2021, 03:42:48 PM
Charities aren't well defined and aren't well vetted (consider the Trump Foundation).
The Trump Foundation that was vetted and closed? Not a good example.
The Trump Foundation is the exception that proves the rule. It's actions were so far from any charitable purpose, so outrageous in it's self-serving behaviour - yet it took Trump becoming President and having the world's biggest target on his back to have it shut down.
Quote from: Barrister on June 11, 2021, 10:31:17 AM
Quote from: grumbler on June 10, 2021, 07:57:54 PM
Quote from: Barrister on June 10, 2021, 03:42:48 PM
Charities aren't well defined and aren't well vetted (consider the Trump Foundation).
The Trump Foundation that was vetted and closed? Not a good example.
The Trump Foundation is the exception that proves the rule. It's actions were so far from any charitable purpose, so outrageous in it's self-serving behaviour - yet it took Trump becoming President and having the world's biggest target on his back to have it shut down.
It is bizarre to see a prosecutor argue that we cannot restrict people from doing things because they might break the rules.
Quote from: Barrister on June 11, 2021, 10:31:17 AM
Quote from: grumbler on June 10, 2021, 07:57:54 PM
Quote from: Barrister on June 10, 2021, 03:42:48 PM
Charities aren't well defined and aren't well vetted (consider the Trump Foundation).
The Trump Foundation that was vetted and closed? Not a good example.
The Trump Foundation is the exception that proves the rule. It's actions were so far from any charitable purpose, so outrageous in it's self-serving behaviour - yet it took Trump becoming President and having the world's biggest target on his back to have it shut down.
Ah, the old "correlation = causation" fallacy. I would have thought a prosecutor would be especially sensitive to its abuse.
Remember the First Rule of Holes.
Quote from: grumbler on June 11, 2021, 06:12:46 PM
Remember the First Rule of Holes.
You don't pay 'em they get upset?
You don't talk about Holes.
Quote from: grumbler on June 11, 2021, 06:12:46 PM
Quote from: Barrister on June 11, 2021, 10:31:17 AM
Quote from: grumbler on June 10, 2021, 07:57:54 PM
Quote from: Barrister on June 10, 2021, 03:42:48 PM
Charities aren't well defined and aren't well vetted (consider the Trump Foundation).
The Trump Foundation that was vetted and closed? Not a good example.
The Trump Foundation is the exception that proves the rule. It's actions were so far from any charitable purpose, so outrageous in it's self-serving behaviour - yet it took Trump becoming President and having the world's biggest target on his back to have it shut down.
Ah, the old "correlation = causation" fallacy. I would have thought a prosecutor would be especially sensitive to its abuse.
Remember the First Rule of Holes.
:rolleyes:
Yeah, I think I'm done trying to have substantive debates here.
Not leaving - there's the odd bit of personal info to share, or pop culture talk, but serious political debates? I'm over it.
Because of grumbler? Really?
That's crazy talk Beeb.
About 10 or 15 years too late, if you ask me. :lol:
BB had a rough week here. Take some time to breath and remember the posters you should ignore. It helps.
Grumbler is a poor choice for a last straw, B. :P
Quote from: Barrister on June 11, 2021, 10:37:34 PM
Quote from: grumbler on June 11, 2021, 06:12:46 PM
Ah, the old "correlation = causation" fallacy. I would have thought a prosecutor would be especially sensitive to its abuse.
Remember the First Rule of Holes.
:rolleyes:
Yeah, I think I'm done trying to have substantive debates here.
Not leaving - there's the odd bit of personal info to share, or pop culture talk, but serious political debates? I'm over it.
If that's all it takes to trigger you, maybe you should take a break.
Quote from: Tamas on June 12, 2021, 01:15:36 AM
Grumbler is a poor choice for a last straw, B. :P
Listen to the man. At least choose someone who engages in ad homs or strawman arguments, or red herrings as your last straw.
Quote from: grumbler on June 12, 2021, 08:01:25 AM
Quote from: Tamas on June 12, 2021, 01:15:36 AM
Grumbler is a poor choice for a last straw, B. :P
Listen to the man. At least choose someone who engages in ad homs or strawman arguments, or red herrings as your last straw.
That's not what I meant and you know it. :P
First Rule of Languish: When you find yourself debating Grumbler, stop.
Quote from: Eddie Teach on June 12, 2021, 09:51:55 PM
First Rule of Languish: When you find yourself debating Grumbler, stop.
That's not what a Michigan Man would say.
Quote from: Eddie Teach on June 12, 2021, 09:51:55 PM
First Rule of Languish: When you find yourself debating Grumbler, stop.
That's certainly true if you are debating an issue and taking the position with inferior evidence. :P
I think taxing wealth is necessary now because inequality that concerns me and I think is reaching socially dangerous levels is around wealth not income. I don't really think there's a significant difference between wealth or inheritance tax on this because these structures exist to avoid all sorts of tax - you'd still need to work out the corporate structure around someone's wealth to tax it in their life as to tax it after they died. But I also think taxing wealth would have very positive side effects such as increased transparency and crack-downs on tax havens and highly engineered multi-jurisdictional coroporate structures to hold investments.
I think at the minute the IMF estimate is that 10% of the world's wealth is hidden in tax havens - but we don't know. Trillions of dollars every year flow from the world's poorest countries to the world's richest because we have created this entire artificials world of South Dakotan Trusts and Scottish Limited Partnerships and Cypriot holding companies for our own rich, but I think it fuels a morally outrageous level of theft globally. I don't entirely think we can just sit there teling Nigeria or Ukraine to be less corrupt when it's very well paid British, Dutch, American etc lawyers who've created the global infrastructure for corruption. It wouldn't end corruption but it would certainly increase the risk if they had to rely on off-shore accounts in less reputable/rule-of-law focused jurisdictions which would be a start.
I think a lot of the transparency and controls necessary for a wealth tax would also be very helpful in exposing that and beginning to tackle it.
Even on income things are becoming grossly skewed.
Its all very logical how it has ended up this way.
Once upon a time you needed 100,000 workers to produce the needed number of widgets in your factory. Now you only need 5,000 to produce the same amount. Sure those workers are paid 2-3 times as much. And you've probably passed on some of the savings to the consumer. But there's a lot of money flowing into the hands of the owner that historically wouldn't have been.
Meanwhile that 95,000 people he would otherwise have been employing are out of work.
Money makes money of course. This builds up exponentially over time. There needs to be a look at wealth too. But even on income things need fixing. And its definitely an international problem. Without international cooperation the old fallacy of "all the rich will just move if you tax them!" gains a kernal of truth, albeit its their assets rather than they themselves.
The trouble is I don't see how to get international cooperation on this. The countries profiting from it have a vested interest in keeping things so. Britain in particular seems keen on a new pirate nation status.
Quote from: Tyr on June 14, 2021, 05:57:04 AM
Even on income things are becoming grossly skewed.
Its all very logical how it has ended up this way.
Once upon a time you needed 100,000 workers to produce the needed number of widgets in your factory. Now you only need 5,000 to produce the same amount. Sure those workers are paid 2-3 times as much. And you've probably passed on some of the savings to the consumer. But there's a lot of money flowing into the hands of the owner that historically wouldn't have been.
Meanwhile that 95,000 people he would otherwise have been employing are out of work.
If that logical story were true, then most of the increase in capital share of income would be seen in manufacturing sectors that are rapidly automating; that is not really true in the US. you would also expect to see increasing levels of productivity; the opposite is true.
About 1/3 of the increase in the US occurred in real estate and extractive industries. Those industries exhibited "supercycles" during the relevant period - basically owners were able to take advantage of quick spurts in the prices of the commodity. Another big contribution came from wholesale and retail services, transportation and services and communications - these were all sectors that experienced high levels of industry consolidation (mergers) - an example of old-fashioned oligopoly power in action.
Tyr, I don't know that businesses are especially profitable compared to what they have been historically.
But a change that has happened is that the world is far more stable and that people have less children. It used to be that major wars or other upheaval came along to reset everyone to zero relatively frequently. For those few places lucky enough to escape that, if all the wealthy people have 10 kids starting at age 20, it doesn't take long for the inheritances to get whittled away to nothing.
Now it is really rare that a developed country goes through major upheaval, and with globalization that doesn't even necessarily upend the wealthier parts of society (most of the super wealthy in venezuela had wealth parked offshore). And then if you only have 2 kids starting at age 30-35, inheritances don't get diluted away but returns on investments can keep accumulating.
Quote from: Tyr on June 14, 2021, 05:57:04 AM
The trouble is I don't see how to get international cooperation on this. The countries profiting from it have a vested interest in keeping things so. Britain in particular seems keen on a new pirate nation status.
British company law is pretty good - we're just incredibly bad at enforcement of white collar crime. I think part of it is just laziness because it's complicated and expensive so one or two big failures - like the collapse of the SFO's Jubilee line corruption case have a big impact. It cost tens of millions of pounds but unlike normal criminals these guys have the resources to hire lots of very good lawyers so it kind of needs to be perfect. I think we sort of need some form of almost an FBI whose job is to investigate white collar and serious crimes (like organised crime or terrorism) on a national basis. At the minute I think it's dispersed to each police force but the Met provides support.
But an anti-corruption campaigner has said the ideal situation would be British style company law (which is very transparent and publicly available) with American style enforcement - the FBI and the SEC prosecute far more aggressively and successfully than we do in the UK and, anecdotally, I've heard similar complaints about other European police forces.
British lawyers help engineer it - and there are these British outposts (which we don't actually run) like the BVI or Cayman who basically get their tax and corporate laws written by American and British lawyers for the advantage of their clients. But our domestic law is pretty good in theory, just very under-enforced.
QuoteMoney makes money of course. This builds up exponentially over time. There needs to be a look at wealth too. But even on income things need fixing. And its definitely an international problem. Without international cooperation the old fallacy of "all the rich will just move if you tax them!" gains a kernal of truth, albeit its their assets rather than they themselves.
Yeah - the money absolutely does just move anywhere. But I think on a national level income inequality is less extreme than wealth and I think it's growing less quickly - plus I have less of an issue with someone earning lots of money (as long as they pay their taxes) than accruing enormous wealth which becomes generational.
Quote from: alfred russel on June 14, 2021, 07:52:15 AM
Tyr, I don't know that businesses are especially profitable compared to what they have been historically.
They aren't, at least in the US.
That doesn't quite tell the whole story because there can be distributional impacts from things like generating the same gross proportion of profits from increased leverage or from the fact that reported gross profit levels may be suppressed by changes in industry composition, among others.
Also, always need to keep in mind Pikettys finding that increases in the inequality of distribution within wage and salary income is as significant a contributor to overall widening inequalities as increases in capital share of income vs labor share.
Quote from: The Minsky Moment on June 14, 2021, 07:48:17 AM
If that logical story were true, then most of the increase in capital share of income would be seen in manufacturing sectors that are rapidly automating; that is not really true in the US. you would also expect to see increasing levels of productivity; the opposite is true.
About 1/3 of the increase in the US occurred in real estate and extractive industries. Those industries exhibited "supercycles" during the relevant period - basically owners were able to take advantage of quick spurts in the prices of the commodity. Another big contribution came from wholesale and retail services, transportation and services and communications - these were all sectors that experienced high levels of industry consolidation (mergers) - an example of old-fashioned oligopoly power in action.
It was a simplification of the complexities of the global economy. You're over thinking it a bit there.
The point is the number of workers required is dropping, thus decreasing the chunk of the pie going to workers, whilst business people are pocketing more of the profits.
Even from the business POV this is a dangerous precedent as it cuts down on the number of consumers available.
Quote from: Tyr on June 14, 2021, 08:23:03 AM
The point is the number of workers required is dropping,
I don't think this is true: total employment is higher than ever (cheating a bit since population is higher than ever), and while I can't speak to global unemployment rates in the US they were near all time lows pre pandemic. Real wages are also up and global poverty rates down.
Quote from: alfred russel on June 14, 2021, 08:31:12 AM
Quote from: Tyr on June 14, 2021, 08:23:03 AM
The point is the number of workers required is dropping,
I don't think this is true: total employment is higher than ever (cheating a bit since population is higher than ever), and while I can't speak to global unemployment rates in the US they were near all time lows pre pandemic. Real wages are also up and global poverty rates down.
The correlation between official employment rates and actual employment rate has completely fallen out of sync since 2008.
Under employment, zero hours contracts, etc... are a huge problem.
The period from roughly 1950-1973 was one of decreasing income and wealth inequality in the OECD nations. It was also a period of high productivity increases and automation. Ever since the industrial revolution got going it has *always* been the case over time the number of workers needed to produce X goods goes down.