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What do you propose should happen in Bezos' case? Let's assume that he doesn't have $139B in the bank, but most of his wealth is the value of his Amazon stock.

What do you propose should happen in Bezos' case? Let's assume that he doesn't have $139B in the bank, but most of his wealth is the value of his Amazon stock. Should he be forced to give up his ownership in the company he built? I have heard people opine that people like Bezos should be taxed at 90%, but what if he doesn't sell his shares? If he wants to sell $10M or so to buy a nice house and a new car, do you think he doesn't deserve to do so? Where do you draw the line?

dmitriid 6y ago
With 139 billion he can buy a 10M home every day for 38 years straight. So yeah. A line can and should be drawn somewhere.
josefx 6y ago
> Should he be forced to give up his ownership in the company he built? How do you even picture that claim? Is it Bezos literally building every warehouse with his own two hands? Is it him being at a thousand places at once dealing with paperwork, marketing and packaging all by himself? For every billionaire out there there are thousands of workers that were denied their share of the success. I would say the only way someone could be a honest "self made" billionaire is by mugging an other billionaire in a dark alley.
- anchpop 6y ago
  There's a colloquial sense of building something that doesn't require that you do 100% of the work yourself. For example, when people say they're building a house, almost always they're just hiring someone else to actually build it and all they've contributed was money. Besides that, there are some billionaires that did get their wealth honestly in my estimation, like JK Rowling and Markus Persson.
  - josefx 6y ago
    > JK Rowling A good point. I wasn't aware that she was a billionaire and she apparently gave most of it away by now, dropping her well bellow a billion again. > Markus Persson. I remember that there was a lot of controversy around Minecraft, but I can't accurately recall the details to counter that.
jonstewart 6y ago
When you say, “draw the line”, my gut reaction is “curves beat lines.” Cliff thresholds often lead to bad behavior. I think in all cases, not just with Bezos, the following tax policies should be under consideration. What the precise points should be is more a matter for experts. With the below in place, I don’t see too much harm with being a billionaire in stock in the company one founded. - Significantly higher marginal tax rates further up the income ladder. US high end marginal tax rates are historically and relatively low; at the same time the US runs an incredible deficit. It’s crazy. - Increasing tax rates on dividend earnings for individuals, so that they converge to the income tax rates based on some income/earnings thresholds. Large share holders like Bezos can make millions via dividends, and get a far better tax rate than you or I. It doesn’t make any sense. For mutual funds and companies, etc., dividend taxation could be treated as now without much negative impact. - Increasing tax rates on capital gains when realized. If Bezos wants to sell $10M of stock to buy a fancy new house and car, great, but at some level of capital gains it makes sense for the rates to rise as it otherwise becomes another kind of income tax dodge. - Inheritance taxes increasing steeply with the amount of the estate. Sam Walton worked his ass off; his kids didn’t. It’s perfectly normal to want to leave your kids something, but after a certain point it seems rather a social anti-pattern to have a trust fund class, especially at extreme amounts of wealth (which is what we are talking here). - Limits on loss depreciation for individuals. Perhaps not quite as important but also subject to a lot of abuse. Of course, I also think there’s much that needs to be done with campaign finance reform, lowering corporate tax rates, automatic antitrust provisions that come into play when a company becomes relatively too big, and increased penalties for corporate externalities (like privacy violations, pollution, etc.). Hope this helps. What do you think we should do?
- Krustopolis 6y ago
  By "draw the line" I was referring to how much you would take from him if he wanted to convert some of his equity in Amazon into cash. Although I feel like I do appreciate the points you listed above, even with those measures in place there are no guarantees that "billionaires as a class of people" would cease to exist. Certainly with someone like Bezos, unless you take it all there is going to be a number that will still net him a billion after all of the taxes. And if you do "take it all", then maybe the next Bezos, Zuckerberg, or Gates starts the next company in another jurisdiction with less of an appetite for taxation, drawing away with it the capital and all of the follow-on effects it provides (jobs, spending in the community, etc.). And given the lengths we know that rich people will go to protect their money, that line has to be drawn at far less than "all" to keep them. On the other end of the extreme, even if he never sells a share those shares still allow him to wield a tremendous amount of power. So in the short run, all the taxes in the world would change nothing (Amazon does not pay dividends). It would just give him more time to figure out how to evade the taxes in the long run. :) I am moved by the argument that Walton's kids shouldn't get it all, but I'm not sure that transferring some or all of his property to the government is a good idea. You would then just have a "trust fund class" of politicians and bureacrats! (BTW your Walton comment has got me pumped for season 3 of "Succession") I like your overall thesis, I just think we should be less punitive with those exceptional people who do indeed add tremendous value to our economy and society.

dmitriid 6y ago

With 139 billion he can buy a 10M home every day for 38 years straight. So yeah. A line can and should be drawn somewhere.

josefx 6y ago

> Should he be forced to give up his ownership in the company he built? How do you even picture that claim? Is it Bezos literally building every warehouse with his own two hands? Is it him being at a thousand places at once dealing with paperwork, marketing and packaging all by himself? For every billionaire out there there are thousands of workers that were denied their share of the success. I would say the only way someone could be a honest "self made" billionaire is by mugging an other billionaire in a dark alley.

anchpop 6y ago
There's a colloquial sense of building something that doesn't require that you do 100% of the work yourself. For example, when people say they're building a house, almost always they're just hiring someone else to actually build it and all they've contributed was money. Besides that, there are some billionaires that did get their wealth honestly in my estimation, like JK Rowling and Markus Persson.
- josefx 6y ago
  > JK Rowling A good point. I wasn't aware that she was a billionaire and she apparently gave most of it away by now, dropping her well bellow a billion again. > Markus Persson. I remember that there was a lot of controversy around Minecraft, but I can't accurately recall the details to counter that.

jonstewart 6y ago

When you say, “draw the line”, my gut reaction is “curves beat lines.” Cliff thresholds often lead to bad behavior. I think in all cases, not just with Bezos, the following tax policies should be under consideration. What the precise points should be is more a matter for experts. With the below in place, I don’t see too much harm with being a billionaire in stock in the company one founded. - Significantly higher marginal tax rates further up the income ladder. US high end marginal tax rates are historically and relatively low; at the same time the US runs an incredible deficit. It’s crazy. - Increasing tax rates on dividend earnings for individuals, so that they converge to the income tax rates based on some income/earnings thresholds. Large share holders like Bezos can make millions via dividends, and get a far better tax rate than you or I. It doesn’t make any sense. For mutual funds and companies, etc., dividend taxation could be treated as now without much negative impact. - Increasing tax rates on capital gains when realized. If Bezos wants to sell $10M of stock to buy a fancy new house and car, great, but at some level of capital gains it makes sense for the rates to rise as it otherwise becomes another kind of income tax dodge. - Inheritance taxes increasing steeply with the amount of the estate. Sam Walton worked his ass off; his kids didn’t. It’s perfectly normal to want to leave your kids something, but after a certain point it seems rather a social anti-pattern to have a trust fund class, especially at extreme amounts of wealth (which is what we are talking here). - Limits on loss depreciation for individuals. Perhaps not quite as important but also subject to a lot of abuse. Of course, I also think there’s much that needs to be done with campaign finance reform, lowering corporate tax rates, automatic antitrust provisions that come into play when a company becomes relatively too big, and increased penalties for corporate externalities (like privacy violations, pollution, etc.). Hope this helps. What do you think we should do?

Krustopolis 6y ago
By "draw the line" I was referring to how much you would take from him if he wanted to convert some of his equity in Amazon into cash. Although I feel like I do appreciate the points you listed above, even with those measures in place there are no guarantees that "billionaires as a class of people" would cease to exist. Certainly with someone like Bezos, unless you take it all there is going to be a number that will still net him a billion after all of the taxes. And if you do "take it all", then maybe the next Bezos, Zuckerberg, or Gates starts the next company in another jurisdiction with less of an appetite for taxation, drawing away with it the capital and all of the follow-on effects it provides (jobs, spending in the community, etc.). And given the lengths we know that rich people will go to protect their money, that line has to be drawn at far less than "all" to keep them. On the other end of the extreme, even if he never sells a share those shares still allow him to wield a tremendous amount of power. So in the short run, all the taxes in the world would change nothing (Amazon does not pay dividends). It would just give him more time to figure out how to evade the taxes in the long run. :) I am moved by the argument that Walton's kids shouldn't get it all, but I'm not sure that transferring some or all of his property to the government is a good idea. You would then just have a "trust fund class" of politicians and bureacrats! (BTW your Walton comment has got me pumped for season 3 of "Succession") I like your overall thesis, I just think we should be less punitive with those exceptional people who do indeed add tremendous value to our economy and society.