6 ms·

> but in behavior influencing. Ah, yes - because of course we want people to spend all their money before they die instead of investing long-term for their chi

> but in behavior influencing. Ah, yes - because of course we want people to spend all their money before they die instead of investing long-term for their children.

ianleeclark 6y ago
These things aren't mutually exclusive. You could spend extravagantly on your child's education and give them a genuine leg-up on the competition.
- DuskStar 6y ago
  Oh, sure - I'll spend extravagantly on their education, take them travelling around the world, do everything I can to set them up for success - but if I can't leave them my company, there's no reason not to run it into the ground for short-term gains before I die. Stock market "only cares about next quarter" anyways, after all...
  - ianleeclark 6y ago
    I see you're taking the Toys R Us strategy. Or is it the Sears strategy? Or the we work strategy? Huh, I'm starting to notice that people already do incredibly stupid things with their companies for short term gain already. Now, I'm naturally willing to be proven wrong, but it looks like (from a cursory googling) that most firms only last about 10 years. https://time.com/3768559/company-mortality-rate-survival-study/ https://time.com/3768559/company-mortality-rate-survival-stu... You may think you're building an empire, but you're probably not.
    - AnthonyMouse 6y ago
      Starbucks, founded 1971, fifty years old next year. Caterpillar Inc., founded 1925. Ford, 1903. 3M, 1902. Kroger, 1883. Campbell Soup, 1869. Pfizer, 1849. Proctor & Gamble, 1837. Colgate-Palmolive, 1806. Some people already do incredibly stupid things with their companies for short term gain already. Do we need more of them to?
      - lowmemcpu 6y ago
        > Starbucks, founded 1971, fifty years old next year. Caterpillar Inc., founded 1925. Ford, 1903. 3M, 1902. Kroger, 1883. Campbell Soup, 1869. Pfizer, 1849. Proctor & Gamble, 1837. Colgate-Palmolive, 1806. Choosing a handful of successful winners in comparison to "most firms only last about 10 years" is a selection bias. All of the original members of the DOW Jones industrial average have declared bankruptcy or been absorbed into other companies -- except General Electric! Oh wait, they were just removed from the index
        AnthonyMouse 6y ago
        > Choosing a handful of successful winners in comparison to "most firms only last about 10 years" is a selection bias. "Most firms only last about 10 years" is selection bias because most firms don't even last 10 years. Infant mortality is very high. The firms that do last 10 years usually last 20 or more. Meanwhile you're ignoring my point -- it isn't a question of how many companies are destroyed, it's a question of destroying even more of them. Some evidence that maintaining a stable company is hard is not an argument for making it even harder.
        lowmemcpu 6y ago
        > "Most firms only last about 10 years" is selection bias because most firms don't even last 10 years. How is that selection bias? > Meanwhile you're ignoring my point -- it isn't a question of how many companies are destroyed, it's a question of destroying even more of them. Some evidence that maintaining a stable company is hard is not an argument for making it even harder. Sure. I'm not proposing we should make it harder
  - throwawaygh 6y ago
    > my company... Stock market... If you're publicly listed, it's not your company anymore. > there's no reason not to run it into the ground for short-term gains before I die Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new boss. Nepotism is gross. Or, you could distribute more ownership in the business over time to the employees that help build your wealth. But no. If you can't pass the wealth to your kid, then there's literally no reason to do anything other than burn everything down.
    - DuskStar 6y ago
      > If you're publicly listed, it's not your company anymore. Well, maybe. Something can be publicly listed while being majority owned by one person. But the "short-term vs long-term" dichotomy was meant more as a commentary on valuations and discount rates in general. > Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new CEO. Nepotism is gross. This is completely unrelated to ownership.
      - throwawaygh 6y ago
        >> Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new CEO. Nepotism is gross. > This is completely unrelated to ownership. So if the kid's going to sit back and not interfere then it's kind of irrelevant that it's your business. Might was well be a portfolio.
    - mickelsen 6y ago
      I take it that you don't have children? Are family business gross? Sure, you could argue on a bigger level because of the power concentration, but you are applying the same thought to a small biz. Usually when the kids are not so bright, and you notice it as a father and company-owner, you just promote someone qualified -that you trust- to manage it and own some shares, but the control stays in your network. If you don't like it, go build something yourself.
      - 6y ago
shuntress 6y ago
Whether their money is given directly to their children or given to the state does not itself determine whether that money has been invested "long-term for their children". What matters is how that money is used. If it all goes to decade-long revitalization projects in a distant town to which their children eventually move for a happy retirement, is that an effective long-term investment?
dmarchand90 6y ago
I can't think of another mechanism from preventing a permanent aristocratic class from passive investment
- DuskStar 6y ago
  I can! Spendthrift children. Or even just plummeting real yields on investment like we've been seeing over the past decade. Another commenter posted [0], which indicates that there's something besides inheritance taxes driving successive generations back towards the mean. 0: https://www.nasdaq.com/articles/generational-wealth%3A-why-do-70-of-families-lose-their-wealth-in-the-2nd-generation-2018-10 https://www.nasdaq.com/articles/generational-wealth%3A-why-d...
  - throwawaygh 6y ago
    >>> Ah, yes - because of course we want people to spend all their money before they die instead of investing long-term for their children. >> I can't think of another mechanism from preventing a permanent aristocratic class from passive investment > I can! Spendthrift children. Well, in that case, it's all gonna be spent instead of invested anyways, so GGP's argument is moot and we might as well just tax it instead of having employees of public sector companies subsidize the layabout.
    - DuskStar 6y ago
      > preventing a permanent aristocratic class from passive investment Well, there's a difference between passive and active investment...
      - throwawaygh 6y ago
        > Well, there's a difference between passive and active investment... If the child of the wealthy person is bad with money, then having them actively invest that money is net harmful. And if the child of the wealthy person is not bad with money, having them actively invest that money ends up with dynasties. And we're back to the same double bind: to defend the wealth tax, you need to either a) justify dynasties or else b) explain why we should subtract from the salaries of employees at public sector companies in order to subsidize dividend payments/bond yields for one or two generations of destructive layabouts. (TBH there are reasonable arguments for family wealth and for allowing layabouts, but I don't think there's any way out of this bind. "oh don't worry, they'll piss away that money anyways" is a bad reason for not taxing someone.)
supernova87a 6y ago
You're arguing in a 0/1 fashion, where the tax itself is a matter of degree. There is a setpoint (or $ quantity vs. tax %) of this tax where the goals of helping your children are weighed against wealth-hoarding legacy family enrichment. It is most definitely a parameter that the government + people of a country should comment on.
notacoward 6y ago
You say "investing for their children". Somebody else might say "perpetuating the aristocracy". Same thing. Why do those children deserve any more investment than any other children? How does that contribute to a fair society, or even to a prosperous one?
MisterBastahrd 6y ago
This would be far more beneficial to the economy as a whole than the alternative, yes.

> but in behavior influencing. Ah, yes - because of course we want people to spend all their money before they die instead of investing long-term for their children.

ianleeclark 6y ago

These things aren't mutually exclusive. You could spend extravagantly on your child's education and give them a genuine leg-up on the competition.

DuskStar 6y ago
Oh, sure - I'll spend extravagantly on their education, take them travelling around the world, do everything I can to set them up for success - but if I can't leave them my company, there's no reason not to run it into the ground for short-term gains before I die. Stock market "only cares about next quarter" anyways, after all...
- ianleeclark 6y ago
  I see you're taking the Toys R Us strategy. Or is it the Sears strategy? Or the we work strategy? Huh, I'm starting to notice that people already do incredibly stupid things with their companies for short term gain already. Now, I'm naturally willing to be proven wrong, but it looks like (from a cursory googling) that most firms only last about 10 years. https://time.com/3768559/company-mortality-rate-survival-study/ https://time.com/3768559/company-mortality-rate-survival-stu... You may think you're building an empire, but you're probably not.
  - AnthonyMouse 6y ago
    Starbucks, founded 1971, fifty years old next year. Caterpillar Inc., founded 1925. Ford, 1903. 3M, 1902. Kroger, 1883. Campbell Soup, 1869. Pfizer, 1849. Proctor & Gamble, 1837. Colgate-Palmolive, 1806. Some people already do incredibly stupid things with their companies for short term gain already. Do we need more of them to?
    - lowmemcpu 6y ago
      > Starbucks, founded 1971, fifty years old next year. Caterpillar Inc., founded 1925. Ford, 1903. 3M, 1902. Kroger, 1883. Campbell Soup, 1869. Pfizer, 1849. Proctor & Gamble, 1837. Colgate-Palmolive, 1806. Choosing a handful of successful winners in comparison to "most firms only last about 10 years" is a selection bias. All of the original members of the DOW Jones industrial average have declared bankruptcy or been absorbed into other companies -- except General Electric! Oh wait, they were just removed from the index
      - AnthonyMouse 6y ago
        > Choosing a handful of successful winners in comparison to "most firms only last about 10 years" is a selection bias. "Most firms only last about 10 years" is selection bias because most firms don't even last 10 years. Infant mortality is very high. The firms that do last 10 years usually last 20 or more. Meanwhile you're ignoring my point -- it isn't a question of how many companies are destroyed, it's a question of destroying even more of them. Some evidence that maintaining a stable company is hard is not an argument for making it even harder.
        lowmemcpu 6y ago
        > "Most firms only last about 10 years" is selection bias because most firms don't even last 10 years. How is that selection bias? > Meanwhile you're ignoring my point -- it isn't a question of how many companies are destroyed, it's a question of destroying even more of them. Some evidence that maintaining a stable company is hard is not an argument for making it even harder. Sure. I'm not proposing we should make it harder
- throwawaygh 6y ago
  > my company... Stock market... If you're publicly listed, it's not your company anymore. > there's no reason not to run it into the ground for short-term gains before I die Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new boss. Nepotism is gross. Or, you could distribute more ownership in the business over time to the employees that help build your wealth. But no. If you can't pass the wealth to your kid, then there's literally no reason to do anything other than burn everything down.
  - DuskStar 6y ago
    > If you're publicly listed, it's not your company anymore. Well, maybe. Something can be publicly listed while being majority owned by one person. But the "short-term vs long-term" dichotomy was meant more as a commentary on valuations and discount rates in general. > Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new CEO. Nepotism is gross. This is completely unrelated to ownership.
    - throwawaygh 6y ago
      >> Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new CEO. Nepotism is gross. > This is completely unrelated to ownership. So if the kid's going to sit back and not interfere then it's kind of irrelevant that it's your business. Might was well be a portfolio.
  - mickelsen 6y ago
    I take it that you don't have children? Are family business gross? Sure, you could argue on a bigger level because of the power concentration, but you are applying the same thought to a small biz. Usually when the kids are not so bright, and you notice it as a father and company-owner, you just promote someone qualified -that you trust- to manage it and own some shares, but the control stays in your network. If you don't like it, go build something yourself.
    - 6y ago

shuntress 6y ago

Whether their money is given directly to their children or given to the state does not itself determine whether that money has been invested "long-term for their children". What matters is how that money is used. If it all goes to decade-long revitalization projects in a distant town to which their children eventually move for a happy retirement, is that an effective long-term investment?

dmarchand90 6y ago

I can't think of another mechanism from preventing a permanent aristocratic class from passive investment

DuskStar 6y ago
I can! Spendthrift children. Or even just plummeting real yields on investment like we've been seeing over the past decade. Another commenter posted [0], which indicates that there's something besides inheritance taxes driving successive generations back towards the mean. 0: https://www.nasdaq.com/articles/generational-wealth%3A-why-do-70-of-families-lose-their-wealth-in-the-2nd-generation-2018-10 https://www.nasdaq.com/articles/generational-wealth%3A-why-d...
- throwawaygh 6y ago
  >>> Ah, yes - because of course we want people to spend all their money before they die instead of investing long-term for their children. >> I can't think of another mechanism from preventing a permanent aristocratic class from passive investment > I can! Spendthrift children. Well, in that case, it's all gonna be spent instead of invested anyways, so GGP's argument is moot and we might as well just tax it instead of having employees of public sector companies subsidize the layabout.
  - DuskStar 6y ago
    > preventing a permanent aristocratic class from passive investment Well, there's a difference between passive and active investment...
    - throwawaygh 6y ago
      > Well, there's a difference between passive and active investment... If the child of the wealthy person is bad with money, then having them actively invest that money is net harmful. And if the child of the wealthy person is not bad with money, having them actively invest that money ends up with dynasties. And we're back to the same double bind: to defend the wealth tax, you need to either a) justify dynasties or else b) explain why we should subtract from the salaries of employees at public sector companies in order to subsidize dividend payments/bond yields for one or two generations of destructive layabouts. (TBH there are reasonable arguments for family wealth and for allowing layabouts, but I don't think there's any way out of this bind. "oh don't worry, they'll piss away that money anyways" is a bad reason for not taxing someone.)

supernova87a 6y ago

You're arguing in a 0/1 fashion, where the tax itself is a matter of degree. There is a setpoint (or $ quantity vs. tax %) of this tax where the goals of helping your children are weighed against wealth-hoarding legacy family enrichment. It is most definitely a parameter that the government + people of a country should comment on.

notacoward 6y ago

You say "investing for their children". Somebody else might say "perpetuating the aristocracy". Same thing. Why do those children deserve any more investment than any other children? How does that contribute to a fair society, or even to a prosperous one?

MisterBastahrd 6y ago

This would be far more beneficial to the economy as a whole than the alternative, yes.