3 ms·

"efficient allocation of resources" doesn't mean "the guy who owns popular companies gets unimaginable wealth". Obviously what constitutes efficient is subjecti

"efficient allocation of resources" doesn't mean "the guy who owns popular companies gets unimaginable wealth". Obviously what constitutes efficient is subjective, but I can't see how this kind of allocation is good for the world. > Imagine seizing his assets and distributing it to the people via a wealth tax How would a wealth tax seize his assets?

spiralx 6y ago
A wealth tax wouldn't seize assets, but given that Musk's "wealth" is almost entirely his shares in Tesla, SpaceX, etc., how would he pay a 5% tax on his total wealth without liquidating a bunch of Tesla shares? His physical assets are unlikely to be worth $10bn.
- perl4ever 6y ago
  Governments and public entities can own shares in corporations, so a tax could be paid in kind.
  - spiralx 6y ago
    That's definitely better for the share price, but what does the government do with those shares? Again it's paper wealth apart from maybe some small amount of dividends generated. And having the US Government "seizing the means of production" - and that's how it would be spun - is a great way to turn people against it! A wealth tax is most likely unconstitutional anyway, the same way income tax was before the Sixteenth Amendment.
    - perl4ever 6y ago
      I'm not really arguing whether it's a good or bad idea. It's just that, as far as I know, it's the norm in our society and others so it's odd if someone wants to debate it as a hypothetical that people might turn against. Look at Fannie Mae and Freddie Mac for an example of taking more than a sliver. https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae... I'm not sure of the difference between a "wealth tax" and a "property tax". Are you saying the sort of property tax homeowners pay in a lot of places would be unconstitutional at a Federal level? Or are you saying it's unconstitutional at any level?
      - spiralx 6y ago
        A property tax is a wealth tax yes, and as you say it would be unconstitutional at the federal level, but they're enacted at the state or municipal level which is legal. At least that's the obvious position and the fact that the federal income tax required an Amendment supports that. https://nymag.com/intelligencer/2019/02/constitutional-concerns-are-a-major-risk-for-a-wealth-tax.html https://nymag.com/intelligencer/2019/02/constitutional-conce... The federal takeover of a government-created corporation in a financial crisis to prevent it collapsing isn't really a good comparison to an ongoing process of "taking" large chunks of successful companies because their owners are required to pay taxes. And there is criticism of that control now, even if people accepted those actions were required at the time: https://www.nytimes.com/2016/11/15/business/dealbook/fannie-and-freddies-status-continues-to-provoke-criticisms.html https://www.nytimes.com/2016/11/15/business/dealbook/fannie-...
        perl4ever 6y ago
        A lot of people want to get the government out of Fannie Mae and Freddie Mac, and I'm no expert, but I think they are obviously wrong. You have a systemically important entity that has to have a government guarantee, then it has to answer to the government as at least a 51% shareholder and have restrictions on distributing profits. It seems obvious and simple and correct to me, not some sort of temporary aberration.

spiralx 6y ago

A wealth tax wouldn't seize assets, but given that Musk's "wealth" is almost entirely his shares in Tesla, SpaceX, etc., how would he pay a 5% tax on his total wealth without liquidating a bunch of Tesla shares? His physical assets are unlikely to be worth $10bn.

perl4ever 6y ago
Governments and public entities can own shares in corporations, so a tax could be paid in kind.
- spiralx 6y ago
  That's definitely better for the share price, but what does the government do with those shares? Again it's paper wealth apart from maybe some small amount of dividends generated. And having the US Government "seizing the means of production" - and that's how it would be spun - is a great way to turn people against it! A wealth tax is most likely unconstitutional anyway, the same way income tax was before the Sixteenth Amendment.
  - perl4ever 6y ago
    I'm not really arguing whether it's a good or bad idea. It's just that, as far as I know, it's the norm in our society and others so it's odd if someone wants to debate it as a hypothetical that people might turn against. Look at Fannie Mae and Freddie Mac for an example of taking more than a sliver. https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae... I'm not sure of the difference between a "wealth tax" and a "property tax". Are you saying the sort of property tax homeowners pay in a lot of places would be unconstitutional at a Federal level? Or are you saying it's unconstitutional at any level?
    - spiralx 6y ago
      A property tax is a wealth tax yes, and as you say it would be unconstitutional at the federal level, but they're enacted at the state or municipal level which is legal. At least that's the obvious position and the fact that the federal income tax required an Amendment supports that. https://nymag.com/intelligencer/2019/02/constitutional-concerns-are-a-major-risk-for-a-wealth-tax.html https://nymag.com/intelligencer/2019/02/constitutional-conce... The federal takeover of a government-created corporation in a financial crisis to prevent it collapsing isn't really a good comparison to an ongoing process of "taking" large chunks of successful companies because their owners are required to pay taxes. And there is criticism of that control now, even if people accepted those actions were required at the time: https://www.nytimes.com/2016/11/15/business/dealbook/fannie-and-freddies-status-continues-to-provoke-criticisms.html https://www.nytimes.com/2016/11/15/business/dealbook/fannie-...
      - perl4ever 6y ago
        A lot of people want to get the government out of Fannie Mae and Freddie Mac, and I'm no expert, but I think they are obviously wrong. You have a systemically important entity that has to have a government guarantee, then it has to answer to the government as at least a 51% shareholder and have restrictions on distributing profits. It seems obvious and simple and correct to me, not some sort of temporary aberration.