20 ms·

“ what can you possibly do that justifies making $100 MM a year?” That’s not up to you to decide in a free society. Market determines that.

count 5y ago
In the real world, the government, as a representative of society, is a part of the market. You're thinking of the spherical cow of economics.
- grapist420 5y ago
  you don’t want pharmaceutical plant workers and accountants voting on whether the company should invest in mRNA tech in 2013?
  - HWR_14 5y ago
    I honestly don't understand your comment. Are you saying they should have voted? Should not have? I have no idea what you are alluding to.
analognoise 5y ago
What a myth! That the markets are free. There are a lot of levers we can pull as a society, and we're pulling this one (finally). We create market conditions. It isn't some uncontrollable god we all have to live with.
mbesto 5y ago
> free society Free in what sense? Are you implying the US is a free market?
onlyrealcuzzo 5y ago
Really now? How come we decided long ago that if you made $100 MM a year, you got taxed 80% on your marginal income. At other times, we decided you get taxed below 20%. Sounds like the market doesn't decide, it's the politicians.
- ch4s3 5y ago
  Literally no one paid that rate in the US. During that period the government captured ~17-18% of GDP in taxes which is the post war average. There were a ton of tax breaks then, by today’s standards.
  - mbesto 5y ago
    > Literally no one paid that rate in the US. Literally they did. In 1944, the top rate peaked at 94 percent on taxable income over $200,000 ($2.5 million in today’s dollars3). That’s a high tax rate. Over the next three decades, the top federal income tax rate remained high, never dipping below 70 percent. https://bradfordtaxinstitute.com/Free_Resources/Federal-Income-Tax-Rates.aspx https://bradfordtaxinstitute.com/Free_Resources/Federal-Inco... Note the parent said "marginal" tax rate. > During that period the government captured ~17-18% of GDP in taxes which is the post war average. Even if the 17~18% of GDP is true (not saying it isn't, just dont have time to verify), it's very likely the highest tax bracket had way fewer people than it does today, so it would be equivalent of taxing earners of $100M/year in today's world. Weighing against GDP total negates increases in spending by the government to provide services that spur economies / provide benefits / etc. Point is - this figure is irrelevant and doesn't normalize the discussion.
    - ch4s3 5y ago
      No, no one really really did practically[1]. There are ways to capture more revenue, but it usually involves a VAT. Other methods historically cause economic contraction which lowers tax receipts. It’s important to be realistic about what policy can practically accomplish. [1] https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/ https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/
      - mbesto 5y ago
        Marginal tax != effective tax[0] Yes they literally did. Your article says exactly what I said: The 91 percent bracket of 1950 only applied to households with income over $200,000 (or about $2 million in today’s dollars). Only a small number of taxpayers would have had enough income to fall into the top bracket – fewer than 10,000 households, according to an article in The Wall Street Journal. Many households in the top 1 percent in the 1950s probably did not fall into the 91 percent bracket to begin with. You need to understand the difference between marginal tax and effective tax. What you're referring to is effective tax. The parent very explicitly said marginal tax. [0] - https://www.cbpp.org/research/federal-tax/marginal-and-average-tax-rates https://www.cbpp.org/research/federal-tax/marginal-and-avera...
hogFeast 5y ago
The person you replied to is conflating the economic and social side. The justification is in social not economic terms. So it really doesn't matter what the market says, the point is whether it is socially sustainable not to re-distribute that. As an aside, the US seems like a very weird place to me. There are homeless people everywhere. I have never seen so many homeless people anywhere in my life...even in developing countries. It is crazy. I don't understand how people tolerate that. Not only poor people but the US seems to be a country which breeds a total lack of empathy, I don't understand how wealthy people tolerate it...and then you read the hyperbolic comment elsewhere on this thread about a founder saying this is theft, this well end Silicon Valley, it is insanity, it is intolerable...try tolerating sleeping in a tent under a bridge. Either way, the reason you tax the $100m is so you don't end up with a govt that will take more than your money. The notion that you can just take forever has never been a part of politics. As an aside, I think most Americans perception of authoritarian govts is that they are anti-democratic in this way...but if you look at monarchies, there was always responsibility from the wealthy, there was always a safety valve...the US has no safety valve, there is no social responsibility from the wealthy, they have taken everything and are asking where the rest is (and sound utterly deranged when you suggest they should make $5m rather than $10m). There are things much worse than taxation, you have to live in the world with other people. EDIT: I will add...I would kind of quibble with the notion that markets are free in the US. The amount of state support for capitalists since 2008 (not talking about TARP which was necessary) has been very significant. Free money for the wealthy, usurious interest and rent for the poor. In particular, the level of downward social mobility in the US is very low for a capitalist economy. Markets are free in the US...in one sense.
- grapist420 5y ago
  > is whether it is socially sustainable not to re-distribute that “Bread and circuses” is derogatory, but the unsustainable parts of technological industrial society aren’t “rich people exist”. Conditions are so ridiculously prosperous and powerful for everyone that the new injustices are stuff like “my life expectancy is 70 instead of 80” and “I can’t afford to pay for debt I took”. What’s unsustainable? There are plenty of homeless, but there’s also lots of jobs. They may absolutely fucking suck, but in terms of buying power you’re not gonna die and can live quite materially well vs rural.
derefr 5y ago
Maybe if you manage to make $100 MM a year as a sole proprietor. On the other hand, if you're making $100 MM a year through corporations, then it's the corporation that the market values, not you personally; and corporations (and equities in them) are state-intermediated fictions. Corporations have no natural existence, or natural rights. They exist because governments say they do, they have cap tables because governments say they do, and they pay out dividends and have transferrable equity because governments say they do. They are government-drafted incentive structures to motivate productive labor, just like tax credits or mining rights or intellectual property are incentive structures to motivate productive labor. Or, to put that another way: corporations are de-facto nationalized; by default, the government is the actual direct creator of every corporation that exists in the country. When the person who asked the government for a corporate registration, receives 100% equity in the resulting corporation, that's a transfer of that equity from its original holder at time of creation, the government. The government isn't obligated to do that. It just does it because that's what makes people excited to work hard building corporations.
- aeternum 5y ago
  This is giving governments a lot of credit. Corporations are really just a set of contracts between investors, founders, employees, etc. Sure governments help enforce the terms of the contract and even set some ground-rules on what is/isn't allowed but the entire thing is built on mutual trust that everyone involved will follow the agreed-upon rules. History has not been kind to nations whose governments break those rules and started nationalizing corporations. Not too long ago, North Korea was the side with the industry, railroads, hydro-elec dams, steel mills and manufacturing plants.
  - derefr 5y ago
    My point is that the government is the one enabling contract law to exist, by making it enforceable. And so they get to say which contract terms are enforceable; and so they get to say which mutual agreements between private parties are iterated prisoners' dilemmas, and which are just ultimatum games. Securities are valuable assets for the same reason that greenbacks have value: because the state is standing there ensuring everyone's playing a fair game. If the state didn't punish counterfeiting, greenbacks would be worthless. If the state didn't punish non-dilutive duplicate share sales (i.e. selling the same whole pie to two people), securities would be worthless. As such, the state is creating the worth of those things, from nothing. Your effort into a corporation is additive, but the government's pre-invested effort into building the framework on which corporations rest is multiplicative, with the multiplier having started off, before that effort, at 0. Neither fiat money nor securities work in a lawless world. The government—that is, the People—get all the credit for making those things possible. Should they thus not get the reward? (Commodities do work in a lawless world, but not through tokens representing them. You'd have to bring those 10K bushels of wheat along with you if you want any credibility, which is pretty inefficient.) Let me put it this way: if we were starting with a form of socialism where corporations exist, and have founders and executives and boards of directors, but no shareholders, with the government instead earning all corporate profits (which it then spends on things like UBI); and then someone proposed a capitalist class that would earn some of those profits instead, taking them directly out of the UBI budget... would that proposal be justifiable through any particular argument to natural rights/freedoms? There might be a practical argument, in terms of a profit motive incentivizing entrepreneurship and investment, leading to a "rising tide"; but would there be an ethical argument in favor? > History has not been kind to nations whose governments break those rules and started nationalizing corporations. Not too long ago, North Korea was the side with the industry, railroads, hydro-elec dams, steel mills and manufacturing plants. North Korea isn't a particularly good example; their economic stall is a result of trade embargoes more than anything. (They're actually doing as well as could be expected, given that they're an isolated, non-globalized economy whose only trading partners are much larger globalized economies [China, Russia] who don't need anything NK could provide.) Meanwhile, China's own mostly-nationalized corporations do pretty well for themselves. Hell, even Canada has tons of Crown Corporations, and everyone here is begging our federal government to nationalize the cellular infrastructure (and then lease it out fairly) because it'd be much better than the current oligopoly situation we're in.
nimih 5y ago
It would seem that, as the writer and enforcer of regulation and other such things, it's the government that decides. In "free societies," perhaps that equates to democratic control, but again, that's clearly distinct from "the market."
TaylorAlexander 5y ago
Market and also the structure of corporations which allows a small number of people to collect all the profits generated by the many workers beneath them. We could, for example, alternatively have a free society where most firms are collectively owned and managed by their workers. Then no individual would be likely to earn $100m per year, but in such a firm you could see everyone become a millionaire.
- sbacic 5y ago
  Would your argument still stand if this hypothetical corporation had no employees but the owner? That is, do you take issue with the fact that one person, employing many, profits much more than the people he employees or that he profits much more than his fellow man on the street?
  - TaylorAlexander 5y ago
    Actually the idea of firms being cooperatives is only an approximation of my ideal. It is one step we can take which I believe would help. I do think that if the majority of firms in your society are top-down winner take all firms, you're going to end up with a top-down winner take all society and I think that's bad for society. In that sense I advocate that we move to more worker self-managed firms. The question of the self employed person making huge profits is another one. I advocate for a somewhat selfless mindset (beyond meeting basic needs for your well being and happiness). So if a single individual can make huge profits, that means it's costing the customers a lot of money. In my mind, a person making a lot of profit could save a lot of people money if they shared how they are solving these problems, and recruited others to help with the effort. So that might look like: make their project open source and help others join in the effort to make their solution more accessible. I see this as best for society. What then of the food and shelter this entrepreneur requires? As long as food and shelter are hard to come by, the entrepreneur will be incentivized to withhold their solution from society and keep charging high prices to ensure they meet their own needs. The solution I see is for society to provide for the needs of all. This can happen by ensuring that food and shelter are abundant. If we do that, we can see more developers and entrepreneurs willing to share what they know for the benefit of all. I believe that if executed well, this strategy can lead to a better and more innovative society than one in which every person is incentivized to withhold their knowledge from others. Going back to your original question - it's not that I take issue with a single business owner earning a high profit, it's that I think we can do better. Instead of a few earning high profits while others freeze to death on the street, we can provide food and shelter to all, eliminate material poverty, and do this all while innovating faster. But to do so, we must drop the self-centered individualist mindset and think about how to both look after ourselves while also looking after others. We must think as a community instead of atomized individuals.
grapist420 5y ago
ok and in an open democracy it’s not for you to decide that 55% taxes are too much. The public discourse determines that ;)
UncleMeat 5y ago
What if I do think that it is up to free society to decide that?
AlexandrB 5y ago
The modern market is propped up by laws that make things no one can naturally own, like words or code, into "property". Without these laws, programmers and their employers would not be collecting the same fat paycheques because all their output would be freely copyable without repercussions.

count 5y ago

In the real world, the government, as a representative of society, is a part of the market. You're thinking of the spherical cow of economics.

grapist420 5y ago
you don’t want pharmaceutical plant workers and accountants voting on whether the company should invest in mRNA tech in 2013?
- HWR_14 5y ago
  I honestly don't understand your comment. Are you saying they should have voted? Should not have? I have no idea what you are alluding to.

analognoise 5y ago

What a myth! That the markets are free. There are a lot of levers we can pull as a society, and we're pulling this one (finally). We create market conditions. It isn't some uncontrollable god we all have to live with.

mbesto 5y ago

> free society Free in what sense? Are you implying the US is a free market?

onlyrealcuzzo 5y ago

Really now? How come we decided long ago that if you made $100 MM a year, you got taxed 80% on your marginal income. At other times, we decided you get taxed below 20%. Sounds like the market doesn't decide, it's the politicians.

ch4s3 5y ago
Literally no one paid that rate in the US. During that period the government captured ~17-18% of GDP in taxes which is the post war average. There were a ton of tax breaks then, by today’s standards.
- mbesto 5y ago
  > Literally no one paid that rate in the US. Literally they did. In 1944, the top rate peaked at 94 percent on taxable income over $200,000 ($2.5 million in today’s dollars3). That’s a high tax rate. Over the next three decades, the top federal income tax rate remained high, never dipping below 70 percent. https://bradfordtaxinstitute.com/Free_Resources/Federal-Income-Tax-Rates.aspx https://bradfordtaxinstitute.com/Free_Resources/Federal-Inco... Note the parent said "marginal" tax rate. > During that period the government captured ~17-18% of GDP in taxes which is the post war average. Even if the 17~18% of GDP is true (not saying it isn't, just dont have time to verify), it's very likely the highest tax bracket had way fewer people than it does today, so it would be equivalent of taxing earners of $100M/year in today's world. Weighing against GDP total negates increases in spending by the government to provide services that spur economies / provide benefits / etc. Point is - this figure is irrelevant and doesn't normalize the discussion.
  - ch4s3 5y ago
    No, no one really really did practically[1]. There are ways to capture more revenue, but it usually involves a VAT. Other methods historically cause economic contraction which lowers tax receipts. It’s important to be realistic about what policy can practically accomplish. [1] https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/ https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/
    - mbesto 5y ago
      Marginal tax != effective tax[0] Yes they literally did. Your article says exactly what I said: The 91 percent bracket of 1950 only applied to households with income over $200,000 (or about $2 million in today’s dollars). Only a small number of taxpayers would have had enough income to fall into the top bracket – fewer than 10,000 households, according to an article in The Wall Street Journal. Many households in the top 1 percent in the 1950s probably did not fall into the 91 percent bracket to begin with. You need to understand the difference between marginal tax and effective tax. What you're referring to is effective tax. The parent very explicitly said marginal tax. [0] - https://www.cbpp.org/research/federal-tax/marginal-and-average-tax-rates https://www.cbpp.org/research/federal-tax/marginal-and-avera...

hogFeast 5y ago

The person you replied to is conflating the economic and social side. The justification is in social not economic terms. So it really doesn't matter what the market says, the point is whether it is socially sustainable not to re-distribute that. As an aside, the US seems like a very weird place to me. There are homeless people everywhere. I have never seen so many homeless people anywhere in my life...even in developing countries. It is crazy. I don't understand how people tolerate that. Not only poor people but the US seems to be a country which breeds a total lack of empathy, I don't understand how wealthy people tolerate it...and then you read the hyperbolic comment elsewhere on this thread about a founder saying this is theft, this well end Silicon Valley, it is insanity, it is intolerable...try tolerating sleeping in a tent under a bridge. Either way, the reason you tax the $100m is so you don't end up with a govt that will take more than your money. The notion that you can just take forever has never been a part of politics. As an aside, I think most Americans perception of authoritarian govts is that they are anti-democratic in this way...but if you look at monarchies, there was always responsibility from the wealthy, there was always a safety valve...the US has no safety valve, there is no social responsibility from the wealthy, they have taken everything and are asking where the rest is (and sound utterly deranged when you suggest they should make $5m rather than $10m). There are things much worse than taxation, you have to live in the world with other people. EDIT: I will add...I would kind of quibble with the notion that markets are free in the US. The amount of state support for capitalists since 2008 (not talking about TARP which was necessary) has been very significant. Free money for the wealthy, usurious interest and rent for the poor. In particular, the level of downward social mobility in the US is very low for a capitalist economy. Markets are free in the US...in one sense.

grapist420 5y ago
> is whether it is socially sustainable not to re-distribute that “Bread and circuses” is derogatory, but the unsustainable parts of technological industrial society aren’t “rich people exist”. Conditions are so ridiculously prosperous and powerful for everyone that the new injustices are stuff like “my life expectancy is 70 instead of 80” and “I can’t afford to pay for debt I took”. What’s unsustainable? There are plenty of homeless, but there’s also lots of jobs. They may absolutely fucking suck, but in terms of buying power you’re not gonna die and can live quite materially well vs rural.

derefr 5y ago

Maybe if you manage to make $100 MM a year as a sole proprietor. On the other hand, if you're making $100 MM a year through corporations, then it's the corporation that the market values, not you personally; and corporations (and equities in them) are state-intermediated fictions. Corporations have no natural existence, or natural rights. They exist because governments say they do, they have cap tables because governments say they do, and they pay out dividends and have transferrable equity because governments say they do. They are government-drafted incentive structures to motivate productive labor, just like tax credits or mining rights or intellectual property are incentive structures to motivate productive labor. Or, to put that another way: corporations are de-facto nationalized; by default, the government is the actual direct creator of every corporation that exists in the country. When the person who asked the government for a corporate registration, receives 100% equity in the resulting corporation, that's a transfer of that equity from its original holder at time of creation, the government. The government isn't obligated to do that. It just does it because that's what makes people excited to work hard building corporations.

aeternum 5y ago
This is giving governments a lot of credit. Corporations are really just a set of contracts between investors, founders, employees, etc. Sure governments help enforce the terms of the contract and even set some ground-rules on what is/isn't allowed but the entire thing is built on mutual trust that everyone involved will follow the agreed-upon rules. History has not been kind to nations whose governments break those rules and started nationalizing corporations. Not too long ago, North Korea was the side with the industry, railroads, hydro-elec dams, steel mills and manufacturing plants.
- derefr 5y ago
  My point is that the government is the one enabling contract law to exist, by making it enforceable. And so they get to say which contract terms are enforceable; and so they get to say which mutual agreements between private parties are iterated prisoners' dilemmas, and which are just ultimatum games. Securities are valuable assets for the same reason that greenbacks have value: because the state is standing there ensuring everyone's playing a fair game. If the state didn't punish counterfeiting, greenbacks would be worthless. If the state didn't punish non-dilutive duplicate share sales (i.e. selling the same whole pie to two people), securities would be worthless. As such, the state is creating the worth of those things, from nothing. Your effort into a corporation is additive, but the government's pre-invested effort into building the framework on which corporations rest is multiplicative, with the multiplier having started off, before that effort, at 0. Neither fiat money nor securities work in a lawless world. The government—that is, the People—get all the credit for making those things possible. Should they thus not get the reward? (Commodities do work in a lawless world, but not through tokens representing them. You'd have to bring those 10K bushels of wheat along with you if you want any credibility, which is pretty inefficient.) Let me put it this way: if we were starting with a form of socialism where corporations exist, and have founders and executives and boards of directors, but no shareholders, with the government instead earning all corporate profits (which it then spends on things like UBI); and then someone proposed a capitalist class that would earn some of those profits instead, taking them directly out of the UBI budget... would that proposal be justifiable through any particular argument to natural rights/freedoms? There might be a practical argument, in terms of a profit motive incentivizing entrepreneurship and investment, leading to a "rising tide"; but would there be an ethical argument in favor? > History has not been kind to nations whose governments break those rules and started nationalizing corporations. Not too long ago, North Korea was the side with the industry, railroads, hydro-elec dams, steel mills and manufacturing plants. North Korea isn't a particularly good example; their economic stall is a result of trade embargoes more than anything. (They're actually doing as well as could be expected, given that they're an isolated, non-globalized economy whose only trading partners are much larger globalized economies [China, Russia] who don't need anything NK could provide.) Meanwhile, China's own mostly-nationalized corporations do pretty well for themselves. Hell, even Canada has tons of Crown Corporations, and everyone here is begging our federal government to nationalize the cellular infrastructure (and then lease it out fairly) because it'd be much better than the current oligopoly situation we're in.

nimih 5y ago

It would seem that, as the writer and enforcer of regulation and other such things, it's the government that decides. In "free societies," perhaps that equates to democratic control, but again, that's clearly distinct from "the market."

TaylorAlexander 5y ago

Market and also the structure of corporations which allows a small number of people to collect all the profits generated by the many workers beneath them. We could, for example, alternatively have a free society where most firms are collectively owned and managed by their workers. Then no individual would be likely to earn $100m per year, but in such a firm you could see everyone become a millionaire.

sbacic 5y ago
Would your argument still stand if this hypothetical corporation had no employees but the owner? That is, do you take issue with the fact that one person, employing many, profits much more than the people he employees or that he profits much more than his fellow man on the street?
- TaylorAlexander 5y ago
  Actually the idea of firms being cooperatives is only an approximation of my ideal. It is one step we can take which I believe would help. I do think that if the majority of firms in your society are top-down winner take all firms, you're going to end up with a top-down winner take all society and I think that's bad for society. In that sense I advocate that we move to more worker self-managed firms. The question of the self employed person making huge profits is another one. I advocate for a somewhat selfless mindset (beyond meeting basic needs for your well being and happiness). So if a single individual can make huge profits, that means it's costing the customers a lot of money. In my mind, a person making a lot of profit could save a lot of people money if they shared how they are solving these problems, and recruited others to help with the effort. So that might look like: make their project open source and help others join in the effort to make their solution more accessible. I see this as best for society. What then of the food and shelter this entrepreneur requires? As long as food and shelter are hard to come by, the entrepreneur will be incentivized to withhold their solution from society and keep charging high prices to ensure they meet their own needs. The solution I see is for society to provide for the needs of all. This can happen by ensuring that food and shelter are abundant. If we do that, we can see more developers and entrepreneurs willing to share what they know for the benefit of all. I believe that if executed well, this strategy can lead to a better and more innovative society than one in which every person is incentivized to withhold their knowledge from others. Going back to your original question - it's not that I take issue with a single business owner earning a high profit, it's that I think we can do better. Instead of a few earning high profits while others freeze to death on the street, we can provide food and shelter to all, eliminate material poverty, and do this all while innovating faster. But to do so, we must drop the self-centered individualist mindset and think about how to both look after ourselves while also looking after others. We must think as a community instead of atomized individuals.

grapist420 5y ago

ok and in an open democracy it’s not for you to decide that 55% taxes are too much. The public discourse determines that ;)

UncleMeat 5y ago

What if I do think that it is up to free society to decide that?

AlexandrB 5y ago

The modern market is propped up by laws that make things no one can naturally own, like words or code, into "property". Without these laws, programmers and their employers would not be collecting the same fat paycheques because all their output would be freely copyable without repercussions.