6 ms·

genius. who needs voluntary transactions live venture capital or angels, what have they ever done? instead lets take money from everyone (if they don't like it

genius. who needs voluntary transactions live venture capital or angels, what have they ever done? instead lets take money from everyone (if they don't like it we can lock them in a cage) and then give it to others who we decide are worthy.

yellowbkpk 15y ago
Outside of Silicon Valley (and a few other hot spots maybe) "voluntary transactions" aren't happening, so the government feels the need to step in.
- anamax 15y ago
  Yes, govt feels the need to step in. The relevant question is whether said "step in" makes any sense. If there really are such wonderful opportunities, why aren't you funding them?
  - ori_b 15y ago
    I don't have enough cash on hand.
    - sneak 15y ago
      Interestingly enough, neither does the US government.
      - natnat 15y ago
        The government can borrow money at negative interest rates. People are literally paying the U.S. government to take their money. It may have a large budget deficit, but the government has no shortage of cash.
        anamax 15y ago
        > The government can borrow money at negative interest rates. The feds are borrowing at less than the rate of inflation, but they're not borrowing at negative rates. Note that current interest rates don't accurately reflect the interest cost of borrowing because those loans will be rolled over a couple of times. Do you really think that the low interest rates will continue? More to the point, said borrowing has to be repaid. If the expected/likely additional tax revenue from this program is less than the amount spent, it's a bad deal.
- castewart 15y ago
  That's not true at all. SBA and SCORE offices help entrepreneurs all over the US get outside funding. Silicon Valley may have the largest numbers, but it doesn't mean the rest of the country isn't investing...
- nirvana 15y ago
  I think it is a salient point that one of the reasons these "voluntary transactions" are not happening in the rest of the country is because the government has already stepped in. I would be an angel investor, if the SEC would let me. It is silly that I could blow $20k on a bad stock investment, but can't put it into a tiny startup. The regulatory burden and the prohibition on "non accredited investors" quells a lot of support the entreprenurial community could use. Interestingly, you sometimes read stories about immigrants who came to the USA, built small businesses, and then helped later immigrants with investments and loans... resulting in thriving communities (the korean grocer community in LA is an example I heard about.) They wouldn't have been able to do this if they had been following SEC rules!
  - muhfuhkuh 15y ago
    "The regulatory burden and the prohibition on "non accredited investors" quells a lot of support the entreprenurial community could use." So, "friends and family" start-up money is illegal? When did that happen?
    - nirvana 15y ago
      I didn't say they were illegal, I said there was a regulatory burden and prohibition: "If, however, not all of the investors are accredited, founders will need to provide a lot more disclosure to the investors, including a full-blown private placement memorandum, risk factors and financial statements. Also, note that all non-accredited investors in a Rule 506 offering must be sophisticated, which means that the company must reasonably believe that non-accredited investors (either alone or together with their investment representatives) have sufficient financial and business knowledge to allow them to evaluate the risks and merits of an investment." Its prohibited to take investments from non-accreddited investors in the straightforward manner you can from accredited investors, and if you do, you have a greater burden, and additional risk to bear.
  - nkassis 15y ago
    One of the cool thing about this job bill is crowdfunding might be now legal. It could be cool to be allow to put under 100 bucks to fund a startup idea. You could spread that 20k around.
cheez 15y ago
I don't know why people downvote this. There are two problems when you have a democratic system of government (the US is no longer really a republic IMO): 1. Special interest groups 2. Involuntary taxation The two combined make for some quite uncomfortable moral hazards. If you pay taxes in the US, you are paying for continued aggression. Or education you'd rather provide yourself. Or any number of things that you don't agree with. For every citizen, there are just a few government services they use over and above the common services everyone else uses as well (not listing them, numerous). The majority of money that the government collects from the citizen is not spent on the citizen themselves. "Sure", you say, "It's to help the poor!". As Milton Friedman said: if government could solve the problem of poverty, then why are there still poor people? In my locality, there are instances of local governments spending $60K per poor family of four annually. Only $20K actually got to the family. The rest becomes overhead. I think it's quite valid to say that the government should not be involving themselves in commerce in this manner because then they become indispensable. Not because they are useful, but because then they fund a set of uneconomical businesses that no one else would invest in. TL;DR: don't downvote because you don't agree.
- krschultz 15y ago
  I downvoted it because it was a horribly written political cheapshot. I don't necessarily disagree with the sentiment but the quality of the post was terrible. Politics doesn't really belong on HN anyway so if you are going to inject it into a discussion it has to be intelligent (ignoring my snarky response to him that will likely garner downvotes as well).
  - cheez 15y ago
    Obama's aid plan etc etc -> not politics? I agree, keep politics off HN.
krschultz 15y ago
Other option for people who don't like it: leave the country. You wouldn't know it listening to most people complaining but unemployment insurance was not something implemented in 2008, it goes back to the 1930s. That should have been plenty of warning for you to find a place with a tax rate and entitlement system to your liking. Sorry, there aren't a lot of options in the 1st world without taxes and entitlments, but that must just be a coincidence.
- srdev 15y ago
  I'm conflicted on the idea of leaving the country as a solution. Its not enough to simply live and work in another country -- you're still liable for taxes. You have to fully expatriate and renounce your citizenship. This is often very difficult and time-consuming to do, and near-impossible if you're not in a skilled line of work.
  - splat 15y ago
    Even if you do, your total assets are taxed. If you're rich enough, you'll lose ~35% of what you have if you decide to expatriate.
    - srdev 15y ago
      Ah, I was using the term incorrectly. I meant that one must renounce their citizenship in their birth country to be completely free of taxation. Expatriation can be hard. Renouncing birth citizenship extremely difficult if not impossible in some situations (catch-22s, etc)
      - nirvana 15y ago
        For US citizens, to renounce you need to prove that you've paid all income taxes over the previous 5 years, pay an excise taxes on all assets being taken out of the country (which I think is %1-2%) and -- here's the kicker-- get permission of the federal government to be allowed to renounce your citizenship. If they think your earning power is significant enough, they can deny you by claiming your "renouncing to avoid taxes". However, if you live outside the USA full time, I believe that the personal exemption on income is around $80,000. So even if you're making millions, if you pay yourself $80k or less, you can avoid income taxes in the US on your worldwide income. Thus, holding stock in a startup that is appreciating avoids taxation, however, if you ever sell that stock, then you'd be realizing the gain and run into the issue. PS - of course you're right that some countries simply won't allow you to renounce, and that might even end up being the case for some US citizens. I'm just giving the information I've been able to gather on this topic, not really disagreeing with you.
jbooth 15y ago
Did you read the article? The gyst of it is that if you are receiving unemployment insurance, you no longer forfeit it by starting work on a pre-revenue startup. Previously, you would have been "self employed" and lost access to your unemployment. I'll further note that this bill, as far as I know, does not make venture capital illegal.
bermanoid 15y ago
Compared to all the thousands of ways in which the government tends to find to waste taxpayer money with near-zero chance of it helping anybody, I just can't seem to be so offended by this one. If you hate the idea of taxation or stimulus, that's fine, you're certainly not alone, and I'd even agree with a lot of your arguments. But do you really think this is such a poor attempt at it, compared to the other things governments tend to try? As far as I can tell, this is aimed at allowing people that would have been on the dole anyways to spend their time doing something productive in an entrepreneurial capacity rather than sitting on their asses and deliberately not working so that they don't lose unemployment benefits. Personally, I'd take even a half-baked attempt at spurring entrepreneurialism over monetary fiddling, another round of tax cuts for the rich, or a $50 check in the mail, any day of the week. At least this has a small chance of incentivizing innovation, which is known to help the economy in the long term, as opposed to most of the other options which mostly rely on wishful thinking...

yellowbkpk 15y ago

Outside of Silicon Valley (and a few other hot spots maybe) "voluntary transactions" aren't happening, so the government feels the need to step in.

anamax 15y ago
Yes, govt feels the need to step in. The relevant question is whether said "step in" makes any sense. If there really are such wonderful opportunities, why aren't you funding them?
- ori_b 15y ago
  I don't have enough cash on hand.
  - sneak 15y ago
    Interestingly enough, neither does the US government.
    - natnat 15y ago
      The government can borrow money at negative interest rates. People are literally paying the U.S. government to take their money. It may have a large budget deficit, but the government has no shortage of cash.
      - anamax 15y ago
        > The government can borrow money at negative interest rates. The feds are borrowing at less than the rate of inflation, but they're not borrowing at negative rates. Note that current interest rates don't accurately reflect the interest cost of borrowing because those loans will be rolled over a couple of times. Do you really think that the low interest rates will continue? More to the point, said borrowing has to be repaid. If the expected/likely additional tax revenue from this program is less than the amount spent, it's a bad deal.
castewart 15y ago
That's not true at all. SBA and SCORE offices help entrepreneurs all over the US get outside funding. Silicon Valley may have the largest numbers, but it doesn't mean the rest of the country isn't investing...
nirvana 15y ago
I think it is a salient point that one of the reasons these "voluntary transactions" are not happening in the rest of the country is because the government has already stepped in. I would be an angel investor, if the SEC would let me. It is silly that I could blow $20k on a bad stock investment, but can't put it into a tiny startup. The regulatory burden and the prohibition on "non accredited investors" quells a lot of support the entreprenurial community could use. Interestingly, you sometimes read stories about immigrants who came to the USA, built small businesses, and then helped later immigrants with investments and loans... resulting in thriving communities (the korean grocer community in LA is an example I heard about.) They wouldn't have been able to do this if they had been following SEC rules!
- muhfuhkuh 15y ago
  "The regulatory burden and the prohibition on "non accredited investors" quells a lot of support the entreprenurial community could use." So, "friends and family" start-up money is illegal? When did that happen?
  - nirvana 15y ago
    I didn't say they were illegal, I said there was a regulatory burden and prohibition: "If, however, not all of the investors are accredited, founders will need to provide a lot more disclosure to the investors, including a full-blown private placement memorandum, risk factors and financial statements. Also, note that all non-accredited investors in a Rule 506 offering must be sophisticated, which means that the company must reasonably believe that non-accredited investors (either alone or together with their investment representatives) have sufficient financial and business knowledge to allow them to evaluate the risks and merits of an investment." Its prohibited to take investments from non-accreddited investors in the straightforward manner you can from accredited investors, and if you do, you have a greater burden, and additional risk to bear.
- nkassis 15y ago
  One of the cool thing about this job bill is crowdfunding might be now legal. It could be cool to be allow to put under 100 bucks to fund a startup idea. You could spread that 20k around.

cheez 15y ago

I don't know why people downvote this. There are two problems when you have a democratic system of government (the US is no longer really a republic IMO): 1. Special interest groups 2. Involuntary taxation The two combined make for some quite uncomfortable moral hazards. If you pay taxes in the US, you are paying for continued aggression. Or education you'd rather provide yourself. Or any number of things that you don't agree with. For every citizen, there are just a few government services they use over and above the common services everyone else uses as well (not listing them, numerous). The majority of money that the government collects from the citizen is not spent on the citizen themselves. "Sure", you say, "It's to help the poor!". As Milton Friedman said: if government could solve the problem of poverty, then why are there still poor people? In my locality, there are instances of local governments spending $60K per poor family of four annually. Only $20K actually got to the family. The rest becomes overhead. I think it's quite valid to say that the government should not be involving themselves in commerce in this manner because then they become indispensable. Not because they are useful, but because then they fund a set of uneconomical businesses that no one else would invest in. TL;DR: don't downvote because you don't agree.

krschultz 15y ago
I downvoted it because it was a horribly written political cheapshot. I don't necessarily disagree with the sentiment but the quality of the post was terrible. Politics doesn't really belong on HN anyway so if you are going to inject it into a discussion it has to be intelligent (ignoring my snarky response to him that will likely garner downvotes as well).
- cheez 15y ago
  Obama's aid plan etc etc -> not politics? I agree, keep politics off HN.

krschultz 15y ago

Other option for people who don't like it: leave the country. You wouldn't know it listening to most people complaining but unemployment insurance was not something implemented in 2008, it goes back to the 1930s. That should have been plenty of warning for you to find a place with a tax rate and entitlement system to your liking. Sorry, there aren't a lot of options in the 1st world without taxes and entitlments, but that must just be a coincidence.

srdev 15y ago
I'm conflicted on the idea of leaving the country as a solution. Its not enough to simply live and work in another country -- you're still liable for taxes. You have to fully expatriate and renounce your citizenship. This is often very difficult and time-consuming to do, and near-impossible if you're not in a skilled line of work.
- splat 15y ago
  Even if you do, your total assets are taxed. If you're rich enough, you'll lose ~35% of what you have if you decide to expatriate.
  - srdev 15y ago
    Ah, I was using the term incorrectly. I meant that one must renounce their citizenship in their birth country to be completely free of taxation. Expatriation can be hard. Renouncing birth citizenship extremely difficult if not impossible in some situations (catch-22s, etc)
    - nirvana 15y ago
      For US citizens, to renounce you need to prove that you've paid all income taxes over the previous 5 years, pay an excise taxes on all assets being taken out of the country (which I think is %1-2%) and -- here's the kicker-- get permission of the federal government to be allowed to renounce your citizenship. If they think your earning power is significant enough, they can deny you by claiming your "renouncing to avoid taxes". However, if you live outside the USA full time, I believe that the personal exemption on income is around $80,000. So even if you're making millions, if you pay yourself $80k or less, you can avoid income taxes in the US on your worldwide income. Thus, holding stock in a startup that is appreciating avoids taxation, however, if you ever sell that stock, then you'd be realizing the gain and run into the issue. PS - of course you're right that some countries simply won't allow you to renounce, and that might even end up being the case for some US citizens. I'm just giving the information I've been able to gather on this topic, not really disagreeing with you.

jbooth 15y ago

Did you read the article? The gyst of it is that if you are receiving unemployment insurance, you no longer forfeit it by starting work on a pre-revenue startup. Previously, you would have been "self employed" and lost access to your unemployment. I'll further note that this bill, as far as I know, does not make venture capital illegal.

bermanoid 15y ago

Compared to all the thousands of ways in which the government tends to find to waste taxpayer money with near-zero chance of it helping anybody, I just can't seem to be so offended by this one. If you hate the idea of taxation or stimulus, that's fine, you're certainly not alone, and I'd even agree with a lot of your arguments. But do you really think this is such a poor attempt at it, compared to the other things governments tend to try? As far as I can tell, this is aimed at allowing people that would have been on the dole anyways to spend their time doing something productive in an entrepreneurial capacity rather than sitting on their asses and deliberately not working so that they don't lose unemployment benefits. Personally, I'd take even a half-baked attempt at spurring entrepreneurialism over monetary fiddling, another round of tax cuts for the rich, or a $50 check in the mail, any day of the week. At least this has a small chance of incentivizing innovation, which is known to help the economy in the long term, as opposed to most of the other options which mostly rely on wishful thinking...