4 ms·

Taking (a part of) someone’s property is a tax. Deciding that you will do that to companies above a certain size is a tax on getting big, a discouragement to do

Taking (a part of) someone’s property is a tax. Deciding that you will do that to companies above a certain size is a tax on getting big, a discouragement to do so. Security of property rights is a pretty compelling public interest. Keeping a particular company going is not on remotely on the same order. The fiduciary duty is a red herring. If you want to destroy your own property you can. If you make poor decisions about your own property that’s on you. Public companies are actively traded. If you don’t like management sell the shares. There are an uncountable number of ways that management can mess up. Why mess with property rights for one particular small class of ways companies can be messed up? If there is an argument for taking someone’s property upon their death and give it to other people because they are co-owners of a company please make it.

jedberg 5y ago
You talk about a red herring and then say this: > Deciding that you will do that to companies above a certain size is a tax on getting big, a discouragement to do so. That's the biggest lie of all. High taxes has never discouraged someone from starting or growing a company. No one ever says, "gee I have a great idea but I don't want to pay a lot of tax on my windfall earnings so I just won't bother". But if you're so worried about discouraging growth, then fine. Make it apply to the death of any shareholder -- upon death the board gets to say where the voting rights of the shares go. Let the owner will the value of the shares to whomever they want, but let the board decide where the voting power goes.
- barry-cotter 5y ago
  > That's the biggest lie of all. High taxes has never discouraged someone from starting or growing a company. No one ever says, "gee I have a great idea but I don't want to pay a lot of tax on my windfall earnings so I just won't bother". This is not consistent with my model of human behavior. Some indicative evidence pointing to people caring about tax rates would be the skill bias of migration from the EU to the US, the gap in GDP per capita between Switzerland and its neighbors or how US natives are much less likely to go into STEM fields than immigrants. People do actually respond to incentives. > But if you're so worried about discouraging growth, then fine. Make it apply to the death of any shareholder -- upon death the board gets to say where the voting rights of the shares go. Let the owner will the value of the shares to whomever they want, but let the board decide where the voting power goes. This has an obvious failure mode. The people on the board deciding on who gets to vote for the board is just institutionalizing corruption. Once the board gets to decide who is on the board without outside input the process is complete.
  - actually_a_dog 5y ago
    Your model is wrong or incomplete, then. Corporate taxes were at 40+% during the 1950s, which was one of the most prosperous periods in American history. [0] During that same period, the top marginal bracket for individuals exceeded 80%. [1] Nobody says “oh, I’m just not going to bother making a lot of money” just because they face a high tax rate. —— [0]: https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_St... [1]: https://www.taxpolicycenter.org/statistics/historical-highest-marginal-income-tax-rates https://www.taxpolicycenter.org/statistics/historical-highes...
    - barry-cotter 5y ago
      Incomplete. It’s not that difficult to be prosperous when you’re the only developed country that didn’t get bombed. As far as income taxes go you’re not completely wrong but if your firm can expense your car, lunch, dinner, rent for executive’s homes and children’s school fees you can have a great deal higher consumption inequality than inequality of earnings. Tax treatment has changed enormously since the 1950s in the US[1]. Also, really, nobody? I’m not claiming everyone responds in the same way, just that if you make things less attractive fewer people will do them. Think on the margin. Does increasing taxes on a thing mean no one will do sit? No. But fewer will. [1] See https://news.ycombinator.com/item?id=2979882 https://news.ycombinator.com/item?id=2979882 > Back in the 1950s, the rich were really good at tax avoidance. All they had to do was to donate more than their total income to charity. (The so-called flying nun tax exemption.) This was doable because when you donated items that appreciated in value, you didn't get taxed on the increase in value, but got to claim the whole value. So if your parents had bought a lot of art, you could donate the art. Better yet you could donate a million dollars to a charitable foundation you had, have them use it to buy a piece of art from you, and then donate 4 other pieces of art which are now valued at $1 million each. The result was a huge run-up in the value of things like art, and a simultaneous increase in public art for display. When you visit the Metropolitan Museum, you're basically seeing the benefits of a tax dodge.
- JackFr 5y ago
  > Let the owner will the value of the shares to whomever they want, but let the board decide where the voting power goes. That is terrible idea on so many levels it’s difficult to address them all. What is the value of the shares with no voting rights? And given your plan, I assume most boards would award the shares to themselves.
  - jedberg 5y ago
    > What is the value of the shares with no voting rights? I don't know, Google and BRK-B have no voting rights yet are quite valuable. The company still has assets of value. The value isn't entirely in the vote.
sputr 5y ago
"Security of property rights is a pretty compelling public interes." Is it really? You seem to be saying that public property is sacred. If that is true its the only thing ever. Everything else has "within reason" attached to it, why not property rights.
- barry-cotter 5y ago
  I’m not saying public property is sacred. I’m not saying private property is sacred either. But security of private property is a big deal and shouldn’t be messed with for reasons that are too incoherent to be called an argument. Far better to increase the corporate tax rate than to just take people’s stuff. We can adjust the tax rate up and down. The government messing with property rights is a lot more durable. You can destroy a lot of trust very quickly and it takes a long time to build it up again.
- JonChesterfield 5y ago
  Property rights are the foundation of our society. If your stuff can be summarily taken off you without consequence (branded 'haircut', 'nationalise','theft' etc) then you are strongly disincentivised to accumulate stuff. Capitalism folds and those who want better quality of life go elsewhere.

jedberg 5y ago

You talk about a red herring and then say this: > Deciding that you will do that to companies above a certain size is a tax on getting big, a discouragement to do so. That's the biggest lie of all. High taxes has never discouraged someone from starting or growing a company. No one ever says, "gee I have a great idea but I don't want to pay a lot of tax on my windfall earnings so I just won't bother". But if you're so worried about discouraging growth, then fine. Make it apply to the death of any shareholder -- upon death the board gets to say where the voting rights of the shares go. Let the owner will the value of the shares to whomever they want, but let the board decide where the voting power goes.

barry-cotter 5y ago
> That's the biggest lie of all. High taxes has never discouraged someone from starting or growing a company. No one ever says, "gee I have a great idea but I don't want to pay a lot of tax on my windfall earnings so I just won't bother". This is not consistent with my model of human behavior. Some indicative evidence pointing to people caring about tax rates would be the skill bias of migration from the EU to the US, the gap in GDP per capita between Switzerland and its neighbors or how US natives are much less likely to go into STEM fields than immigrants. People do actually respond to incentives. > But if you're so worried about discouraging growth, then fine. Make it apply to the death of any shareholder -- upon death the board gets to say where the voting rights of the shares go. Let the owner will the value of the shares to whomever they want, but let the board decide where the voting power goes. This has an obvious failure mode. The people on the board deciding on who gets to vote for the board is just institutionalizing corruption. Once the board gets to decide who is on the board without outside input the process is complete.
- actually_a_dog 5y ago
  Your model is wrong or incomplete, then. Corporate taxes were at 40+% during the 1950s, which was one of the most prosperous periods in American history. [0] During that same period, the top marginal bracket for individuals exceeded 80%. [1] Nobody says “oh, I’m just not going to bother making a lot of money” just because they face a high tax rate. —— [0]: https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_St... [1]: https://www.taxpolicycenter.org/statistics/historical-highest-marginal-income-tax-rates https://www.taxpolicycenter.org/statistics/historical-highes...
  - barry-cotter 5y ago
    Incomplete. It’s not that difficult to be prosperous when you’re the only developed country that didn’t get bombed. As far as income taxes go you’re not completely wrong but if your firm can expense your car, lunch, dinner, rent for executive’s homes and children’s school fees you can have a great deal higher consumption inequality than inequality of earnings. Tax treatment has changed enormously since the 1950s in the US[1]. Also, really, nobody? I’m not claiming everyone responds in the same way, just that if you make things less attractive fewer people will do them. Think on the margin. Does increasing taxes on a thing mean no one will do sit? No. But fewer will. [1] See https://news.ycombinator.com/item?id=2979882 https://news.ycombinator.com/item?id=2979882 > Back in the 1950s, the rich were really good at tax avoidance. All they had to do was to donate more than their total income to charity. (The so-called flying nun tax exemption.) This was doable because when you donated items that appreciated in value, you didn't get taxed on the increase in value, but got to claim the whole value. So if your parents had bought a lot of art, you could donate the art. Better yet you could donate a million dollars to a charitable foundation you had, have them use it to buy a piece of art from you, and then donate 4 other pieces of art which are now valued at $1 million each. The result was a huge run-up in the value of things like art, and a simultaneous increase in public art for display. When you visit the Metropolitan Museum, you're basically seeing the benefits of a tax dodge.
JackFr 5y ago
> Let the owner will the value of the shares to whomever they want, but let the board decide where the voting power goes. That is terrible idea on so many levels it’s difficult to address them all. What is the value of the shares with no voting rights? And given your plan, I assume most boards would award the shares to themselves.
- jedberg 5y ago
  > What is the value of the shares with no voting rights? I don't know, Google and BRK-B have no voting rights yet are quite valuable. The company still has assets of value. The value isn't entirely in the vote.

sputr 5y ago

"Security of property rights is a pretty compelling public interes." Is it really? You seem to be saying that public property is sacred. If that is true its the only thing ever. Everything else has "within reason" attached to it, why not property rights.

barry-cotter 5y ago
I’m not saying public property is sacred. I’m not saying private property is sacred either. But security of private property is a big deal and shouldn’t be messed with for reasons that are too incoherent to be called an argument. Far better to increase the corporate tax rate than to just take people’s stuff. We can adjust the tax rate up and down. The government messing with property rights is a lot more durable. You can destroy a lot of trust very quickly and it takes a long time to build it up again.
JonChesterfield 5y ago
Property rights are the foundation of our society. If your stuff can be summarily taken off you without consequence (branded 'haircut', 'nationalise','theft' etc) then you are strongly disincentivised to accumulate stuff. Capitalism folds and those who want better quality of life go elsewhere.