5 ms·

How can this phenomenon be reigned in and sorted in the medium to long-term? Far more aggressive progressive taxation.

• koolba 2y ago
  > Far more aggressive progressive taxation. Why would increasing taxes lower costs for anything? If anything they’d have to raise prices further to compensate for additional tax payments.
  • ceejayoz 2y ago
    Genuinely progressive taxation would aim to reduce the tax burden on small independent and non-profit vet practices, and increase it dramatically on the profits the big PE firms are taking.
  • bongodongobob 2y ago
    It increases the risk of turning a profit due to consolidation and lack of competition. Oh you made $20 million off that vet clinic? You owe $19 million in taxes. Makes it harder to gouge people because buying "all the things" becomes far more risky and natural competition has a better chance of doing it's thing.
    • koolba 2y ago
      > Oh you made $20 million off that vet clinic? You owe $19 million in taxes. This type of myopic thinking is how you get asinine policy like the ACA “cap on profits”. Instead of incentivizing an efficient operation, we’ll have some other accounting shenanigans to pass on profits as some other form of income.
      • bongodongobob 2y ago
        It's an exaggeration of what progressive taxes do. I'm not suggestion 95% of profits should be lost to taxes at 20 mil.
  • Calavar 2y ago
    Isn't the libertarian view on progressive income tax that it reduces the marginal returns on additional labor, thus removing the incentive for people to work harder and being more productive? Why would the reverse be true for people who work in private equity?
• JumpCrisscross 2y ago
  > Far more aggressive progressive taxation At least in veterinary care, a major way to buy practices on the cheap is in finding vets who are behind on state taxes.
  • ceejayoz 2y ago
    I'm pretty sure they're advocating better taxing the PE firms looting billions, not the vets making $150k/year.
    • toomuchtodo 2y ago
      Right, come hard at the vultures.
    • JumpCrisscross 2y ago
      > pretty sure they're advocating better taxing the PE firms looting billions, not the vets making $150k/year My point is this isn’t a symptom of closing the carried-interest loophole. It’s fundamental to the business. The fixed costs of administering a veterinary clinic demand scale, and scale thirsts for capital.
      • matthewdgreen 2y ago
        If this was about administering practices more efficiently at scale, we’d see acquired practices lowering their prices and competing more aggressively due to their better cost structure. If this was about rent seeking by buying up a limited supply of regulated businesses, we’d see prices surge upward. In most of the purchased practices we’re seeing the latter.
        • JumpCrisscross 2y ago
          > we’d see acquired practices lowering their prices and competing more aggressively due to their better cost structure Introducing a new fixed cost into a market should not be expected to increase competitiveness. It almost always reduces it. The trade-off with regulation is that trade-off is worth it. Put another way: if you are a $50mm practice, and it suddenly becomes infeasible to run anything smaller than $40mm, your market power increases. You have less competition.