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Sigh. So much here. 1. Yes, I am well aware marginal tax rates. For a rich person, the marginal tax rate asymptotically approaches all of the income. You didn'

Sigh. So much here. 1. Yes, I am well aware marginal tax rates. For a rich person, the marginal tax rate asymptotically approaches all of the income. You didn't reply to my point, though, that money you tax away from people takes away from their investments. This is the point behind an IRA, FWIW. 2. No, they were not. They were tax sheltering their income. Nobody paid anything near 91%, unless they did not hire a tax accountant, which would be stupid. Wealthy people are rarely stupid with money, that's why they're rich. (ESPN ran a documentary once about NFL players suddenly becoming rich and just as suddenly going bankrupt because they had no idea how to manage it.) 3. Art is an investment (they expect it to appreciate). So are golf courses (golf players pay to use it). So is luxury real estate (real estate appreciates). Stock buybacks mean buying stock, which is an investment. 4. There's no evidence that "extreme concentration" does anything of the sort, especially since wealth is created, not concentrated. Bob creating more money does not take anything away from Fred. Bill Gates never took any money from me. Neither did Steve Jobs, nor Elon Musk, nor Jeff Bezos. Nor did they ever take money from you. 5. It is not semantics. Having an exchange at market prices is NOT a subsidy. A subsidy is a gift of money. NASA did not buy those rockets as a gift to SpaceX. NASA bought them because they cost 10% of what NASA rockets cost, and NASA used them. NASA did not bet on Musk. If the rockets didn't work, Musk would not have been paid. Musk was losing money, and one more explosion would have bankrupted him. But that one flew, and Musk got paid. NASA did not take a risk on Musk. Musk took the risk. 6. Parkinson is a better economist than you or I. Why not read his books? They're quite good. Do you know the US did not have an income tax until 1913? It was quite prosperous, including public education. 7. Stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends.

disgruntledphd2 2y ago
> Stock buybacks mean buying stock, which is an investment. This is wildly incorrect, in that the purpose of stock buybacks is to reduce the number of shares and juice metrics like earnings per share (which weirdly enough, lots of CxOs are bonused on). > Yes, I am well aware marginal tax rates. For a rich person, the marginal tax rate asymptotically approaches all of the income. You didn't reply to my point, though, that money you tax away from people takes away from their investments. This is the point behind an IRA, FWIW. Your first comment (around the 100k income and different tax rates) had the weird marginal/total tax rate confusion, so if you'd prefer to avoid that be more clear in the future. As an example, I pay 52% marginal, but about 35% overall. > 7. Stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends. Correct, but I think this is a bad way and encoyurages non optimal behaviour.
- WalterBright 2y ago
  > juice earnings As I said, stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends. That's why it's done, though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others. There's nothing nefarious about it. > had the weird marginal/total tax rate confusion I simplified it to emphasize that taxing money away from someone leaves them with less money to invest. The issue of tax rates being marginal is irrelevant to that point. Also, for a high income person which is what we are talking about, the marginal tax rate is his overall tax rate.
  - disgruntledphd2 2y ago
    > I simplified it to emphasize that taxing money away from someone leaves them with less money to invest. The issue of tax rates being marginal is irrelevant to that point. Also, for a high income person which is what we are talking about, the marginal tax rate is his overall tax rate. This isn't generally true. I'm in the top 5% of income earners in my country, and my marginal and effective tax rates differ by a significant amount (35 effective vs 52 marginal). > As I said, stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends. That's why it's done, though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others. That's certainly one rationale. Personally, I dislike them in most cases (they make sense for companies that provide a bunch of compensation in stock). I personally think that dividends encourage market behaviour that is better (I'd never have sold my FB stock if they'd paid me a dividend), as well as reducing number go up as the only way to gain money from investing. > though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others. This is really dodgy from my perspective as by definition, a company has more information about their future earnings than another investor does. I realise that this ship has sailed, but personally I'd prefer to reduce dividend taxes for re-investments and ban most buybacks (but again, this is probably a niche position).

disgruntledphd2 2y ago

> Stock buybacks mean buying stock, which is an investment. This is wildly incorrect, in that the purpose of stock buybacks is to reduce the number of shares and juice metrics like earnings per share (which weirdly enough, lots of CxOs are bonused on). > Yes, I am well aware marginal tax rates. For a rich person, the marginal tax rate asymptotically approaches all of the income. You didn't reply to my point, though, that money you tax away from people takes away from their investments. This is the point behind an IRA, FWIW. Your first comment (around the 100k income and different tax rates) had the weird marginal/total tax rate confusion, so if you'd prefer to avoid that be more clear in the future. As an example, I pay 52% marginal, but about 35% overall. > 7. Stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends. Correct, but I think this is a bad way and encoyurages non optimal behaviour.

WalterBright 2y ago
> juice earnings As I said, stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends. That's why it's done, though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others. There's nothing nefarious about it. > had the weird marginal/total tax rate confusion I simplified it to emphasize that taxing money away from someone leaves them with less money to invest. The issue of tax rates being marginal is irrelevant to that point. Also, for a high income person which is what we are talking about, the marginal tax rate is his overall tax rate.
- disgruntledphd2 2y ago
  > I simplified it to emphasize that taxing money away from someone leaves them with less money to invest. The issue of tax rates being marginal is irrelevant to that point. Also, for a high income person which is what we are talking about, the marginal tax rate is his overall tax rate. This isn't generally true. I'm in the top 5% of income earners in my country, and my marginal and effective tax rates differ by a significant amount (35 effective vs 52 marginal). > As I said, stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends. That's why it's done, though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others. That's certainly one rationale. Personally, I dislike them in most cases (they make sense for companies that provide a bunch of compensation in stock). I personally think that dividends encourage market behaviour that is better (I'd never have sold my FB stock if they'd paid me a dividend), as well as reducing number go up as the only way to gain money from investing. > though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others. This is really dodgy from my perspective as by definition, a company has more information about their future earnings than another investor does. I realise that this ship has sailed, but personally I'd prefer to reduce dividend taxes for re-investments and ban most buybacks (but again, this is probably a niche position).