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"Tax what you want less of." Do you want less investment?
by kyboren 9mo ago
"Tax what you want less of."
Do you want less investment?
- mapontosevenths 9mo agoGold is not an investment. It takes otherwise productive capital out of the economy and produces nothing. It's functionally no different than stuffing your money in a mattress.
- kajecounterhack 9mo agoIt has utility though: unlike the dollars in your mattress, it can't be printed into oblivion by your central bank. It is relatively portable, and people have flocked to it as a store of value especially during periods of socioeconomic instability when assets are going down and gov't spending is going up. It's tradeable for fiat in any country, so it allows you to bring value along if you relocate. Its price reflects that utility and like any modern asset, a lot of speculation. You can speculate on whether it's more or less useful given current events -- nothing wrong with speculating that it is only going to be increasingly useful.
- mapontosevenths 9mo agoYou're right that it has utility, but being fungible doesnt imply that it is automatically an investment. Speculation is not the same as investment, and it is still completely non-productive.
- kajecounterhack 9mo agoAgree it doesn't generate wealth. It's explicitly a store of wealth. Investment is a weird term because most people would consider keeping cash or cash equivalents (gold) to be investments, even if they don't generate wealth. Cash is also an opinion, in terms of the market.
- michaelmrose 9mo agoAn investment creates a return
- deleted 9mo ago[deleted]
- fuzzfactor 9mo agoRoger, sometimes positive, sometimes negative.
- its_ethan 9mo agoWhat is it that you're arguing for then? That there be some entity that gets to decide what is and isn't a productive use of all of our excess money? Who gets to decide what's excess? Who gets to decide what is and isn't a productive use of the money? How is this any different than buying a house? Buying a house that's already been built is pretty damn close to the same thing as buying gold. No new "work" is being done into the economy, you're just exchanging dollars for an asset that will likely appreciate a bit faster than inflation but less than $SPY. The person you bought it from can do something else with that money, sure, but that's also true of the other person in your transaction to buy gold. Maybe you'll say a house has more utility than bars of gold, but all of this at the end of the day, seems to come down to your specific views and judgements of what it means for capital to be used productively. So to circle back to the beginning, what is it you're advocating for here? That because you don't see gold as a low risk hedge against inflation as being "productive" it should face more taxes to incentivize it not happening?
- mapontosevenths 9mo agoNo, im not arguing that it should be illegal. Im just saying, as Warren Buffet before me did, that its not an investment. It relies on the greater fool theory to produce excess returns. It is bad for the economy when money idles in non productive speculative assets.
- amanaplanacanal 9mo agoThe money didn't disappear, it just changed hands.
- mapontosevenths 9mo agoYou are forgetting the opportunity cost. The gold does not generate wealth it just stores value, like a mattress stuffed with bills. It has become a dead, stagnant, and unproductive thing and by doing that it has removed value from the overall economy that was previously there.
- ahtihn 9mo agoWhy would you want to encourage investment in gold?
- lostlogin 9mo ago> Tax what you want less of. How do you apply this to housing? You want investment in housing. You don’t want slumlords ramping up prices for slums. Presumably somewhere has got the balance correct. I haven’t been to that place.
- lazylizard 8mo agou can not-tax the first property...
- roenxi 9mo agoBecause we need a low risk system to track whether people are net-contributing or -draining society's resources, otherwise it isn't easy to tell who is creating more wealth so they can be supported. Gold remains the best option after centuries (if not millennia) of experimentation.