4 ms·

The natural flow of money tends towards pooling on certain individuals and groups, because accumulating capital is significantly easier when you start with capi

The natural flow of money tends towards pooling on certain individuals and groups, because accumulating capital is significantly easier when you start with capital. This is unwanted, first because it produces individuals powerful enough to topple the people’s will, and second because it is not in the interest of society for wealth to be accumulated rather than moving. By first principles you need a system to limit accumulation and redistribute it. That’s taxation. The money not being extracted from the right places, or not being distributed where it should, is a sign that the government is unwilling or incapable or working for the people. It is the people’s collective responsibility to prevent and fix that problem.

program_whiz 9mo ago
Agree, I think the issue is that taxes specifically flow to "the government" in the abstract. If there was a simple law like "95% of income or gains above $10M are taxed and redistributed equally via check / IRS rebate to every citizen automatically" then it could be a high-trust system that helps out everyone. Politicians, though greedy and self-interested, would have little choice but to continue the program untouched, similar to social security. I'd also feel a lot better about "Elon gets $200B payout", because he gets $2B and $198B goes to tax payers -- seems pretty fair. $2B is still more than anyone ever needs to live a lavish life of luxury and/or start any reasonable self-business, or buy off any politicians.
- zozbot234 9mo ago
  Most super-wealthy folks are not going to spend anywhere on the order of $200B or even $20B (in the broad timeframe of Elon's payout) on their own consumption. Even if Elon spent $100B on a mission to Mars or whatever it is that he cares about, would you really have reason to object to that, any more than if the money was spent by NASA? (The whole Apollo program and surrounding stuff probably cost on the order of that amount of money once you control for inflation, so there's plenty of precedent.)
  - program_whiz 9mo ago
    Nope no complaints, but most wealth isn't being spent. If the majority of the wealth was being spent, then there wouldn't be wealth imbalance (as all that money would flow elsewhere into the economy). The only way a wealth imbalance can occur is that someone sits on wealth and that it continues to compound. The top 1% have wealth greater than the bottom 95% of the population combined. I don't see why its more moral for someone to sit on investments than to have the money distributed to others to spend. In one case, the money goes to whichever investment the individual favors (e.g. buying tons of gold). In the "redistribute" scenario, it goes to improving the lives of many millions of people in real tangible ways, and creating a more equitable and balanced society and social trust. The top 1% of the US hold roughly 30% of all the wealth. That's roughly the same as the bottom 90% of the population. I understand there are implementation issues, but I'm merely calling out the obvious immorality of "90% of people should scrape to get by while trustfund kid lives in 4th mansion, because 'market efficiency'".
    - zozbot234 9mo ago
      Wealth that isn't being spent is effectively inert and frozen. It may have some precautionary value for the person who's holding it, but this is immaterial once you get to the million-dollar range, let alone the billions. The only interesting thing to ask about is what happens once the wealth is in fact being spent. (Of course, this wealth is generally invested in productive ventures and not literally 'frozen'; but this is a happy side effect, not something that's expressly chosen by whoever holds it. They're simply allocating it so that it 'compounds' effectively.)
    - SpicyLemonZest 9mo ago
      > The only way a wealth imbalance can occur is that someone sits on wealth and that it continues to compound. The top 1% have wealth greater than the bottom 95% of the population combined. I don't see why its more moral for someone to sit on investments than to have the money distributed to others to spend. The critical insight is that this doesn't actually work. When we say Jeff Bezos is worth $200B, we don't mean that he has $200B of money that's locked up in a vault when it could be redistributed. We mean that there are a variety of productive businesses in the world - for Bezos, mostly Amazon - which he holds ownership claims to. The vast majority of wealth in the modern US isn't money, and can only be converted to money by finding people with lots of money and selling them the right to sit on the investments instead.
alphazard 9mo ago
> This is unwanted, first because it produces individuals powerful enough to topple the people’s will Making the government resistant to manipulation is a distinct problem. It's a game theory/mechanism design problem, and its solution doesn't require taking in lots of money. Giving the government more power/money causes people to spend more effort to manipulate it, so any weaknesses are exploited to the fullest extent. > and second because it is not in the interest of society for wealth to be accumulated rather than moving. This reveals a significant misunderstanding of how capital works in an economy. None of the billionaires that come up when you type in "billionaires" into Google have access to liquid cash anywhere near the number that shows up next to their face. Their money is invested in productive projects, it's paying salaries and invested in equipment. Concentrating capital is what allows a civilization to take on big projects. As a society we want big projects to be paid for by individuals bearing the risk (skin in the game). In a free-market, capital concentrates in individuals who, empirically, know how to use it well. Spending other people's money is a great way to make sure that money is spent frivolously. You can criticize luxury spending all you want, and taxing that is something most people consider "fair", but you aren't speaking for anyone economically literate when you say that you don't want capital to concentrate. I want it to concentrate as much as it does naturally.
- srean 9mo ago
  Ideally yes, capital would be the machinery. Now, however, a lot of wealth is numbers sitting on a ledger and backed by stock valuations that have broken their connection with main Street. Or its rolling from one owner to another in derivative markets, doing scarcely little for the economy.

program_whiz 9mo ago

Agree, I think the issue is that taxes specifically flow to "the government" in the abstract. If there was a simple law like "95% of income or gains above $10M are taxed and redistributed equally via check / IRS rebate to every citizen automatically" then it could be a high-trust system that helps out everyone. Politicians, though greedy and self-interested, would have little choice but to continue the program untouched, similar to social security. I'd also feel a lot better about "Elon gets $200B payout", because he gets $2B and $198B goes to tax payers -- seems pretty fair. $2B is still more than anyone ever needs to live a lavish life of luxury and/or start any reasonable self-business, or buy off any politicians.

zozbot234 9mo ago
Most super-wealthy folks are not going to spend anywhere on the order of $200B or even $20B (in the broad timeframe of Elon's payout) on their own consumption. Even if Elon spent $100B on a mission to Mars or whatever it is that he cares about, would you really have reason to object to that, any more than if the money was spent by NASA? (The whole Apollo program and surrounding stuff probably cost on the order of that amount of money once you control for inflation, so there's plenty of precedent.)
- program_whiz 9mo ago
  Nope no complaints, but most wealth isn't being spent. If the majority of the wealth was being spent, then there wouldn't be wealth imbalance (as all that money would flow elsewhere into the economy). The only way a wealth imbalance can occur is that someone sits on wealth and that it continues to compound. The top 1% have wealth greater than the bottom 95% of the population combined. I don't see why its more moral for someone to sit on investments than to have the money distributed to others to spend. In one case, the money goes to whichever investment the individual favors (e.g. buying tons of gold). In the "redistribute" scenario, it goes to improving the lives of many millions of people in real tangible ways, and creating a more equitable and balanced society and social trust. The top 1% of the US hold roughly 30% of all the wealth. That's roughly the same as the bottom 90% of the population. I understand there are implementation issues, but I'm merely calling out the obvious immorality of "90% of people should scrape to get by while trustfund kid lives in 4th mansion, because 'market efficiency'".
  - zozbot234 9mo ago
    Wealth that isn't being spent is effectively inert and frozen. It may have some precautionary value for the person who's holding it, but this is immaterial once you get to the million-dollar range, let alone the billions. The only interesting thing to ask about is what happens once the wealth is in fact being spent. (Of course, this wealth is generally invested in productive ventures and not literally 'frozen'; but this is a happy side effect, not something that's expressly chosen by whoever holds it. They're simply allocating it so that it 'compounds' effectively.)
  - SpicyLemonZest 9mo ago
    > The only way a wealth imbalance can occur is that someone sits on wealth and that it continues to compound. The top 1% have wealth greater than the bottom 95% of the population combined. I don't see why its more moral for someone to sit on investments than to have the money distributed to others to spend. The critical insight is that this doesn't actually work. When we say Jeff Bezos is worth $200B, we don't mean that he has $200B of money that's locked up in a vault when it could be redistributed. We mean that there are a variety of productive businesses in the world - for Bezos, mostly Amazon - which he holds ownership claims to. The vast majority of wealth in the modern US isn't money, and can only be converted to money by finding people with lots of money and selling them the right to sit on the investments instead.

alphazard 9mo ago

> This is unwanted, first because it produces individuals powerful enough to topple the people’s will Making the government resistant to manipulation is a distinct problem. It's a game theory/mechanism design problem, and its solution doesn't require taking in lots of money. Giving the government more power/money causes people to spend more effort to manipulate it, so any weaknesses are exploited to the fullest extent. > and second because it is not in the interest of society for wealth to be accumulated rather than moving. This reveals a significant misunderstanding of how capital works in an economy. None of the billionaires that come up when you type in "billionaires" into Google have access to liquid cash anywhere near the number that shows up next to their face. Their money is invested in productive projects, it's paying salaries and invested in equipment. Concentrating capital is what allows a civilization to take on big projects. As a society we want big projects to be paid for by individuals bearing the risk (skin in the game). In a free-market, capital concentrates in individuals who, empirically, know how to use it well. Spending other people's money is a great way to make sure that money is spent frivolously. You can criticize luxury spending all you want, and taxing that is something most people consider "fair", but you aren't speaking for anyone economically literate when you say that you don't want capital to concentrate. I want it to concentrate as much as it does naturally.

srean 9mo ago
Ideally yes, capital would be the machinery. Now, however, a lot of wealth is numbers sitting on a ledger and backed by stock valuations that have broken their connection with main Street. Or its rolling from one owner to another in derivative markets, doing scarcely little for the economy.