19 ms·

It's funny how this kind of pricing works. A bag of weed captured is estimated at a thousand dollars. Ten movies pirated at twice that. We fire a JASSM in comba

• AnthonyMouse 4mo ago
  > A wealth tax will yield revenue for the next thirty years at 30 times what it will yield this year. Isn't this the opposite of how a wealth tax works? The annual turnover for e.g. Apple stock is ~0.4%, so a 0.8%/year wealth tax would triple the number of sellers without adding any new buyers. The negative effect on the price is outsized because most people hold long-term rather than buying or selling in any given year, but now people have to liquidate some every year in order to pay the government because you're taxing unrealized gains. And then because "wealth" is calculated as share price times number of shares, when the share price goes down, everyone's "wealth" goes down and with it next year's revenue from a wealth tax. There would be some limits on that in terms of the compounding negative effect on the share price because (among other things) if the price went down then foreign investors would find it more attractive to buy in and then they're not subject to the tax and don't have to sell every year to pay it, but causing more of the market to be owned by foreign rather than domestic taxpayers over time is also not a thing which leads to stable domestic tax revenue. > $6.6 billion will end world hunger but $100 billion is better spent on a train between Bakersfield and Fresno. The current UN estimate is more like $100 billion a year to end world hunger, whereas the initial build of a rail line is a one-time cost.
  • jquery 4mo ago
    The purpose of wealth taxes is redistributive, not revenue maximization of a spherical cow.
    • datsci_est_2015 4mo ago
      I prefer the phrasing “more liquid and efficient allocation of capital” over “wealth redistribution”.
    • AnthonyMouse 4mo ago
      What does that have to do with the revenue claim being questionable? Also, if that was the goal, wouldn't it be better to tax (or break up) the corporations rather than the shareholders? It comes out of their pocket either way, but forcing asset sales has a lot of negative consequences and bad incentives. On top of that, it handles the problem that the CEO of a huge company has too much power regardless of what percentage of the company's stock they own, by reducing the size of the company rather than their ownership stake in it.
      • IanCal 4mo ago
        > Also, if that was the goal, wouldn't it be better to tax (or break up) the corporations rather than the shareholders? It comes out of their pocket either way, If you do it via the corporations you're saying it should be linear (so everyone taxed flat). Doing it via the shareholders allows it to be non-linear.
  • datsci_est_2015 4mo ago
    Some disjointed thoughts of mine on this topic: Some people have to adjust their mortgage in order to pay property taxes. Most people pay property taxes out of their income. What percentage of Americans, especially home-owning Americans, have more wealth in the stock market than in their home? Property tax has the positive effect of encouraging efficient land usage and discouraging speculation and rent seeking. Is there a parallel case to be made for stock holdings, or is such an argument dead in the water because land is more tangible than company shares?
    • AnthonyMouse 4mo ago
      > Some people have to adjust their mortgage in order to pay property taxes. Most people pay property taxes out of their income. Most people get their income from wages and then pay the taxes with that. The people who are the target of a wealth tax get most of their income from investments and then to get money to pay a new tax would have to sell that proportion of the investments. It also doesn't really change anything if they invest in the sort of things that give returns through dividends instead of share price increases, because they reinvest the dividends, and having fewer people buy the stock so they can use the money to pay the tax has the same negative effect on the share price as having more people sell the stock to use the money to pay the tax. > Property tax has the positive effect of encouraging efficient land usage and discouraging speculation and rent seeking. Property tax to the extent that it's a tax on buildings/construction does precisely the opposite. Where land is more scarce the most efficient use is to build a high rise to maximize the amount of indoor living space per unit land, which is exactly the thing property tax taxes and thereby disincentivizes. Asset taxes in general create major perverse incentives because it causes underinvestment in the thing being taxed and overinvestment in any alternative that can act as a tax shelter, whether because the law exempts the alternative for some reason (e.g. lobbying), or it's hard to accurately value and therefore allows for chicanery, or it's in another jurisdiction.
      • datsci_est_2015 4mo ago
        > Property tax to the extent that it's a tax on buildings/construction does precisely the opposite. Where land is more scarce the most efficient use is to build a high rise to maximize the amount of indoor living space per unit land, which is exactly the thing property tax taxes and thereby disincentivizes. Property tax breaks in my locale lead to empty lots and empty buildings, which is the least efficient use of land imaginable. Property value seems to play a significant enough role in convincing land owners to sell their underutilized land if property taxes provide the activation energy to force them to sell. Otherwise they sit and speculate. So, your argument is convincing in theory, but appears to fall apart in practice. Aside, I’m a fan of Georgism in theory. > Asset taxes in general create major perverse incentives because it causes underinvestment in the thing being taxed and overinvestment in any alternative that can act as a tax shelter, whether because the law exempts the alternative for some reason (e.g. lobbying), or it's hard to accurately value and therefore allows for chicanery, or it's in another jurisdiction. I’m sure wealth managers are already devising strategies for reducing taxable wealth based on speculative laws and regulations. This shouldn’t be a reason not to proceed, but instead to put more resources to effective design.
  • scottlamb 4mo ago
    > The annual turnover for e.g. Apple stock is ~0.4%, so a 0.8%/year wealth tax would triple the number of sellers without adding any new buyers. Is that assuming the tax money is going into the void? I agree it might force roughly 0.8% of shares to be sold in a given year. But as to not adding any new buyers: no one's being forced to buy stock in the same way, but shouldn't someone be getting the money and potentially using it to buy Apple stock? Let's imagine for a second the wealth tax money is simply given to people who are below the threshold. Most of them may waste it on silly things like food and rent, but some might end up with a surplus and become investors. Same effect if say the income tax is lowered to make the wealth tax revenue-neutral. Or if say it's used to expand Medicare. It's hard to for me to imagine a way to spend taxes that doesn't help someone. Even if the money is used on war—a net destruction of value and lives—there are some people selling missiles better off a result.
    • roenxi 4mo ago
      Although the argument does look fundamentally reasonable, I think its biggest weakness is it doesn't make an attempt to prioritise - yes taxes always make someone better off. So does wealth. A decision has to be made. Which is more valuable? We've got a highly reliable and effective system for working that out (aka the free market economy) and no alternative in 2nd place that doesn't typically lead to mass starvation because someone underestimated how much food was needed. They people benefiting from the taxes are going to be making very different allocations to the places that the capital is being drained from. The people behind wealth taxes generally handwave explaining how their system will be better at allocating than the people who make a living of allocating wealth effectively because it is all just obvious that it doesn't need to be justified. Poor people will get more money if rich people have less, duh, QED. So far no compelling cases where they've turned out to be right. If they could do a better job, why even allow private wealth at all? > Even if the money is used on war—a net destruction of value and lives—there are some people selling missiles better off a result. Case in point, there is a topical example of Trump going in to Iran like a maniac. Yes there are some people who are better off as a result who wouldn't have been. And yet we can be pretty confident that not forcing US citizens to fund the debacle would have been a better allocation of capital.
  • Skilving 4mo ago
    Your math is off by two orders of magnitude. Apple's *daily* turnover is 0.4%.
  • triceratops 4mo ago
    > Apple stock is ~0.4%, a 0.8%/year wealth tax would triple the number of sellers without adding any new buyers Only if the tax had to be paid in US dollars. But it could just as easily be paid in Apple stock. The government doesn't have to sell the stock. It could keep it (disallow voting shares by law) and spend the dividends.
    • xienze 4mo ago
      > It could keep it (disallow voting shares by law) and spend the dividends. And if the stock doesn't yield dividends?
      • triceratops 4mo ago
        For the general case: Redeem all stock collected as tax for ETF shares that track broad-market indices. ETFs almost always yield dividends. Toss whatever remains into a black box that no one is allowed to look at. When the government needs some revenue, pick something at random and sell it. It can also sell some ETF shares. The best part is this works for private companies too. If you work at a startup and get options, now you don't have to pay taxes (as cash) for options you exercise which later turn out to be worthless. You can just hand the government some of your shares. Later down the line, the government either shares in your windfall or misses out along with you. Very fair.
        • gunapologist99 4mo ago
          > .... windfall Odd that you refer to your efforts in a startup as delivering a windfall, as if you didn't earn/expect it, as if it's a lottery ticket. Should we tax lottery earnings? Sure, why not, since we tax everything else. But a startup is not a lottery ticket, and we are harming it, at least indirectly and likely directly, by taxing it before it even exists. Even just the paperwork to handle all of this is needless friction.
          • triceratops 4mo ago
            Startup stock options are effectively a lottery ticket. Most startup options end up being worth $0 no matter how hard you labor. Your efforts may merit more than that, but to actually expect more is naivete. If you want real $$ work at a public company. You're correct that taxing exercised options at a private company is harmful. It happens today. I'm suggesting a fairer alternative.
• dnnehgf 4mo ago
  good list. if you were to send me an article containing a new one of these each day, with citations, i would pay you $1 per day. but if you were to send me an article containing a new one of these each day, with citations, plus a bunch of econ theory rationalizing it, i would pay you $0.
  • shermantanktop 4mo ago
    But would you pay $0.50 for the article plus a wiki link to the Laffer Curve article?
• Hendrikto 4mo ago
  > $6.6 billion will end world hunger And then you ask how, and you just get hand waving. Elon Musk offered the money if somebody would provide a coherent plan of how to solve world hunger with it. Nobody could.
• Veelox 4mo ago
  > $6.6 billion will end world hunger My understanding is that the only places that are starving is places like Gaza and South Sudan which are poor and actively under attack. Do you have a source for how we can spend <$10b and solve world hunger?
  • shermantanktop 4mo ago
    I read the comment as a set of examples to make a point. Sounds like you read it as a laundry list of facts that should each have cited sources. Both could be true, but OPs point is clear and valid even without sourcing a (perhaps hyperbolic) statement.
  • TheGRS 4mo ago
    They're referencing a pretty publicized spat between some folks at the UN and Elon Musk promising he would donate that amount of money towards solving world hunger. It was meant as an example of pricing at this scale. https://factually.co/fact-checks/business/elon-musk-6-billion-hunger-promise-explained-58f0ad https://factually.co/fact-checks/business/elon-musk-6-billio...
  • throwaway27448 4mo ago
    Where did you get that understanding?? People are starving all over the world, even in places that generally have access to food markets. Food insecurity exists outside of famine, sanctions, etc.
• gunapologist99 4mo ago
  > wealth tax This isn't directed at your excellent comment, but about wealth tax in general (and the proposed California version specifically); Should we tax the very people who are literally creating the future before they've even done so? The progressive views on a wealth tax are an incredibly shocking blind spot, esp on this site, begun by those who are immersed in startups and believers that risking (venturing?) to pursue tech ventures can bring about a more excellent future for everyone, not just the founders. We dare to imagine a future that does not exist, and then we believe in it until it does. If anything, we want to lubricate that path, not add friction. Hitting the VC's or founders who've made it hits everyone, all the way down the line.