bhupy

107 ms·

841.
by bhupy 6y ago
What you described sounds like a sovereign wealth fund, and that’s IMO a great idea.
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by bhupy 6y ago
> You might argue that this is realm of the "Estate Tax", but that is a different topic. What? Why? This is pretty squarely in the realm of how to taxa transfer of wealth. The wealth tax is a really ham-fisted way to solve this
843.
by bhupy 6y ago
No, your argument would be like saying "if you can borrow against shares to buy a big house, mega-yacht every single year, you can do so to pay your taxes". PG's essay shows that the wealth tax compounds every year. That ju
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by bhupy 6y ago
Sure, but look from 1967. The trend-line is still positive at a macro level. Since 2000 we had a huge recession, so it's not super conclusive.
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by bhupy 6y ago
We're talking about since 1967. The Great Recession is a confounding variable.
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by bhupy 6y ago
Sure, but since 1967, upper class has risen. The Great Recession is a confounding variable.
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by bhupy 6y ago
It's fairly well documented -> https://www.nytimes.com/interactive/2015/01/25/upshot/shrink...
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by bhupy 6y ago
First of all, the observation that US's shrinking middle class is attributable to an increasing upper-middle class is objectively true, it's not that controversial [4]. Second of all, Piketty's argument is more that capital&#
849.
by bhupy 6y ago
The reason why long term capital gains tax is taxed at a lower rate is to index for inflation. Inflation on short term income is negligible. As a matter of tax policy, it is much simpler to reduce the rate than to compute a very large infla
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by bhupy 6y ago
> Doesn't this assume the owner receives no other income? I assume owners either receive a salary from the company, or are paid a dividend with which they could use to pay the monetary-valued tax. Not always. To use the extremely ad
851.
by bhupy 6y ago
Yeah but borrowed money needs to be eventually paid back, so you're (at best) just deferring the problem. Even if a wealthy founder took out a collateralized loan, in order to pay back the loan, they have to realize some gain somewhere
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by bhupy 6y ago
You have 2 knobs: - ownership percentage (0-100%) - company value (50M - $2T) The Cartesian product of all ownership * value that work out to > $50M is substantial enough that it's 1) probably not fair to individual business owners
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by bhupy 6y ago
> having massive wealth and valuing it in dollars may seem nonsensical, and at some level it is, yet it is the way that everybody operates. If this was true, then why is nobody talking about imposing a tax on the market capitalization of
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by bhupy 6y ago
Yes, and when they do turn their wealth into money for whatever needs arise, they pay taxes on it. The tax rate they pay on it (20% federally, up to 37% depending on the state) is roughly equivalent to paying a compounding wealth tax after
855.
by bhupy 6y ago
> You missed a major reason long-term capital gains rates are lower than income tax rates: they are not indexed for inflation in the US and inflation on income is negligible. As a matter of tax policy, it is much simpler to reduce the ra
856.
by bhupy 6y ago
This comment was flagged for some reason, but it's entirely valid. If Elon Musk's goal was ROI maximization, he has no business maintaining ownership in SpaceX and Tesla — he ought to just dump his billions in high yield ETFs. For
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by bhupy 6y ago
> very generous floor of the wealth tax > and it seems to me applicable to a very narrow case The floor of the wealth tax doesn't really refute the central argument, because it just means that it impacts anyone who owns a busines
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by bhupy 6y ago
> There's a lot to be said for property taxes. Taxes on income and wealth are disincentives for things you wnt more of. Property tax is one of the least destructive of taxes. Yeah but a wealth tax is not the same as a property tax,
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by bhupy 6y ago
No, it means that if you fall behind the broader economy, you lose control of your own company. It deprives the business owner of the ability to turn their own company around. All to raise a minuscule percentage of the Federal budget. That&
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by bhupy 6y ago
> If it were completely inconsequential to the outside world, then others would not value it, and it wouldn't be considered wealth. That makes no sense. Just because the fair market value of Elon Musk's holdings in SpaceX and
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by bhupy 6y ago
That's a pretty broad generalization, and you've basically taken what's in reality a spectrum, and characterized it by the two extremes. In reality, there are loads of people in between: founders of medium size businesses.
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by bhupy 6y ago
> Nobody who's sitting on $50M of assets is a loser. First of all, we're not talking about "$50M of assets", we're talking about $50M ownership in your company . That is un-diversified. Second of all, a wealth t
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by bhupy 6y ago
> Wealth translates into political power This is debatable: https://fivethirtyeight.com/features/money-and-elections-a-c... Consider that the representative from Bezos' own district in Washington is a sociali
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by bhupy 6y ago
I think there's a fundamental misunderstanding of where this wealth is sitting. For most of the super-rich, the wealth isn't sitting in diverse assets that can simply be liquidated (Elon Musk doesn't have a 3rd home). If you
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by bhupy 6y ago
> If your $10 billion dollar asset isn't returning you much more than 2% per year, it has a terrible ROI, and you need to divest. That's not how corporate ownership works. It's not about the ROI, it's about ownership
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by bhupy 6y ago
Okay, $50M was just the number for the sake of the argument, but the core argument still applies for those individuals worth $100M in the same circumstance, or $500M, etc etc etc. Your argument doesn't refute my central argument, it re
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by bhupy 6y ago
That's an arbitrary incentive that's not particularly useful. And in any case, it forces one to relinquish a significant partial ownership in their own company just to be able to afford to continue owning the rest...all so that we
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by bhupy 6y ago
I meant the opposite of that. The single asset that they own is less diversified and riskier than the S&P500, and therefore you can't take the annualized return of the S&P500 and then conclude that "money makes money"
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by bhupy 6y ago
The scale of property value and wealth value isn't remotely comparable. For the most part, property values are pretty low, and hence the tax that you might pay on property is also fairly low. The US State with the highest property tax
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by bhupy 6y ago
> What's interesting about that is it would work for companies like Amazon that intentionally engineer zero profits so as to avoid taxes. They "engineer" zero profits by re-investing their surplus back into R&D — a beh

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