bhupy

104 ms·

871.
by bhupy 6y ago
Sure, if you get recruited by a $100m startup, and you hear that the founder sold half of their stock "to diversify", there's almost not chance you're working there. Diversification is a solid strategy for most people, b
872.
by bhupy 6y ago
Then the strongest argument against a wealth tax is simply: "they'll find loopholes". It's circular and un-falsifiable.
873.
by bhupy 6y ago
Agree! IMO the solution isn't a wealth tax, it's to just tie the capital gains tax to the income tax bracket. That, or adding a top marginal capital gains bracket for any gain above (say) $100 million. This also has the built-in a
874.
by bhupy 6y ago
The company that they own.
875.
by bhupy 6y ago
Yes, you do. So why add yet another worry (a 0.5% wealth tax). Keep in mind that "flat or depreciating" companies are way more common than you think. Not every company enjoys the annualized returns of the S&P500. Almost any no
876.
by bhupy 6y ago
> IIRC Bezos sells over $1B in Amazon stock per year to fund other things, but there is no outcry about how un-american it is that he has to "sell off his stake in his own company" to pay for his hobbies/lifestyle. Sure, b
877.
by bhupy 6y ago
I think the argument that you're making is that the existing estate taxes need to close foreign asset loopholes, but that's about it.
878.
by bhupy 6y ago
> no, only the most obstinate would not diversify their holdings once they reach tens of millions, let alone billions. Just do the math, you need to divest a significant percentage of your own holdings in order to re-invest it into diver
879.
by bhupy 6y ago
> And because that liquidation or transformation is a taxable event, and holding the wealth is not, people are far more likely to hold onto wealth rather than try to transform it. But if wealth is never liquidated, then how is it anythin
880.
by bhupy 6y ago
Great point. However, Amazon (as an example) does not pay dividends. And also, this creates an incentive to pay dividends to shareholders, as opposed to re-investing profits in R&D, which is an odd (IMO bad) incentive.
881.
by bhupy 6y ago
Super-wealthy founders are not sufficiently diversified, no.
882.
by bhupy 6y ago
> any founder who's reached millions in personal gain from their single, undiversified startup, will begin to employ financial strategies to diversify some of that gain into other instruments to reduce risk This is literally not tru
883.
by bhupy 6y ago
> but when it's built on top of people making $7.25 an hour with no benefits, it may as well be. But...it's not? The only person who has concentrated an unimaginable amount of wealth for which this might be true is Jeff Bezos&#
884.
by bhupy 6y ago
That's not an "intentional misdirection", it's undeniably true. > what would more likely happen is that loan products and other financial instruments and techniques would pop up so you could pay the taxes in a whole h
885.
by bhupy 6y ago
But none of the people you are trying to target with the wealth tax have their holdings in the S&P500. Instead they have close to 100% of their holdings in a single asset represented by the more diversified S&P500. There is no guara
886.
by bhupy 6y ago
> while the truly rich simply find loopholes You'll have to walk through how exactly, otherwise this is just a hand-wavy and unfalsifiable assertion.
887.
by bhupy 6y ago
> I can't see many people that have already accrued personal wealth of $50M but choose to keep working suddenly being turned off because of a wealth tax. That's not the argument. If you accrue a wealth of $50M because you own h
888.
by bhupy 6y ago
> But hugely unequal distribution of wealth also results in slower economic growth and overall less economic activity than if there is more equal access to capital and resources But wealth != capital. Wealth only becomes capital when it
889.
by bhupy 6y ago
But asset isn't guaranteed to grow at 5%, it only grows that much on average . What you say makes sense if the wealth tax is applied on ETF/index fund holdings, but for most founders, the wealth is concentrated in holdings in the
890.
by bhupy 6y ago
> money earns money. A conservative drawdown of 3% pay the most commonly proposed wealth tax while still leaving you wealthier at the end of the year. That is only true if your wealth is in diversified ETFs or funds. That is not where mo
891.
by bhupy 6y ago
Agreed. As you said, the solution to that is either a Georgist Land Value Tax or a Land Appreciation Tax, not a blanket wealth tax.
892.
by bhupy 6y ago
But even if they take out a collateralized loan, they need to be realize some gain somewhere to pay back that loan. Wherever that happens, it is taxed either as income or capital gain. Nobody is going to loan Bezos billions and expect not t
893.
by bhupy 6y ago
But most people aren’t actually sitting on “cash”. That’s the whole problem. You might be suggesting a tax on liquid cash, which would target way fewer people.
894.
by bhupy 6y ago
But a wealth tax also targets owners of assets that don’t appreciate. It taxes both the winners and the losers, and for the latter it’s nothing but a forced divestiture of their ownership stake. A capital gains tax, on the other hand, str
895.
by bhupy 6y ago
12 states have an inheritance/estate tax. Definitely worth replicating in the others, too.
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by bhupy 6y ago
I’m still not sure why the debate has converged around a wealth tax rather than just making the income tax rate on every dollar above $1 billion 100% (or close to 100%). That way, on the day that the super rich decide to liquidate their ass
897.
by bhupy 6y ago
That’s on average, yes. But for those owners of business where equity value is either flat, or moderately decreases, a wealth tax is essentially a forced divestiture scheme.
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by bhupy 6y ago
> Delivery costs might go down at the expense of a large number of rural Americans unable to get mail at all This is conjecture, at best. If there’s a market need for something, it will be met at the fair market value for that thing — pr
899.
by bhupy 6y ago
That’s not the unfalsifiable argument. We’d already addressed Amazon and Wal-Mart. 2 of the 500+ billion dollar corporations that contribute to “inequality” as a nebulous problem. Outside of that, you said: > And dozens of stories like t
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by bhupy 6y ago
Me, without a doubt. I'm too old and busy to worry about configuring my phone or making sure that it's safe / clean. I also buy it for my parents for the same reason.

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