Comment by hyperliner | Hacker News Reader

Comment by hyperliner | Hacker News Reader

What is wrong with taxing 80% of the wealth is that then the return on the equity placed into the business to make it real just decreased 80%. At some point then many of those startups won't be created because there won't be enough return to pay for the risk. So then there will not be more of "those jobs" and there won't be any wealth created. Therefore no taxes will be paid. And we just reduced the pie to zero.

I am not sure what the number is, but when I hear 80% taxes, I think someone (maybe me) is not doing their math.

But I do agree that one must first make sure to understand the argument of the other side before articulating a counter-argument. I think in this case, there is also the problem that the message gets diluted because of the messenger: unfortunately PG does not have credibility in this area because (presumably) he has not been on the ground dealing with poverty issues as many others. Then again, many economists haven't either, even as they also postulate solutions.

You're assuming these companies create a lot of jobs, but in fact they create far fewer jobs than they did 30 years ago. As Intel founder Andy Grove said (of companies like Apple): "plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs."

Instagram (for another example) had 13 employees when sold for $1 billion.

It's a fair point. But I think that the issue is that we then are lumping all of these companies into one category and we should look into what they are doing. So if we think that "dating apps" or "photo apps" derive less social value then we would tax them more than startups that derive "more value" (say, fighting disease or providing solar power). There are systems already in place for this type of incentive, where government provides tax breaks in fields deemed "socially more valuable."

You have to be very careful with laws like this where a human has to sit and evaluate the societal benefit of one business over another. Tons of unintended, and potentially very negative, consequences to this.

Simplifying the tax system and increasing the top marginal tax rates back to something closer to where they were 40 years ago is preferable in my opinion.

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