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Comment by chrisco255 | Hacker News Reader

You have an unsubstantiated argument with presuming that taxing billionaires or millionaires at 80% would be good for society.

Let's set aside arguments of individuality vs. socialism and whether government should operate for the hugely debatable, ephemeral term, "the greater good". I think that invites a separate essay on its own.

From a purely utilitarian perspective, the rich often leverage their capital to achieve things that would be impossible or difficult to do without access to the capital they created.

Case in point, is Elon Musk. If he didn't take home most of the money he earned from his involvement in Paypal, the odds of Space X, Tesla, and Solar City ever happening are decreased dramatically. When in the hands of an extraordinarily talented individual like Musk, capital can work to create long-lasting ripple effects that benefit society as a whole.

If you had taxed Musk at 80%, and he was left with a paltry $30 million or so, it's likely that one or more of the above companies never happen. The opportunity cost is that less jobs get created, unique and innovative technology never gets formed, and the ripple effects (such as spurring Chevrolet and others to make electric vehicles) never happen.

While not always the case, it is often the case that private capital investments do improve society in meaningful ways.

The economy is a very fungible thing and the idea that it is approaching "zero sum" is an unfounded one in the extreme.

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> Case in point, is Elon Musk. If he didn't take home most of the money he earned from his involvement in Paypal, the odds of Space X, Tesla, and Solar City ever happening are decreased dramatically. When in the hands of an extraordinarily talented individual like Musk, capital can work to create long-lasting ripple effects that benefit society as a whole.

What you're claiming here is that Musk can allocate capital better than a government, right? That leaving the money in his hands was better than taxing it and spending it on government projects? (note that all three of SpaceX, Tesla and Solar City received substantial amounts of funding from the US government (directly or indirectly) and would likely not be viable without it, even leaving aside all the USG-funded basic research that was necessary to make them possible in the first place).

Even if that's true for Musk specifically (which I doubt), is it true on average? How efficient is the average billionaire at using their money for social good? You gloss over a lot with "While not always the case" - how does the average return to society on a private capital investment compare with a public capital investment?

On what basis are you claiming that the government could have equalled SpaceX's achievements? SpaceX has made several firsts that no company or government ever has before.

Receiving money from the government doesn't mean the government could have done the same thing.

Landing their first stage was huge, but what other firsts have they had? All the others seem to be of the form "first private X" which excludes government only by definition.

Indeed. They had a lot of "new and put into practice" things - a new engine design, a new way to manufacture rockets, a new way to manufacture engines (were any other operational engines 3D printed before?). They improved on quite a lot of things. But "firsts"? Not many indeed.

Are you on crack? In what respect does SpaceX's achievements equal large government pushes like the Apollo program, that got a man on the moon almost 50 years ago!! Or the Manhattan Project? With almost complete certainty I can say that government projects could have achieved everything SpaceX has... now wether as efficiently or quickly I'll grant is up for debate.

I think that it's SpaceX that is one of the few companies that can actually achieve something similar to Apollo or Manhattan Projects. Both the Moon Landings and the atomic bomb development had strong non-monetary motivations. People at all levels, from the lowest worker to the highest manager, cared very much about the project's success, and not just about their own pockets. Just like Elon cares about Tesla and SpaceX. Also, completely unlike most today's companies, and completely unlike today's government.

> SpaceX has made several firsts that no company or government ever has before.

Not meaningfully, not yet. They've landed the expensive part of a satellite launch system, which is very cool but the USG did it 30+ years ago. I don't think the difference between a vertical and a horizontal landing is that important.

And fundamentally there's no magic private industry pixie dust. A company is just a collection of people, as is a government; they both have to obey the same laws of physics. In some cases competition drives private industry to be more efficient. In some cases the government's long time horizons, trusted position, and ability to do things where the benefits are widely diffused make it more efficient. But it's only ever a matter of efficiency, not of can or can't.

> Receiving money from the government doesn't mean the government could have done the same thing.

It means that government money was a vital part of making it happen. SpaceX built their system on the back of $X from Musk and $Y from the USG (among other sources). If we took some money out of the X pile and put it in the Y pile, maybe the result would have been worse, maybe it would have been better.

Remember that most of SpaceX's core technology was literally given to them by NASA, and on top of that they're getting guaranteed contracts by the government (i.e. the dreaded government funding - they don't know how to allocate capital, right?).

Even the landing of the first stage was mostly based on NASA research. Which by the way, NASA had achieved long ago.

SpaceX innovated with their cost cutting, and maybe now their manufacturing processes, and by being lucky by benefitting from a period of cost cutting by NASA whereby they could hire a bunch of NASA engineers/scientists.

Well... one refrain I keep hearing from government is "Please, small businesses save us from ourselves because everything we do seems to accumulate a 20x overhead!"

http://ecorner.stanford.edu/material_mobile.html?material=34...

A big reason is that governments have to be accountable to the public. We ourselves create quite a lot of pressure that creates the waste. That, and of course a lot of people inside and outside governments who try to steal something. See for example procurement and bids in public projects.

Totally agree. If you listen to the linked conversation, the major source of overhead they discuss is the layers and layers of requirements an assurances that have been accumulated into the procurement process. I get the impression that every time a govt project goes 4x over budget, someone adds a new requirement "To ensure this never happens again!" After a few decades of this, we end up with a guarantee of 20x overhead.

Who defines 'social good'? You assume an elite that can determine efficiency! This is the socialist conceit.

Milton Friedman:

“There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money.

Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.

Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!

Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. ”

Spending somebody else's money on somebody else describes a large fraction of what many employees of a business do. It looks to me as if those employees generally do a decent enough job of buying useful things at a reasonable price.

How can that be, given what Milton Friedman says? Two reasons. First: there are incentives in place to encourage them to do it. If they buy useless things or spend too much money, someone may notice and they may lose their job. If they find a particularly good bargain, they may be rewarded. Second: most people are not perfectly selfish utility-maximizing homo economicus, and even when spending "somebody else's money on somebody else" they do in fact prefer to do so in a way that benefits the second somebody-else at not too much cost to the first one.

Guess what? Much the same applies in government. Suppose you're a doctor in a nationally-run health system like the UK's. You examine a patient and prescribe a drug. Does the fact that you're spending "somebody else's money on somebody else" really mean that you won't prefer to prescribe a drug that actually helps the patient's problem? Does it mean you won't prefer a cheaper drug over a more expensive one that performs no better? Of course not. And if in fact you are the way Milton Friedman professes to be -- if you prescribe with blithe indifference to whether your patients live or die and to whether your national health service goes bankrupt -- then there's a real risk that someone will notice and you'll be out of a job, or pilloried in the newspapers, or something similarly undesirable.

At least one person downvoted the above. If someone who did is reading this: I would be very interested to know why.

(I don't at all object to being downvoted. But if I'm thinking incompetently or writing badly or being obnoxious or something, I'd like to know what's wrong so that I can fix it. And I haven't been able to figure out what's downvote-worthy in the parent of this comment.)

The problem with government is that the bar to fire people is too high for it to work the way you describe. And it's that way for a reason.

The system used to be that, when a party won an election, they'd fire the existing government employees, and replace them with members of their party. "To the victor go the spoils", and this was called the "spoils system". But that meant that the knowledge of how the day-to-day government functioned got lost after every election, which was non-optimal. So laws were passed to eliminate that practice, but at the price of making it hard to fire government employees. (Add in public sector unions, and it gets even harder.)

At least in a democracy, you can vote people out, so in theory, the general public has a say in what 'public good' billions are spent on. The problem with relying on philanthropy to fund the public good is: How do I, as a member of the public, influence what the Koch brothers consider to be 'public good'?

Great point,never realised thats the reason,may i say it has a very negative effect when you have tolitarian type admin with no,age limit on appointments,cant admins be obliged to shift people to other sections or sack people after 12 years if results of department had a lacklustre performance ,when opposition wins? On the VC thing i think it stifles compatition and tax paying and i dont want to have any taxes diverted for somebody to go into space its not making my life any easier .id prefer all companies pay full taxes in 1)the countries where the raw materials are sourced ,2) the credit card payment,end user country ,rather than keepng money in convinient little tax places ,charity setups and all that stuff ,its getting very unrealistic feeding of other peoples hunger and poverty and thinking your doing good!

> Who defines 'social good'? You assume an elite that can determine efficiency! This is the socialist conceit.

Er, no, democracy defines it.

What if the democracy is roughly split 50/50 on the issues of what defines social good?

People voting define social good, obviously. That is the conceit of any 'proponent of Democracy'. Whoever has power decides where resources are spent. You're suggesting whoever currently happens to have money should have power (how convenient). I'm suggesting the people in a country should have power, which is incidentally not a new concept no matter how much you treat it as such.

If you don't let the voting populace define and work towards social good, wealthy and powerful elites define social good, or more likely, pretend the concept doesn't exist or that they don't understand it as you have.

Our shared brain architecture, and universal moral basics that come from it, are what defines both individual and social good. Whether you have a benevolent dictator or an utopian democracy, it doesn't matter - both can figure out and achieve social good perfectly well.

Of couse we don't live in a perfect world, and so the elite can be counted on to be and stay benevolent. But neither you can count on voters not being stupid, or entrepreneurs not being greedy.

It's not that we can't figure out what problems are to be solved. It's that we let huge amounts of bullshit take precedence.

Assuming a central elite of politicians is uniquely qualified to define and fund 'social good' through legislation is just like assuming a central elite of billionaires is uniquely qualified to define and fund 'social good' through philanthropy.

NASA's achievements have been impressive, to be sure. I don't want to discount that. However, it has accumulated some inefficiencies and some stagnation over the decades.

What NASA has achieved, they've done so with over $1 trillion in inflation-adjusted capital funds over the decades, that have been allocated to them.

What is debatable is whether or not they've made or always made efficient use of the capital they've been allocated.

Space X has innovated on a number of fronts with less than 1500 employees and only a fraction of the capital that NASA has been allocated. For one, the Space Shuttle program was costing the U.S. $450 million+ per launch. A Falcon 9 launch costs an average of $57 million. There is proof that he can allocate capital better than the government.

> Space X has innovated on a number of fronts with less than 1500 employees and only a fraction of the capital that NASA has been allocated. For one, the Space Shuttle program was costing the U.S. $450 million+ per launch. A Falcon 9 launch costs an average of $57 million. There is proof that he can allocate capital better than the government.

No it's not. The requirements on the two systems were not remotely the same, and it's not surprising that a system built 30+ years later with the lessons of the previous system in mind would be more efficient.

NASA is still around, you know. They could jump in at any time and make it happen, rather than pay some contractor cost-plus for it...but they don't. The red tape they have to deal with to get anything done is just too great.

I look at the billionaires, and I wonder if you're right. But then I look at Congress...

An entrepreneur who lucked into a company that made him billions is not necessarily more qualified than anyone else to allocate society's resources. I'd also argue that a politician that managed to win a popularity contest is also not necessarily qualified to allocate society's resources. But at least the latter is, in theory at least, accountable to that society.

There are probably lots of smart people out there qualified to allocate society's resources, but they tend to not become billionaires or win elections.

Reminds me of this:

http://www.lrb.co.uk/v28/n07/slavoj-zizek/nobody-has-to-be-v...

Musk is the exception though, he explicitly did not take his money 'home', he invested it (all of it!) back into new projects.

Most people that somehow made a lot of money would not do this.

name one.

billionaires don't sit on their capital.

The entire Walton family. (That's six).

they own walmart equity, you know, one of the largest employers on the planet. they have foundations, you know, that help the less fortunate: http://www.waltonfamilyfoundation.org/

you guys have a lot of neat ideas for other people's money.

You asked for names, you got names. Nobody said anything about how they should spend their money.

Actually they are the biggest welfare recipient on the planet. They pay workers so little and abuse them so that they must rely on government help, provided by the taxes they avoid paying. They are a parasite.

They pay their workers $10 an hour plus health benefits. For the low-skilled labor that most Wal-Mart employees fulfill, that's a pretty good deal.

Isnt walmart pretty famous for paying low spectrum wages ?Foundations are based on avoiding a future tax contribution of your income,unless the inheritance tax is zero i.e unlike Joe public who dosnt have one so your definately spending a very decent amount of other peoples money

Why is this getting downvoted? Most of the Walton family's money is in Walmart stock, not sitting in a savings account.

I did name one.

One that did. I don't know of any others that did.

Musk is driven in a way that no Gates, Jobs, Ellison or anybody else of such wealth is. I don't see him with a huge mansion or a yacht, just more projects.

musk is young, and gates is probably the great living human being. of all the people you gripe about, you've chosen a guy who gave, what, everything to humanity?

> gates is probably the great living human being.

I'm sorry, I remember a totally different Bill Gates all too well. I'd definitely not list him as 'the greatest living human being'.

and musk is a dick now. it's a product of age and aggression.

> and musk is a dick now.

Why?

> it's a product of age and aggression.

Should I wonder about your age now?

> gates is probably the great living human being

Amazing how a person can go from most hated in tech to most revered in the space of few years.

Actions speak louder than words. He facilitated great damage to the tech industry back then. Today, he uses his accumulated wealth to honestly try and fix several big problems on this planet, and he's very smart about doing it right. I say that if he deserved hate then, he deserves the praise now.

Unless your a doctor assistent in a undeveloped country using a old windows program ( which came with a dumped computer from a massive toxic rubbish tip curtosy from the 1st world) and about to loose all your life saving data because you cant upgrade and dont even know about having any upgrate.programmes ,apps arnt even available or being sold like Coca Cola everywhere at a relative price point.Plus some countries can use this copyright law very effectively against budding buisnesses and the programmes arnt actually sold legally in that poorer country anyway

Gates is incredibly driven. Take a look at the corporate history from the 90s. Then look at what his foundation does. Man's a shark. Gets stuff done.

Musk is just the Lebron James or Michael Jordan of entrepreneurs. It doesn't matter that others aren't as good as him or as driven as him to keep improving. There is an entire league of entrepreneurs out there doing things that aren't as well-publicized but still very fundamentally important to our society and how it works.

And your ignorance of the fact is probably that you never stop to talk to some of the business owners in your area, and see what they're planning.

You can only find so many stories at the height of public consciousness and Musk just happens to be one of them.

As for buying mansions and yachts, you can't tell me that that's any different than you buying the latest iPhone or car when you already have a perfectly usable phone.

Hell, we could all be getting by with Nokia 3350s if we really want to take that argument there. We don't really need color screens, or internet in our pockets. It's really just a convenience after all, and there are many less fortunate out there in 3rd world countries without phones at all.

Here's where we begin to argue about what poverty means and what 'filthy rich' means. They aren't clearly defined.

I'm for people who earn money, fairly and legally, using it however they see fit. If they want to build space ships, awesome. If they want to buy yachts, awesome.

Even the yachts employ people and produce net effects on the economy that could be argued as positive things. Many engineers and craftsmen are employed by the yacht industry.

I happen to live in one of the yacht capitals of the world, Fort Lauderdale, and there are over 100,000 people employed in that industry here alone.

> There is an entire league of entrepreneurs out there doing things that aren't as well-publicized but still very fundamentally important to our society and how it works.

I'll happily agree to that.

> And your ignorance of the fact is probably that you never stop to talk to some of the business owners in your area, and see what they're planning.

You're incredibly funny.

> As for buying mansions and yachts, you can't tell me that > that's any different than you buying the latest iPhone or > car when you already have a perfectly usable phone.

> Hell, we could all be getting by with Nokia 3350s if we really > want to take that argument there. > We don't really need color screens, or internet in our pockets. > It's really just a convenience after all, and there are many less > fortunate out there in 3rd world countries without phones at all.

I'd have bought another one if they let me but I'm still on the nokia dumb phone that I bought 5 years ago and I probably will be as long as it works. I have some smart phones lying around for development and testing (ubuntu, an android phone and an older iphone), but I have never felt the need to carry one with me when I go out the door.

> Here's where we begin to argue about what poverty means and what 'filthy rich' means. They aren't clearly defined.

We're all filthy rich.

> I'm for people who earn money, fairly and legally, using it however they see fit. If they want to build space ships, awesome. If they want to buy yachts, awesome.

Sure. But the space ships are a tad more impressive to me than the yachts.

While I agree with you for the most part, according to this[1] Musk does seem to have a mansion. It says the value is only $17 million though, so pretty far from Gates[2].

[1]: http://www.bloomberg.com/news/videos/b/6e27fcba-309d-494e-b8...

[2]: https://en.wikipedia.org/wiki/Bill_Gates'_house

Yes, someone else already pointed this out. I wasn't aware of it, another commenter a few days ago wrote that he rented a place because he'd dumped all his money into his investments (in fact, that he had to borrow his rent money).

It seems that that has been fixed in the meantime.

I think I'll disagree about Gates. I know you remember him more from his Microsoft career - I was young enough then that for me he was just a boogeyman used by Linux fans to justify their self-perceived superiority, etc., so we have a difference in perspective. The Gates I know is mostly the Gates of today, and it seems to me that he's both incredibly driven and finally found the moral compass. From what I know, he and his wife are now doing great work for mankind, and they're incredibly smart at making it as effective as it can be. Does this offset his sins from the past? I don't know. But I applaud what he's doing today.

Here is one nice example of something that I'm unlikely to forget any time soon:

https://en.wikipedia.org/wiki/SCO%E2%80%93Linux_controversie...

Note that Gates was still very much involved in Microsoft at that time.

Musk is not an exception. History is absolutely filled with entrepreneurs in the same vein. Disney, Rockefeller, Ford, Jobs, Branson, just to name a few.

And those may be some of the more standout examples, but there are hundreds of thousands of entrepreneurs who have made similar reinvestments or expansions to some smaller effect.

The carpenter who invests his post-tax capital in buying better tools or increasing his skill is producing a net-positive effect for society by improving the quality of carpentry available to people in his area.

Our economy is in large part, the net effect of the sum of all those micro-improvements.

I don't think you get to compare those living the high life with Elon Musk. He gives me the impression that he'd rather re-invest every last cent he has into new projects than that he'd ever splurge 10's of millions on himself.

Branson and Jobs for instance own (and owned) huge boats that they had built especially for them and spend(t) lavish amount of money on themselves, their houses and so on.

Instead of building a boat for himself Elon Musk decided to back Tesla.

The Rockefellers and Ford are of a different era, hard to compare their wealth and what they did with it back when they made it with todays world. Disney doesn't even belong in that list (for me).

he'd rather re-invest every last cent he has into new projects than that he'd ever splurge 10's of millions on himself

Take A Tour Of Elon Musk's $17 Million Bel Air Mansion[1]

[1] http://www.businessinsider.com/photo-tour-of-elon-musks-hous...

To be fair, $17 million is 0.14% of his net worth.

I don't own my apartment, but if I did, it would be approximately 100% of my net worth.

Right, but the OP said Musk didn't do stuff like that, which is what I was pointing out was incorrect.

Ah, good point. I didn't know about that.

> He and his five sons had lived in the house for three years, which Musk rented before he felt financially secure enough to buy.

Is an interesting line in that article. The 'still rents a house' line stuck with me from somewhere, I didn't know what kind of a house it was. It's a bit larger than mine, that's for sure :), and I hope he enjoys it.

I wonder, how much time does he even have to enjoy it?

>>Take A Tour Of Elon Musk's $17 Million Bel Air Mansion

And why exactly is that wrong?

It's not

The vast majority of billionaires are people whose names and actions, entrepreneurial or not, none of us know. Just because you can name a handful of successful rich businessmen over the last century, doesn't even come close to proving that most billionaires are like Musk.

I think this argument is presuming that when someone is looking at an income of $1 billion per year, they will simply accept that fate and write a check to the US government. This sounds astoundingly unlikely, in my opinion.

This person who's making $1 billion will simply put their money someplace else, they will figure out a way so that they need not claim it as income. They may push some of this money back into their company, perhaps raising the wages of some (or all) of their employees. They may form a new company to shelter this income and this new company may do something fabulously exciting and, thus, generate another shockingly large sum for this individual. Both of these sound okay to me.

> They may push some of this money back into their company, perhaps raising the wages of some (or all) of their employees.

This is a good point that I've never seen brought up before. How much of increasing inequality (whatever your definition of that) can be attributed to stagnating wages at the bottom 4 quintiles, because the tax climate isn't sufficiently incentivizing reinvestment?

On the whole my first instinct is to oppose new or increased taxes if only on philosophical grounds, but this may be cause for a second look.

This seems like a good spot to go meta - what exactly does someone who has achieved a level of financial success owe the rest of us? The Christian church has a well-known - at least among churchgoers - figure, which is 10% or a tithe. Ask someone who favors government and they will probably say something like "as much as we need." Ask someone who does not and they will probably say something like "as little as possible." It's a long shot but it might help if we had some consensus of what constitutes an equitable "contribution."

That's why Effective Altruism movement settled on the 10% of income as a default "good enough" contribution. As Scott Alexander explained in [0],

"It’s ten percent because that is the standard decreed by Giving What We Can and the effective altruist community. Why should we believe their standard? I think we should believe it because if we reject it in favor of “No, you are a bad person unless you give all of it,” then everyone will just sit around feeling very guilty and doing nothing. But if we very clearly say “You have discharged your moral duty if you give ten percent or more,” then many people will give ten percent or more. The most important thing is having a Schelling point, and ten percent is nice, round, divinely ordained, and – crucially – the Schelling point upon which we have already settled. It is an active Schelling point."

It's still better to get a suboptimal outcome than to not get any outcome at all.

[0] - http://slatestarcodex.com/2014/12/19/nobody-is-perfect-every...

Those are all problems that can be solved with sufficient political will. Shocking that politicians who are owned by the wealthy do not have the will to write loophole-free tax policy.

I was thinking of Musk too. A person with $1bn in the bank is very rich. So is a person with $200m in the bank. But the first person still has a lot more freedom of action. When you rob people of their freedom of action, you get bad economies.

An important warning: you can't draw generalized conclusion about rich entrepreneurs by looking at Elon Musk, because he is totally unlike a typical rich entrepreneur. He plays by a completely different book than almost everyone else. He is not in the game to make money, he is in it to fix a few big problems for the whole mankind. His companies are only the vehicles to achieve this goal. SpaceX wasn't created because he was looking for a way to make money and found that satellite launches are a market ripe for disruption. It was created because he wants humans to go to Mars, and (after failed attempts to buy ICBMs from Russia) starting a very innovative rocket company was the best way for him to make it happen.

I agree that what Elon did would not be possible if he was taxed at 80%. But he is an extreme case. He is an outlier in the outliers group. Most rich entrepreneurs, frankly, don't give a shit. The few that do have often tied hands (there's only so much you can do if your company has shareholders deciding about stuff). But most don't give a shit. Can you imagine, say, CEO of Oracle investing all his wealth to literally force an electric car into market viability because he believes that we need to do something about sustainable energy right fucking now? I can't.

So maybe that 80% tax would stop an occasional Elon Musk from saving the world. But if it also makes everyone much better off, then maybe it's worth it. Especially if it could relax the current economic pressures, so that we wouldn't need crazy millionaires going against the market to fix something on this planet.

Any argument for a policy that hasn't been tried under current conditions is 'unsubstantiated', so that isn't s valid attack.

But.. I think the idea that a government would allocate the money better than Elon Musk, is indeed suspect. The point here is that Elon Musk is an unusual person.

A more useful question might be - how can we optimize the number of people like Elon Musk who get to execute?

Moving capital to the government probably isn't going to help with that, but concentrating money in the hands of 'investors' is probably not optimal either. In many ways they are just a lesser version of government - a bit less bureaucratic, and a bit more open, but nevertheless not the people who create new wealth. They may have created wealth themselves in the past which is a better qualification than being a politician, but unlike Musk, who is executing himself, for the most part investors are not.

It seems to me that the real constraint is not on who gets to pick winners (govt vs investors), but enabling more people to take a shot.

From that point of view PG's piece is doubly weird, since YC was started from this very premise.

Does the current kind of increasing inequality reduce the pool of people who get to take a shot or increase it? If it reduces if then we need to change something.

If we leave the money with private wealthy capitalists, they might do something good for society on accident as a side effect of their ego-aggrandizing or wealth-concentration efforts.

If we tax it, we can actually do something good for society on purpose with it. We can give the business/tax subsidies that are required for all of Musk's ventures to succeed. We can educate Musk's workers. We can maintain and create and enhance the infrastructure required for Musk to continue to make his obscene profits, which we continue to tax and reinvest in the country.

Or we can just keep hoping that the rich and powerful class of billionaires have weird hobbies that tech people happen to think are cool.

Yeah. That's why I think Elon Musk is absolutely the least representative rich entrepreneur on the planet. He's one of the few 'rich and powerful billionaires' whose hobby happens to be fixing the world. It's a rare thing; your average billionaire is nothing like that. In fact, many laws that exist today were created to protect us from rich people whose hobbies did not include making things better for everyone.

>>If you had taxed Musk at 80%

He would have thought about futility of giving one's whole life to building something and then watch 80% of it taken away by someone else.

A few options remain for such people. Tax havens, countries with better respect for individual merit and contribution or plainly make money till a point and quit. All the three are equally damaging to any society for a long time.

Eg: See USSR, North Korea, Venezuela, Cuba etc.

You don't achieve anything by making the rich poor. Apart from the sadistic pleasure to soothe your flames of jealousy towards their wealth.

The end result is you scare almost any genuine contributor to the economy, and they learn they are better off in some other place.

> You don't achieve anything by making the rich poor.

Who is proposing to make the rich poor?

The most anyone here seems to be proposing is to make the rich less rich but still rich.

>>anyone here seems to be proposing is to make the rich less rich but still rich.

This is backwards. Not sure why this should even be done. And why does this have to end at an individual? Why should some countries be so economically powerful and others not? Will it be ok if wealth from developed nations were transferred to poor nations, every year?

You make poor people rich, you make the sick and malnourished healthy, you make the illiterate literate. You don't make the rich less rich, or the healthy less healthy or the literate less read.

Progress happens in the forward direction, not by pulling people down to make your failure look good.

There is a irrational fear here somehow equating wealth and evil. Not sure why people even think that way.

> This is backwards.

Only because I copied your phrasing.

I dare say there are people around who want to tax rich people just because they don't like wealth, but that's not what's being proposed by the OP and it's not what most people advocating higher taxation are calling for. E.g., from the OP: "So by taxing the wealthy and spending it on services, we can better ensure that the level playing field you allude to continues to exist." (In case it isn't clear from that quotation, the "level playing field" isn't about equalizing wealth or income, it's about providing public services to everyone.)

> equating wealth and evil

Who's doing that? Here's the OP again: "No one believes that there should not be rich people." "No one wants to take the money you have away." You may think the OP is insincere, but he is very plainly not equating wealth and evil. I don't see anyone here equating wealth and evil, implicitly or explicitly. I'm afraid I think you're just imagining it.

Here are arguments I see actually being made by people in this discussion advocating more tax. I have italicized the only one of these arguments that is on the same continent as the ballpark of "equating wealth and evil", and it's still a fair way away. Governments can allocate capital more effectively than most billionaires. Taxation may incentivize wealthy people to invest more. Taxes are low right now compared with what they have historically been, so raising them might be a good idea. Inequality itself causes social problems. No single person can really be so much more productive than others as to justify billions in wealth; so if someone is that wealthy, they got that way on account of others' work, so they don't deserve it. Economists are saying we need to reduce inequality to avoid disaster.

> Will it be ok if wealth from developed nations were transferred to poor nations, every year?

Yes, that would probably be a good thing. Is it supposed to be obviously not? Most developed nations do in fact transfer some of their wealth to poor nations every year. So do citizens of those developed nations. We call the first of those "aid" and the second "charity" and while it's possible to argue about how effective they are it's certainly not obvious that they're a bad idea.

>>Who's doing that?

Read this thread over again. There is a sad sentiment regarding Elon Musk's Mansion.

>>Governments can allocate capital more effectively than most billionaires.

Demonstrably wrong. See wars in history.

>>Inequality itself causes social problems.

Like what? Your USSR, North Koreas, Venezuelas of the world. In fact every failed communist nation in the past century falsifies this claim.

>>No single person can really be so much more productive than others as to justify billions in wealth; so if someone is that wealthy, they got that way on account of others' work, so they don't deserve it. Economists are saying we need to reduce inequality to avoid disaster.

Appreciable sentiment if you till the land with a shovel in your hand. Increase of productivity is not always measured through human effort alone. But also through tools which humans invent to amplify their productivity through automation of some kind. There are kinds of effort, one where you do all the work alone. One where you work to invent a tool that does that the job for you. Latter is also commonly known as 'progress'.

I don't see the "sad sentiment regarding Elon Musk's mansion" anywhere at all in this discussion. Someone said Musk seemed like the kind of person who would put every cent he owned into his businesses and not buy a big house or a yacht or anything. Someone else said: no, as it happens he's got a big house. No one has suggested that he shouldn't have a big house. No one has suggested that having one makes him a bad person. I think you're seeing things that aren't there.

On the rest: I wonder whether you misunderstood what I was doing in that paragraph. I am not endorsing any of the arguments I mentioned (though as it happens I agree with some of them). I was listing all the things that people in this discussion had (at the time) said in favour of higher taxes, and pointing out that none of them involved saying that wealth is evil or that rich people are evil.

So responding by countering a few of the arguments misses the point. I wasn't making those arguments myself. I was pointing out that none of them involves the idea that rich = evil.

> Will it be ok if wealth from developed nations were transferred to poor nations, every year?

It will, and it happens; think the rich Western European countries putting money into Europe, which they pay out to the economically less developed countries in the east and south. It's what allowed Greece to not go bankrupt. There's also basic relief coming from the UN, and of course taking in Syrian refugees.

> There is a irrational fear here somehow equating wealth and evil. Not sure why people even think that way.

Because money buys power, and if, say, someone wants to build a wall to keep Mexicans or Canadians out, enough money will buy enough power to do that. Corruption. Second, the rich in the US got rich at the expense of the now nearly non-existent middle class and the poor, and the relatively rich country isn't putting its money into basic services like decent, affordable health care, basic income, or decent jobs (something above a McJob that doesn't require a university degree).

It's not the rich that are the problem, it's the fact the middle class is going extinct because of them or their businesses. It's the companies like Amazon that offer low prices due to low-paid but hard-working employees (that will soon be replaced by robots), or the food companies with dollar menus (whose employees are also being replaced by robots / computer screens). There's no real higher-level jobs becoming available for those people - also because higher-level educations have to either be paid out of pocket, or paid out of various grants (like the ones that will pay your education if you happen to be good at sports or chess or whatever).

[/rant. Probably wrong. But, perceptions]

You mean like what happened when we had >80% taxes on the highest bracket of income? Instead of leaving or whining they bought the government and changed the taxes to something they prefer.

Every cent they earned is off the back of the investment the US government and society has put into our infrastructure, workforce, culture, work ethic, etc. If the government that created the atmosphere which allows these people to exist chooses that they get to keep 20% of the obscene billions of dollars they are taking from the poor they should be delighted. If they try to evade taxes we should lock them in jail or confiscate all of it.

From a purely utilitarian perspective, the rich often leverage their capital to achieve things that would be impossible or difficult to do without access to the capital they created.

They also often waste their capital on complete failures. Whether the rate of wasted spending among the rich is greater or lesser than the rate of waste in government is open to debate. But "from a utilitarian perspective," you can't ignore the fact that there is also massive waste and fraud in the private sector.

I think the 80% thing you're discussing is a bit like the 'duplo economy' that PG mentions in his essay. Very large broad-brush taxation, with little specificity.

It would be trivial to make the taxation regime more high-resolution so that people who reinvest their cash into other ventures are taxed at a far lower rate, whereas those who wish to retire early and do nothing else are taxed a lot more.

Better to start from the society you want to see and work backwards from there to design a taxation system, rather that say yes or no to one or two one-size-fits-all options, I think.

If you reinvest money in a company, it's no longer your income, your AGI decreases, and your marginal and absolute tax rates both decrease. The current system is exactly as you describe.

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